Law and Development

Theory and Practice

Yong-Shik Lee

• Publisher: Routledge
• Year: 2022
• ISBN:
  9781000520835
• Edition: 2
• Topic: Law
• Subtopic: International Law
• Index: Law

The book examines the theory and practice of law and development. It introduces the General Theory of Law and Development, an innovative approach which explains the mechanisms by which law impacts development. This book analyzes the process of economic development in South Korea, South Africa, and the United States from legal and institutional perspectives. The book also explains why the concept of "development" is not only relevant to developing countries but to developed economies as well.

The new edition includes five new chapters addressing the relationships between law and economic development in several key areas, including property rights, political governance, business transactions, state industrial promotion, and international trade and development.

Part I Law and development in theory

DOI: 10.4324/9781003090175-1

1 IntroductionWhat is law and development?

DOI: 10.4324/9781003090175-2

1.1 Interrelationship between law and development

“Law and Development” is an area of inquiry on the interrelationship between law and development. In practice, this term, which is unfamiliar to many, refers to various studies, analytical approaches, and practical projects that concern the general or specific aspects of this interrelationship. This broad description reflects heterogeneous characteristics, diverse tendencies, and the rather amorphous nature of the discipline,¹ but such a general description is not particularly useful to those who want to understand exactly “what law and development is”; thus, more specific accounts of the constituent concepts in law and development and their applications are necessary. The introduction aims to answer the question of “what law and development is” by offering some explanation of its constituent concepts and the background of its development.

Broadly speaking, there are three perspectives on the relationship between law and development. The first perspective postulates that law² is merely a vehicle through which a chosen policy is implemented to achieve “development,” however it is defined.³ For example, if a government adopts an economic development policy to improve the use of land (e.g., increase its productivity) by securing landowners’ exclusive property rights to the land and adopts a law setting up a land registry that records such rights, the law that is adopted to protect and enforce these rights through land registration is merely a vehicle to carry out the government’s development policy, and the particular law is not a subject of an independent analysis. What is of substantive significance is the policy itself (in this case, one that grants exclusive property rights through land registry), not its vehicle (a law that has been adopted to implement the policy). The traditional economic analysis adopts this approach and assumes that whatever policy has been adopted will be implemented on the ground. The analytical focus is on the policy that the law advances (e.g., whether the law guarantees private property rights or restricts them), and researchers examine the consequence of its implementation without performing a separate analysis as to whether the device, such as law, that has been adopted to implement the policy will be effective.

The second perspective is that law, as well as the policy that it advances, is relevant to development, justifying a separate analysis for law. Thus, one may attempt to analyze the mechanisms by which law impacts development (the policy being a part of these mechanisms). From this perspective, law is not just a vehicle to implement a policy, and laws that promote an identical policy may have varied impacts on development depending on relevant elements such as regulatory design, regulatory compliance, and quality of implementation.⁴ For example, laws that require the establishment of a land registry have had different effects on land registration and the protection of property rights from one place to another where relevant social and economic consequences vary significantly; in some places, such laws have effectively enabled land registration and secured exclusive property rights for landowners, while in some other places it has not, instead causing substantial social and political disruptions.⁵ The analytical focus is the impact of law and the relevant elements, such as institutions and socioeconomic conditions,⁶ and it is not assumed that law successfully implements the policy that it purports to advance.

The third perspective posits that the existence of rational law or a governance system based on law (“the rule of law”) constitutes an element of development, regardless of its specific impact on the economy and society. Under this approach, the rule of law is itself a development objective,⁷ and law is no longer merely a means to achieve other developmental objectives, such as economic growth and industrial development. The rule of law has been emphasized since the 1980s in the context of neoliberalism; under this approach, law is seen as a neutral device used to secure individual freedom and to place restraints on state intervention in the economy.⁸ The rule of law has been recognized as a development goal set by national development agencies and intergovernmental organizations. For example, the United Nations’ Sustainable Development Goals (SDGs) include the rule of law among the targets under their 17 economic and social development goals to be achieved by 2030.⁹

Among these perspectives, this book subscribes to the second approach for the following reasons. The first perspective, one that views law merely as a device for policy implementation and not as a subject of independent analysis, disregards the importance of law as a determinant of the success of policy implementation. One cannot assume that a policy will always be successfully implemented, as such is not the case on the ground; law is an essential component for the successful implementation of a policy, which necessitates an independent assessment, as advocated by the second perspective. As to the third approach emphasizing the rule of law,¹⁰ the latter can be identified as a development objective, as demonstrated by the inclusion of the rule of law among the SDGs’ development targets, although its imprecise nature generates an argument as to its scope, substantive standards, and procedural requirements.¹¹ If one is to accept the rule of law as a development objective, law becomes both an end and means (of achieving other development objectives, such as economic development) as long as the latter is not overlooked. Thus, the rule of law and its role need to be analyzed concerning the other development objectives. This means that the current emphasis on the rule of law does not preclude the adoption of the second approach.

Law and development, as an area of study, should also be distinguished from other (related) areas of studies such as “law and economics” and “law and society.” Law and economics tends to focus on the microeconomic analysis of law, assessing the economic efficiency of law.¹² Law and development also examines economic issues in the context of development but focuses more on macroeconomic issues such as economic growth and income distribution. Also, law and development addresses social progress issues, which is not a primary subject of law and economics but would be included in the ambit of law and society.¹³ Law and society examines the impact of law on society more broadly but without a focus on development issues. In today’s world, where development has become one of the most important international agendas, as demonstrated by major global initiatives such as the SDGs, there is a need for a discipline that focuses on the important interrelationship between law and development. Law and development, as a separate field of study, will serve this interest.

1.2 “Law” and associated concepts¹⁴

Law is a pillar concept of law and development; thus, it is essential to clarify the concept of “law” in the context of law and development. This section also discusses two other key concepts associated with law: “legal frameworks” and “institutions.” “Law” is defined generally as a “body of rules of action or conduct prescribed by controlling authority, and having binding legal force”¹⁵ or “a specific rule or a set of rules binding on the members of a society.”¹⁶ Examples of law include constitutions and statutes adopted by legislatures, regulations adopted by administrative agencies, and ordinances adopted by municipalities. In the law and development context, “law” may be broader than the term’s usual conception based on formalistic characteristics. For example, binding judicial precedents are referred to as “law” (case law) in common law countries, such as the United States and Britain, even if such precedents are not formally considered “law” in civil law jurisdictions, such as France and Germany.¹⁷ However, as long as judicial precedents are followed with de facto binding force, they are considered “law” for law and development studies in bot...