Rule of Law in Developing Countries

What’s the importance of rule of law for economic and society development? Samuel Gregg gives an interesting lecture on the definition of rule of law, suggestions on what it means for economic development and its implications for Latin America.

He starts by explaining that rule of law is not the same as democracy, because even though a democracy can have rule of law, but there is not association, since “majority rule” can be highly unjust. This concept is fundamentally about legal justice and can be addressed from legal positivism or morality. Gregg shares 8 characteristics of rule of law to reflect on how often this concept can be routinely violated.

This isn’t just a question of laws being helpful or useful, it’s also about rules being reasonable”.
Samuel talks about the purpose of rule of law: justice and liberty. Also how it is fundamental for long term economic development and prosperity, since it specifically does 6 important things to promote entrepreneurship, liberty, property rights and an environment for growth.

Rule of law enhances the ability of everyone to make informed economic choices, whether it is how I run my business or whether it’s when I go and buy something from a business”.
Later describes other effects of rule of law, such as inhibiting the ability of the state to try and engage in the type of extensive economic planning that undermines the functions of a market economy. Also ensures equality before the law, reminds us of what the state should be doing in the economy to uphold contracts, protect private property and maintain peace.

Specifically in the case of Latin America, Samuel argues that if these countries advance rule of law in the conditions in which they find themselves, they can gain a type of comparative advantage over bigger economies. Later analyzes how rule of law has advanced (or not) in Latin America over the past 25 years.

Finally reflects on the actions that need to be done to advance this important aspect for the successful development of societies.