The legal turn in late development theory: The rule of law and the World Bank's development model

Harvard International Law Journal

Volumn 52, Issue 1, 2011, Pages 287-319

  Krever, Tor ^a  

^a HARVARD LAW SCHOOL   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79955917415     PISSN: 00178063     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Article

References (318)

1. In Iraq, the rule of law provided an ex post facto legitimation of the U. S. and British military occupation. For instance, in a speech on January 10, 2007, almost four years after first declaring victory, George W. Bush opined that "victory in Iraq will bring something new in the Arab world-a functioning democracy that polices its territory, upholds the rule of law, respects fundamental human liberties, and answers to its people." George W. Bush, 43d President of the U. S., President's Address to the Nation (Jan. 10, 2007, 9:01 PM), available at http://georgewbush-whitehouse.archives.gov/news/ releases/2007/01/20070110-7.html.
2. Following the military ouster of Honduran president Manuel Zelaya on June 28, 2009, a vocal coterie of right-wing publicists in the United States quickly set about explaining that this was, in fact, not a coup. The deposition of the country's democratically elected president, one Honduran lawyer informed U. S. readers, was "nothing short of the triumph of the rule of law." Octavio Sánchez, A 'Coup' in Honduras? Nonsense, CHRISTIAN SCI. MONITOR, July 2, 2009, at 9, available at http://www.csmonitor.com/Commentary/Opinion/ 2009/0702/p09s03-coop.html;
3. see also Miguel A. Estrada, Honduras' Non-coup, L. A. TIMES, July 10, 2009, at A29, available at http://articles.latimes.com/2009/jul/10/opinion/oe- estrada10.
4. The military's own legal adviser, Colonel Herbeth Bayardo Inestroza, has acknowledged that, in authorizing the kidnapping and forced transport of Zelaya to Costa Rica, the military had acted illegally and circumvented laws. Frances Robles, Top Honduran Military Lawyer: We Broke the Law, HONDURAS FORUM MESSAGE BOARD (July 3, 2009, 9:57 AM), http://honduras.com/catracho-forum/viewtopic.php? t=29847&sid=5215203e7a67f0c303cd29588755d05d. For a discussion of the Honduran coup and its historical context-bloody and bearing the stamp of repeated U. S. machinations-
5. see John Perry, In Tegucigalpa, 31 LONDON REV. BOOKS, Aug. 6, 2009, at 35, 35-36.
6. INT'L RULE OF LAW DIRECTORY, http://www.roldirectory.org (last visited Nov. 6, 2010).
7. Dani Rodrik, Goodbye Washington Consensus, Hello Washington Confusion? A Review of the World Bank's Economic Growth in the 1990s: Learning from a Decade of Reform, 44 J. ECON. LITERATURE 973, 978(2006) (suggesting the original Washington consensus has been "augmented" by additional reforms that are "heavily institutional in nature"). Rodrik identifies ten elements in the original Washington consensus: fiscal discipline, reorientation of public expenditures, tax reform, financial liberalization, unified and competitive exchange rates, trade liberalization, openness to direct foreign investment, privatization, deregulation, and secure property rights. To these tenets, he suggests, the "augmented" Washington consensus adds: corporate governance; anti-corruption; flexible labor markets; World Trade Organization agreements; financial codes and standards; "prudent" capital-account opening; non-intermediate exchange rate regimes; independent central banks; social safety nets; and targeted poverty reduction.
8. Id.
9. Neoliberalism refers to a political economic program, and supporting ideology, that holds that the liberation of individual entrepreneurial activity is necessary, or at the very least is the best means, to promote economic welfare and human well-being. To this end, its adherents advocate free markets, the liberalization of trade and finance, and a limited role for the state in the economic and social organization of society.
10. See DAVID HARVEY, A BRIEF HISTORY OF NEOLIBERALISM 2-4 (2005). In practice, neoliberal policies have included widespread "[d]eregulation, privatization, and the withdrawal of the state" from the provision of social services.
11. Id. For the intellectual origins of neoliberalism
12. see HA-JOON CHANG, An Institutionalist Perspective on the Role of the State, in GLOBALIZATION, ECONOMIC DEVELOPMENT AND THE ROLE OF THE STATE 75, 77-79 (2003). Chang argues that neoliberalism was "born out of a marriage of convenience between neoclassical economics as the source of intellectual legitimacy... and what may be broadly called the Austrian-Libertarian tradition as the source of political rhetoric."
13. Id. at 77;
14. see also HA-JOON CHANG, State, Institutions and Structural Change, in GLOBALIZATION, ECONOMIC DEVELOPMENT AND THE ROLE OF THE STATE 45, 47-50 (2003). The origins and growth of neoliberalism as an economic and political movement are also explored in two volumes on the Mont Pèlerin society, a "thought collective" particularly influential in the spread of neoliberal ideas.
15. See generally THE ROAD FROM MONT PÈLERIN: THE MAKING OF THE NEOLIBERAL THOUGHT COLLECTIVE (Philip Mirowski & Dieter Plehwe eds., 2009). For a trenchant analysis of neoliberalism's prospects as an economic and political program in the aftermath of the 2008 financial crisis
16. see Robert Wade, Financial Regime Change?, 53 NEW LEFT REV. 5, 5-21 (2008);
17. Susan Watkins, Shifting Sands, 61 NEW LEFT REV. 5, 5-27 (2010).
18. KENNETH W. DAM, THE LAW-GROWTH NEXUS: THE RULE OF LAW AND ECONOMIC DEVELOPMENT 5(2006).
19. Alvaro Santos, The World Bank's Uses of the "Rule of Law" Promise in Economic Development, in THE NEW LAW AND ECONOMIC DEVELOPMENT: A CRITICAL APPRAISAL 253, 267 (David M. Trubek & Alvaro Santos eds., 2006).
20. Ha-Joon Chang, Understanding the Relationship between Institutions and Economic Development: Some Key Theoretical Issues 1 (U. N. World Institute for Development Economics Research, Discussion Paper No. 2006/05, 2006), available at http://www.wider.unu.edu/publications/working-papers/discussion-papers/2006/ en-GB/dp2006-05/(expressing similar skepticism about other post-Washington consensus policy innovations).
21. Roberto Dañino, The Legal Aspects of the World Bank's Work on Human Rights, in LAW, CULTURE, AND ECONOMIC DEVELOPMENT 3, 6 (Joseph J. Norton & C. Paul Rogers III eds., 2007). Financial and technical assistance for rule of law and justice reform to developing countries is provided through two of the Bank's five primary institutions: the "International Bank for Reconstruction and Development (IBRD) focuses on middle-income countries, " while the International Development Association ("IDA") works with their low-income counterparts.
22. WORLD BANK LEGAL VICE PRESIDENCY, INITIATIVES IN JUSTICE REFORM 3(2009).
23. WORLD BANK LEGAL VICE PRESIDENCY, supra note 9, at 1. The Legal Vice Presidency's Initiatives in Justice Reform 2009 provides a listing of Bank-financed activities in justice reform since 2000. These range from projects to change countries' legal frameworks "in order to improve the business environment, "
24. id. at 4, to efforts to build the capacity, management, and performance of judiciaries
25. id. at 4-5. Reform also focuses on improving access to justice, namely through facilitating access of citizens and communities to the courts, and improving legal education.
26. Id. at 5-6. Many reform projects, although not all, seek to promote economic development. as the Legal Vice Presidency observes, "the Bank has promoted adherence to the rule of law as a fundamental element of economic development."
27. Id. at 2. The traditional focus by the Bank and other international financial institutions on economic measures of development (GDP or GNP growth, for instance) has been criticized.
28. See, e.g., UNITED NATIONS DEVELOPMENT PROGRAMME, HUMAN DEVELOPMENT REPORT 9(1990) (warning that such economism has "supplant[ed] a focus on ends by an obsession with merely the means"). Development is a multifaceted process involving not only economic growth, but also improved health, expanded education, increased life expectancy and a general improvement of individuals' well-being. The United Nations General Assembly Declaration on the Right to Development, for example, defines development as "a comprehensive economic, social, cultural and political process, which aims at the constant improvement of the wellbeing of the entire population and of all individuals on the basis of their active, free and meaningful participation in development and in the fair distribution of benefits resulting therefrom." Declaration on the Right to Development, G. A. Res. 41/128, U. N. Doc. A/RES/41/128 (Dec. 4, 1986). Amartya Sen has proposed a now influential conceptual framework for approaching development in which the goal of development is understood to be the expansion of individuals' capabilities-that is, individuals' substantive freedom to choose lifestyles they have reason to value. See generally Amartya Sen, Development as Freedom (1999). Drawing, in part, on Sen's work, the United Nations Development Programme has, since 1990, published its Human Development Index ("HDI") in its annual Human Development Report. This index incorporates measures of life expectancy, adult literacy rate, school enrolment, and PPP GDP per capita. Nonetheless, economic measures remain dominant in the mainstream development literature.
29. The Bank's charter lists five purposes: " (1) to assist in development and reconstruction, (2) to promote private foreign investment, (3) to promote long term balanced international trade, (4) to lend for project development, (5) to conduct its operations with due regard for business conditions...." GRAHAM HARRISON, THE WORLD BANK AND AFRICA: THE CONSTRUCTION OF GOVERNANCE STATES 8(2004) (focusing primarily on the World Bank in Africa but capturing many of the salient features of, and shifts in, the Bank's approach to development in general)
30. adapted from IBRAHIM F. I. SHIHATA, THE WORLD BANK IN A CHANGING WORLD: SELECTED ESSAYS 62(1991).
31. Published in 1997, Nicholas Stern and Francisco Ferreira's study cites eight hundred professional economists employed by the Bank. Nicholas Stern & Francisco Ferreira, The World Bank as "Intellectual Actor", in 2 THE WORLD BANK: ITS FIRST HALF CENTURY 523, 524 (Devesh Kapur, John P. Lewis & Richard Webb eds., 1997).
32. Robin Broad, Research, Knowledge, and the Art of 'Paradigm Maintenance': The World Bank's Development Economics Vice-Presidency (DEC), 13 REV. INT'L POL. ECON. 387, 395(2006). Writing in the 1990s, Stern and Ferreira provide the figure of twenty-five million dollars each year for the Bank's entire research budget.
33. Stern & Ferreira, supra note 12, at 524.
34. Stern & Ferreira, supra note 12, at 524;
35. Robert Wade, Japan, the World Bank, and the Art of Paradigm Maintenance: The East Asian Miracle in Political Perspective, I/217 NEW LEFT REV. 3, 5(1996) ("The Bank's ability to frame the debate rests on... its ability to influence the terms on which lowincome countries gain access to international capital markets....");
36. see also Lyn Squire, Why the World Bank Should Be Involved in Development Research, in THE WORLD BANK: STRUCTURES AND POLICIES 108, 125 (Christopher L. Gilbert & David Vines eds., 2000) (noting the influence of Bank research on operational staff).
37. Stern & Ferreira, supra note 12, at 524;
38. see also Wade, supra note 14, at 5 ("The World Bank enjoys a unique position as a generator of ideas about economic development. Around the world, debates on development issues tend to be framed in terms of 'pro or anti' World Bank positions.").
39. Broad, supra note 13, at 396 (quoting WORLD BANK, OPERATIONS EVALUATION DEPARTMENT, SHARING KNOWLEDGE: INNOVATIONS AND REMAINING CHALLENGES 62(2003));
40. see also Béatrice Hibou, The Political Economy of the World Bank's Discourse: From Economic Catechism to Missionary Deeds (and Misdeeds), LES ÉTUDES du CERI 3 (Janet Roitman trans., Jan. 2000), available at http://www.ceri-sciencespo.com/publica/etude/etude39a.pdf ("[T]he Bank has acquired a quasi-monopoly on institutional knowledge in the field of economic development.").
41. Stern and Ferreira cite one Bank study finding that in a "1990 compendium of development economics reading lists... one-sixth of the reading assignments were drawn from World Bank research publications and journal articles." Stern & Ferreira, supra note 12, at 590. They also observe that, based on the Social Sciences Citation Index, "[b]ank-authored publications are cited 20 to 40 percent more often than the average article."
42. Id.
43. see also Squire, supra note 14, at 126-27 (observing the high prevalence of Bank authors on development course reading lists).
44. World Development Reports are cited below by both their year and thematic title.
45. Stern & Ferreira, supra note 12, at 571.
46. Robert Wade, US Hegemony and the World Bank: The Fight Over People and Ideas, 9 REV. INT'L POL. ECON. 206, 224 n. 15(2002).
47. Stern & Ferreira, supra note 12, at 571. Typically concise and intelligible to the non-expert, the reports nonetheless achieve accessibility at a cost. "In particular, documentation has fallen far short of that which would be acceptable in a scholarly publication; given that the reports are widely quoted in support of particular positions, this is a serious drawback."
48. Id.
49. Roberto Dañino, Senior Vice President & Gen. Counsel, The World Bank, Speech to the American Foreign Law Association: The World Bank Legal Vice Presidency (June 9, 2004), available at http://siteresources.worldbank.org/ INTLAWJUSTICE/214576-1139604306966/20818477/ TheWBLegalVicePresidencyAmericanForeignLawAssociation060904.pdf.
50. See Santos, supra note 7, at 276. Discussing the Bank's work on "good governance, " David Williams and Tom Young similarly observe: "The Bank's position is a rather confused one. This is only to be expected perhaps for such a new area of concern, but it makes for certain analytical difficulties. The Bank is a large and diverse organization, so much so that even to talk of the 'Bank's position' at all is to oversimplify." David Williams & Tom Young, Governance, the World Bank and Liberal Theory, 42 POL. STUD. 84, 86(1994). (Pubitemid 24775947)
51. See BRIAN Z. TAMANAHA, ON THE RULE OF LAW: HISTORY, POLITICS, THEORY (2004) (discussing the meaning attached to the rule of law at various historical junctures);
52. Danilo Zolo, The Rule of Law: A Critical Reappraisal, in THE RULE OF LAW: HISTORY, THEORY AND CRITICISM 3 (Pietro Costa & Danilo Zolo eds., 2007) (discussing the various historical meanings attached to the epithet, as well as common themes among geographical traditions);
53. see also infra Part IV.
54. Brian Z. Tamanaha, The Lessons of Law-and-Development Studies, 89 AM. J. INT'L L. 470, 476(1995).
55. See, e.g., WORLD BANK LEGAL VICE PRESIDENCY, INITIATIVES IN LEGAL AND JUDICIAL REFORM 3(2004) ("Legal and judicial reform is a means to promote the rule of law.");
56. WORLD BANK LEGAL VICE PRESIDENCY, supra note 9, at 2 ("[T]he Bank has promoted adherence to the rule of law as a fundamental element of economic development and poverty reduction, given that the absence of well-functioning law and justice institutions and the presence of corruption are oft-cited constraints to economic growth and to the sustainability of development efforts.");
57. see also infra Part IV. B.
58. A now famous critique of the Law and Development movement was published in 1974 by two of its former leading figures. See David M. Trubek & Marc Galanter, Scholars in Self-Estrangement: Some Reflections on the Crisis in Law and Development Studies in the United States, 1974 WIS. L. REV. 1062(1974).
59. Elliot M. Burg, Law and Development: A Review of the Literature & a Critique of 'Scholars in Self-Estrangement', 25 AM. J. COMP. L. 492, 496-97 (1977) ("[T]he chief sponsors of projects, research and writing in law and development have been the U. S. Agency for International Development (AID) and the Ford Foundation (Ford).");
60. John Henry Merryman, Comparative Law and Social Change: On the Origins, Style, Decline & Revival of the Law and Development Movement, 25 AM. J. COMP. L. 457, 458(1977) (suggesting that projects focused in particular on Latin America and Africa).
61. See, e.g., W. W. ROSTOW, THE STAGES OF GROWTH: A NON-COMMUNIST MANIFESTO 3, 12(1960) (arguing that a society in the process of modernization passes from traditional society through a "transitional period" when preconditions for take-off are created, a "take-off" period, a "sweep into maturity, " and finally, an "age of high mass-consumption" marked by a fully mature economy);
62. DAVID LERNER, THE PASSING OF TRADITIONAL SOCIETY (1958). The Law and Development theorists were also influenced by the work of Max Weber and, in particular, his observations on the role of "rational" legal systems in the emergence of modern capitalism.
63. See David M. Trubek, Max Weber on Law and the Rise of Capitalism, 1972 WIS. L. REV. 720, 720(1972) (discussing Weber's contribution to Law and Development theory).
64. See generally MAX WEBER, ECONOMY AND SOCIETY (1968) (suggesting European law contributed to the emergence of capitalism).
65. Daniel Berkowitz et al., The Transplant Effect, 51 AM. J. COMP. L. 163, 163(2003) ("The first law and development movement... brought new legal codes to countries in Latin America, Africa, and-to a lesser extent-in Asia.").
66. David M. Trubek, The Political Economy of the Rule of Law: The Challenge of the New Developmental State, 1 HAGUE J. RULE L. 28, 29(2009).
67. Import-substitution industrialization was also widely prescribed and followed. See generally RAÚ L PREBISCH, THE ECONOMIC DEVELOPMENT OF LATIN AMERICA AND ITS PRINCIPAL PROBLEMS (1950).
68. HARRISON, supra note 11, at 11. However, even in this early post-war period, the Bank was adamant that in certain areas the private market was superior to the state. In 1949, for instance, the United Nations Economic and Employment Commission released a report advocating heavy industrial projects in the public sector. The Bank was highly critical and, as Stern and Ferreira describe, "suggested that governments of less developed countries had enough to do in trying to provide adequate infrastructure, and that domestic and foreign savings, channeled through the private sector, should take care of these other areas."
69. Stern & Ferreira, supra note 12, at 533.
70. See JAMES A. GARDNER, LEGAL IMPERIALISM: AMERICAN LAWYERS AND FOREIGN AID IN LATIN AMERICA 11(1980) (describing the work of "American legal missionaries");
71. Trubek & Galanter, supra note 27, at 1075.
72. Devesh Kapur, John P. Lewis & Richard Webb, The Bank of the 1950s, in 1 THE WORLD BANK: ITS FIRST HALF CENTURY 85, 109-10 (Devesh Kapur, John P. Lewis & Richard Webb eds., 1997).
73. Alexander L. Wiener, Jr., Law and Economic Development, 40 U. DET. L. J. 510, 512(1963)
74. (quoting Letter from Doris R. Eliason, Office of Information, Int'l Bank for Reconstruction and Dev., to Alexander L. Wiener, Jr. (Mar. 15, 1962)).
75. Trubek & Galanter, supra note 27, at 1063-64, 1076.
76. For critiques of structural adjustment, see Howard Stein, Rethinking African Development, in RETHINKING DEVELOPMENT ECONOMICS 153 (Ha-Joon Chang ed., 2003);
77. Howard Stein & Machiko Nissanke, Structural Adjustment and the African Crisis: A Theoretical Appraisal, 25 E. ECON. J. 153(1999).
78. John Loxley, The Berg Report and the Model of Accumulation in Sub-Saharan Africa, 27/28 REV. AFR. POL. ECON. 197, 197(1983) (book review).
79. WORLD BANK, ACCELERATED DEVELOPMENT IN SUB-SAHARAN AFRICA: AN AGENDA FOR ACTION 5(1981).
80. See William Easterly, What Did Structural Adjustment Adjust? The Association of Policies and Growth with Repeated IMF and World Bank Adjustment Loans, 76 J. DEV. ECON. 1, 2-3 (2005).
81. See Anne O. Krueger, Introduction to ECONOMIC POLICY REFORM: THE SECOND STAGE 3, 3-4 (Anne O. Krueger ed., 2000).
82. See John Williamson, What Washington Means by Policy Reform, in LATIN AMERICAN ADJUSTMENT: HOW MUCH HAS HAPPENED 7, 7 (John Williamson ed., 1990).
83. Williamson's edited 1990 volume collects papers and proceedings from a conference held by the Institute for International Economics in November 1989.
84. John Weeks & Howard Stein, Washington Consensus, in THE ELGAR COMPANION TO DEVELOPMENT STUDIES 676, 676 (David Alexander Clark ed., 2006) ("The Consensus reigned hegemonic in international development policy from the early 1980s to the mid-1990s, when it came under sustained attack.").
85. Williamson, supra note 43, at 8-17.
86. Marcus Taylor, Responding to Neoliberalism in Crisis: Discipline and Empowerment in the World Bank's New Development Agenda, in NEOLIBERALISM IN CRISIS, ACCUMULATION, AND ROSA LUXEMBURG'S LEGACY 3, 9 (Paul Zarembka & Susanne Soederberg eds., 2004).
87. HARRISON, supra note 11, at 18;
88. see also WORLD BANK, WORLD DEVELOPMENT REPORT 1987: BARRIERS TO ADJUSTMENT AND GROWTH IN THE WORLD ECONOMY, INDUSTRIALIZATION AND FOREIGN TRADE, WORLD DEVELOPMENT INDICATORS 38(1987) (expressing a strong free market stance). Bateman and Chang argue that "the core doctrines of neo-liberalism" consist of "the need to vector all economic activity through private individual initiative; the need to avoid any aspect of planning or conscious guidance of the market mechanism; the need for all institutions to attempt to 'earn their keep on the market'; and, the need to ensure that all economic organizations are also as much as possible owned and controlled by the private sector."
89. Milford Bateman & Ha-Joon Chang, The Microfinance Illusion 23 (March 2009) (unpublished manuscript), available at http://www.econ.cam.ac.uk/faculty/ chang/pubs/Microfinance.pdf.
90. David Kennedy, The "Rule of Law, " Political Choices, and Development Common Sense, in THE NEW LAW AND ECONOMIC DEVELOPMENT: A CRITICAL APPRAISAL, supra note 7, at 95, 129.
91. Trubek, supra note 31, at 29-30.
92. It is indicative that Stern and Ferreira, in a history of the Bank's intellectual role from its inception until the early 1990s, make no mention of legal reforms or the Bank's theorizing on law and legal institutions in development. Although their focus is on the Bank's contributions to economics, they observe that the Bank has also been influential in the fields of "political science, demography, statistics, and sociology." Law does not rate a mention. See Stern & Ferreira, supra note 12, at 524.
93. See W. Paatii Ofosu-Amaah, Legal and Judicial Reform in Developing Countries: Reflections on World Bank Experience, 8 LAW & BUS. REV. AM. 551, 558-59 (2002).
94. Id. at 560.
95. Id.
96. Id.
97. See HARVEY, supra note 5, at 2-3;
98. Charles A. S. Hall & John Gowdy, Does the Emperor Have Any Clothes? An Overview of Scientific Critiques of Neoclassical Economics, in MAKING WORLD DEVELOPMENT WORK: SCIENTIFIC ALTERNATIVES TO NEOCLASSICAL ECONOMIC THEORY 3, 3 (Grégoire Leclerc & Charles A. S. Hall eds., 2007) (describing neoliberalism as a secular religion that "is based more on faith than on empiricism");
99. Perry Anderson, Renewals, 1 NEW LEFT REV. 1, 6(2000) (noting "the virtually uncontested consolidation, and universal diffusion, of neo-liberalism");
100. Bateman & Chang, supra note 48, at 23 (describing neoliberalism as "the reigning ideology of our time").
101. ANGUS MADDISON, THE WORLD ECONOMY: A MILLENNIAL PERSPECTIVE 126(2001).
102. See id.;
103. see also Branko Milanovic, The Two Faces of Globalization: Against Globalization as We Know It, 31 WORLD DEV. 667, 676(2003) (concluding that the economic record of the two decades between 1978 and 1998 were "vastly less successful than the preceding two decades"). The pattern holds at the global level: Chang reports that "[t]he world economy, which was growing at about 3% in per capita terms in the 'bad old days' of widespread regulation and punitive taxation for the rich in the 1960s and 70s, has grown at about half that rate in the last three decades."
104. Ha-Joon Chang, We Lost Sight of Fairness in the False Promise of Wealth, THE GUARDIAN (London), Aug. 31, 2010, at 28. This trend includes developed countries; in Britain, income growth has fallen from 2.4% in the 1960s and 1970s to 1.7% in the past two decades.
105. Id.
106. WILLIAM I. ROBINSON, PROMOTING POLYARCHY: GLOBALIZATION, US INTERVENTION, AND HEGEMONY 339(1996).
107. Id.
108. UNITED NATIONS DEVELOPMENT PROGRAMME, HUMAN DEVELOPMENT REPORT 1992, 34(1992).
109. Id.
110. UNITED NATIONS DEVELOPMENT PROGRAMME, HUMAN DEVELOPMENT REPORT 1996, 2(1996).
111. Milanovic attributes "the disastrous results brought to most of Africa, Latin America, and Eastern Europe" directly to "two decades of unabashedly free market policies."
112. Milanovic, supra note 58, at 679. And Taylor observes that "neoliberal restructuring" is "widely recognised as being characterized by profoundly uneven development, including increased poverty and inequality at the global level."
113. Taylor, supra note 47, at 13. He points to "the stagnation of Latin America and regression of sub-Saharan Africa, the two regions that most dramatically implemented neoliberal reforms of restructuring."
114. Id. These arguments recall the position of dependency theorists writing in the 1960s and 1970s who held that the "underdevelopment" of the South was not due primarily to local failure or poor countries' insufficient integration into the global economy, but rather was precisely a structural consequence of that integration and the resulting relation of dependency between metropole and satellite.
115. See generally SAMIR AMIN, ACCUMULATION ON A WORLD SCALE (1974);
116. FERNANDO HENRIQUE CARDOSO & ENZO FALETTO, DEPENDENCY AND DEVELOPMENT IN LATIN AMERICA (1979);
117. ANDRE GUNDER FRANK, CAPITALISM AND UNDERDEVELOPMENT IN LATIN AMERICA (1967). For recent work which takes up these themes in a historical context
118. see MIKE DAVIS, LATE VICTORIAN HOLOCAUSTS: el NIÑ O FAMINES AND THE MAKING OF THE THIRD WORLD (2001). Davis explores the connection between the famines that swept the South from 1876 to 1899 and the global expansion of capitalism, arguing, "[m]illions died, not outside the 'modern world system,' but in the very process of being forcibly incorporated into its economic and political structures. They died in the golden age of Liberal Capitalism; indeed, many were murdered, as we shall see, by the theological application of the sacred principles of Smith, Bentham and Mill."
119. Id. at 9.
120. See PETER GOWAN, THE GLOBAL GAMBLE 13-15, 126-30 (1999);
121. HARVEY, supra note 5, at 5-38. Leo Panitch and Sam Gindin argue that "neoliberalism was essentially a political strategy to shift the balance of class forces."
122. Leo Panitch & Sam Gindin, Superintending Global Capital, 35 NEW LEFT REV. 101, 110(2005);
123. see also Taylor, supra note 47, at 10 ("[N]eoliberal structural adjustment professed a fundamental re-articulation of social relations.... This was to be achieved through a process of social engineering by which the abstract disciplines inherent to capitalist social relations could be imposed in an increasingly direct fashion upon both state and society.").
124. SUSAN MARKS, THE RIDDLE OF ALL CONSTITUTIONS 58(2000).
125. Robert Wade, The Ringmaster of Doha, 25 NEW LEFT REV. 146, 152(2004) (arguing that neoliberal reforms "prohibit the use of protection or subsidies as part of any industrial strategy to stimulate new activities beyond those that might occur in free-market conditions" and "[t]his is a recipe for slower growth, higher poverty, higher unemployment and higher crime");
126. see also Jeff Faux & Larry Mishel, Inequality and the Global Economy, in ON THE EDGE: LIVING WITH GLOBAL CAPITALISM 93 (Will Hutton & Anthony Giddens eds., 2000) (describing the growing global population of unemployed, marginalized, and insecure attendant on neoliberal globalization).
127. See, e.g., ALICE H. AMSDEN, ASIA'S NEXT GIANT: SOUTH KOREA AND LATE INDUSTRIALIZATION (1989) (describing the role of the state in promoting industrialization in South Korea);
128. CHALMERS JOHNSON, MITI AND THE JAPANESE MIRACLE (1982) (describing Japanese post-war industrial policy);
129. ROBERT WADE, GOVERNING THE MARKET: ECONOMIC THEORY AND THE ROLE OF GOVERNMENT IN EAST ASIAN INDUSTRIALIZATION (1990) (describing the role of the state, in particular in Taiwan, in steering the direction of industrial growth);
130. Alice H. Amsden, The State and Taiwan's Economic Development, in BRINGING THE STATE BACK IN 78 (Peter B. Evans et al. eds., 1985) (describing the role of the state in Taiwan's development);
131. Ha-Joon Chang, The Political Economy of Industrial Policy in Korea, 17 CAMBRIDGE J. ECON. 131(1993) (describing the role of the state in South Korea's development);
132. Peter Nolan, Assessing Economic Growth in the Asian NICs, 20 J. CONTEMP. ASIA 41, 60(1990) (arguing that the experience of several East Asian economies "serves as a powerful reminder that a pure free market, laissez-faire capitalism... is not the way in which developing countries can best achieve rapid growth" and that "only in quite exceptional circumstances do free markets provide the best environment for rapid growth").
133. Wade, supra note 14, at 4.
134. Id.
135. WORLD BANK, THE EAST ASIAN MIRACLE: ECONOMIC GROWTH AND PUBLIC POLICY (1993). For discussions and critiques of The East Asian Miracle
136. see Ha-Joon Chang, Explaining 'Flexible Rigidities' in East Asia, in THE FLEXIBLE ECONOMY: CAUSES AND CONSEQUENCES OF THE ADAPTABILITY OF NATIONAL ECONOMIES 197 (Tony Killick ed., 1995);
137. Ha-Joon Chang, The East Asian Development Experience, in RETHINKING DEVELOPMENT ECONOMICS, supra note 38, at 107;
138. Stephan Haggard, Politics and Institutions in the World Bank's East Asia, in MIRACLE OR DESIGN? LESSONS FROM THE EAST ASIAN EXPERIENCE 81 (Albert Fishlow et al. eds., 1994) [hereinafter MIRACLE OR DESIGN?];
139. Dani Rodrik, King Kong Meets Godzilla: The World Bank and The East Asian Miracle, in MIRACLE OR DESIGN?, supra at 13;
140. Robert Wade, Selective Industrial Policies in East Asia: Is The East Asian Miracle Right?, in MIRACLE OR DESIGN?, supra at 55;
141. Yilmaz Akyüz, Ha-Joon Chang & Richard Kozul-Wright, New Perspectives on East Asian Development, 34 J. DEV. STUD. 4(1998);
142. Alice H. Amsden, Why Isn't the Whole World Experimenting with the East Asian Model to Develop?: Review of The East Asian Miracle, 22 WORLD DEV. 627(1994);
143. Sanjaya Lall, The East Asian Miracle: Does the Bell Toll for Industrial Strategy?, 22 WORLD DEV. 645(1994);
144. Joseph E. Stiglitz, Some Lessons from the East Asian Miracle, 11 WORLD BANK RES. OBSERVER 151(1996);
145. Wade, supra note 14.
146. Wade, supra note 14, at 5.
147. WORLD BANK, supra note 71, at 5;
148. see also Chang, The East Asian Development Experience, supra note 71, at 112-13 (discussing the East Asian Miracle report's conclusions).
149. WORLD BANK, supra note 71, at 102.
150. Wade, supra note 14, at 5.
151. Id.
152. See Gowan, supra note 65, at 187-242 (discussing and evaluating the theory and application of shock therapy in Eastern Europe). In Russia, for instance, "Big Bang reforms... deregulated most prices and launched a mass privatization program." Karla Hoff & Joseph E. Stiglitz, After the Big Bang? Obstacles to the Emergence of the Rule of Law in Post-Communist Societies 7 (Nat'l Bureau of Econ. Research, Working Paper No. 9282, 2002), available at http://www.nber.org/papers/w9282. Between the dissolution of the Soviet Union in December 1991 and July 1994, 14, 000 medium and large state enterprises amounting to seventy percent of Russian industry were privatized. Further privatizations followed between 1995 and 1997.
153. Id. at 7-8.
154. See, e.g., JEFFREY SACHS, POLAND'S JUMP TO THE MARKET ECONOMY xiii (1993) ("[M]arkets spring up as soon as central planning bureaucrats vacate the field.").
155. See Joseph E. Stiglitz, Senior Vice President & Chief Economist, WORLD BANK, WHITHER REFORM? TEN YEARS OF THE TRANSITION, KEYNOTE ADDRESS AT THE WORLD BANK ANNUAL BANK CONFERENCE ON DEVELOPMENT ECONOMICS 3 (Apr. 28-30, 1999). ("[T]hose who advocated shock therapy and rapid privatization argue that the problem was not too much shock and too little therapy, but that there was too little shock.... Other defenders of the recommended reform programs argue that the failures were not in the design of the reforms, but in their implementation. ").
156. The prefix distinguishes this school from an earlier current of economic thought associated with thinkers such as Thorstein Veblen. Other prominent institutional economists included Gunnar Myrdal and John R. Commons. The work of Friedrich List, a German writing in the nineteenth century, was also influential. See generally, e.g., JOHN R. COMMONS, INSTITUTIONAL ECONOMICS: ITS PLACE IN POLITICAL ECONOMY (Transaction Publishers 1990) (1934);
157. FRIEDRICH LIST, THE NATIONAL SYSTEM OF POLITICAL ECONOMY (J. Shield Nicholson ed., Sampson S. Lloyd trans., Longmans, Green, and Co. 1909) (1885);
158. GUNNAR MYRDAL ET AL., THE ESSENTIAL GUNNAR MYRDAL (Orjan Appelqvist & Stellan Andersson eds., 2005);
159. THORSTEIN VEBLEN, THE THEORY OF THE LEISURE CLASS: AN ECONOMIC STUDY OF INSTITUTIONS (2d ed. 1912);
160. Gunnar Myrdal, Institutional Economics, 12 J. ECON. ISSUES 771(1978).
161. See generally, e.g., DOUGLASS C. NORTH, INSTITUTIONS, INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE (1990) [hereinafter INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE];
162. DOUGLASS C. NORTH & ROBERT P. THOMAS, THE RISE OF THE WESTERN WORLD: A NEW ECONOMIC HISTORY (1973) [HEREINAFTER RISE OF THE WEST];
163. DOUGLASS C. NORTH, STRUCTURE AND CHANGE IN ECONOMIC HISTORY (1981) [hereinafter STRUCTURE AND CHANGE].
164. DOUGLASS C. NORTH, INSTITUTIONS, 5 J. ECON. PERSP. 97, 97(1991);
165. see also INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE, supra note 81, at 3 (defining institutions as "the rules of the game in a society or, more formally... the humanly devised constraints that shape human interaction. In consequence they structure incentives in human exchange, whether political, social, or economic. Institutional change shapes the way societies evolve through time and hence is the key to understanding historical change.").
166. See INSTITUTIONAL CHANGE AND ECONOMIC PERFORMANCE, supra note 81, at 33;
167. see generally RISE OF THE WEST, supra note 81.
168. See generally STRUCTURE AND CHANGE, supra note 81.
169. WORLD BANK, SUB-SAHARAN AFRICA: FROM CRISIS TO SUSTAINABLE GROWTH 60(1989).
170. WORLD BANK, GOVERNANCE AND DEVELOPMENT 1(1992).
171. WORLD BANK, GOVERNANCE: THE WORLD BANK'S EXPERIENCE vii (1994) (emphasis added).
172. See generally WORLD BANK, supra note 41 (criticizing state intervention in African economies and, in particular, the heavy protection of manufacturing industries and governments' trade and exchange-rate polices, which undermined agricultural producers' incentives).
173. HARRISON, supra note 11, at 19-20.
174. Id. at 18.
175. James D. Wolfensohn, Foreword to WORLD BANK, WORLD DEVELOPMENT REPORT 1997:
176. THE STATE IN A CHANGING WORLD III (1997).
177. Id.
178. Id.
179. Id. (emphasis added).
180. Id.
181. WORLD BANK LEGAL VICE PRESIDENCY, supra note 26, at 2.
182. Ofosu-Amaah, supra note 52, at 556 (quoting Memorandum from James D. Wolfensohn to the Board, Management, and Staff of the World Bank, A Proposal for a Comprehensive Development Framework: A Discussion Draft (Jan. 21, 1999)).
183. See, e.g., Ha-Joon Chang, The Hazard of Moral Hazard: Untangling the Asian Crisis, 28 WORLD DEV. 775, 776(2000);
184. Ha-Joon Chang et al., Interpreting the Korean Crisis: Financial Liberalisation, Industrial Policy and Corporate Governance, 22 CAMBRIDGE J. ECON. 735(1998) (arguing that the roots of the Korean crisis lie in rapid financial liberalization and dismantling of industrial policy);
185. Jason Furman & Joseph E. Stiglitz, Economic Crises: Evidence and Insights from East Asia, 2 BROOKINGS PAPERS ON ECON. ACTIVITY 1, 15-18 (1998);
186. Chalmers Johnson, Economic Crisis in East Asia: The Clash of Capitalisms, 22 CAMBRIDGE J. ECON. 653(1998);
187. K. S. Jomo, Malaysian Débâcle: Whose Fault?, 22 CAMBRIDGE J. ECON. 707(1998) (emphasizing financial liberalization prior to the crisis in Malaysia);
188. Jonathan Pincus & Rizal Ramli, Indonesia: From Showcase to Basket Case, 22 CAMBRIDGE J. ECON. 723(1998) (tracing the roots of the crisis in Indonesia to a 1980s program of economic liberalization).
189. WORLD BANK, LEGAL AND JUDICIAL REFORM: OBSERVATIONS, EXPERIENCES AND APPROACH OF THE LEGAL VICE PRESIDENCY 1(2002) (emphasis added).
190. WORLD BANK LEGAL VICE PRESIDENCY, supra note 26, at 2.
191. Zolo, supra note 24, at 5 (quoting Carl Schmitt, Legalität und Legitimität in CARL SCHMITT, VERFASSUNGSRECHTLICHE AUFSÄTZE AUS DEM JAHREN 1924-1954 274(1932)) (alteration in original);
192. see also TAMANAHA, supra note 24, at 3
193. (quoting Olufemi Taiwo, The Rule of Law: The New Leviathan?, 12 CANADIAN J. L. & JURISPRUDENCE 151, 152(1999)) ("[T]here are almost as many conceptions of the rule of law as there are people defending it.").
194. Zolo, supra note 24, at 5. For surveys of the how the rule of law is understood in historical and contemporary scholarship, see generally TAMANAHA, supra note 24;
195. MICHAEL J. TREBILCOCK & RONALD J. DANIELS, RULE OF LAW REFORM AND DEVELOPMENT: CHARTING THE FRAGILE PATH OF PROGRESS 12-29 (2008);
196. THE RULE OF LAW: HISTORY, THEORY AND CRITICISM (Pietro Costa & Danilo Zolo eds., 2007).
197. JUSTIN ROSENBERG, THE EMPIRE OF CIVIL SOCIETY: A CRITIQUE OF THE REALIST THEORY OF INTERNATIONAL RELATIONS 78(1994)
198. (citing THUCYDIDES, HISTORY OF THE PELOPONNESIAN WAR 145 (M. Finley ed., 1972));
199. see also Edward M. Harris, Pericles' Praise of Athenian Democracy Thucydides 2.37.1, 94
200. HARV. STUD. CLASS. PHILOLOGY 157, 161(1992) ("Pericles points to the principle of equality before the law for all citizens which the Athenian judiciary follows when resolving private legal disputes.").
201. See WILLIAM E. SCHEUERMAN, BETWEEN THE NORM AND THE EXCEPTION: THE FRANKFURT SCHOOL AND THE RULE OF LAW 68-70 (1994) (discussing Locke's political theory and its contribution to early liberal formulations of the rule of law).
202. FRIEDRICH A. HAYEK, THE ROAD TO SERFDOM 72(1944).
203. See, e.g., JOSEPH RAZ, The Rule of Law and Its Virtue, in THE AUTHORITY OF LAW 210, 212-19 (1979).
204. See id. at 214-16.
205. Zolo, supra note 24, at 7.
206. Id.
207. Id.
208. RANDALL PEERENBOOM, CHINA'S LONG MARCH TOWARD RULE OF LAW 2(2002).
209. Many, but not all such critiques, are from writers working in the Marxist tradition. The most sophisticated Marxist theory of law was developed by the Bolshevik jurist Evgeny Pashukanis, who argued that the very form of law itself is distinctive to capitalist relations. See generally EVGENY B. PASHUKANIS, THE GENERAL THEORY OF LAW & MARXISM (Chris Arthur ed., B. Einhorn trans., Transaction Publishers 2002) (1929). Hostility to bourgeois law can be traced through the work of Marx, although law per se was never the specific object of Marx's inquiry.
210. See generally KARL MARX & FRIEDRICH ENGELS, THE GERMAN IDEOLOGY (C. J. Arthur ed., 1970);
211. KARL MARX, On the Jewish Question, in EARLY POLITICAL WRITINGS (Joseph O'Malley ed., 1994) (1844).
212. CHRISTINE SYPNOWICH, THE CONCEPT OF SOCIALIST LAW 67(1990) (outlining a socialist position on the rule of law).
213. See, e.g., JÜRGEN HABERMAS, TOWARD A RATIONAL SOCIETY 97 (Jeremy J. Shapiro trans., Beacon Press 1971) (1968) ("[T]he property order... legitimates itself through the rationality of the market, the ideology of exchange society, and no longer through a legitimate power structure.");
214. Ellen Meiksins Wood, The Separation of the Economic and the Political in Capitalism, I/127 NEW LEFT REV. 66, 80-81 (1981).
215. SYPNOWICH, supra note 113, at 67.
216. Id.
217. see also SCHEUERMAN, supra note 104, at 97 ("The rule of law is too often a sham in a society with vast social and economic inequalities. Fancy lawyers make sure that the well-to-do criminal remains unpunished, whereas the poor lack the social and economic resources to take advantage of their formal rights.").
218. E. P. THOMPSON, WHIGS AND HUNTERS: THE ORIGIN OF THE BLACK ACT 267(1975).
219. Id.
220. Alan Hunt, A Socialist Interest in Law, I/192 NEW LEFT REV. 105, 117(1992).
221. SYPNOWICH, supra note 113, at 61.
222. A distinction is often drawn between "thin" and "thick" conceptions of the rule of law. See, e.g., PEERENBOOM, supra note 111, at 2-3, 65(2002) (distinguishing between a thin, procedural rule of law and a thick, substantive theory);
223. TREBILCOCK & DANIELS, supra note 102, at 14-23 (identifying and critiquing " 'thick' and 'thin' approaches to theorizing the rule of law"). Joseph Raz has criticized thick theories of the rule of law, insisting on a formal, instrumental conception. Raz, supra note 106, at 211. On his view, the rule of law should not be "confused with democracy, justice, equality (before the law or otherwise), human rights of any kind or respect for persons or for the dignity of man. "
224. Id. Indeed, Raz insists that a non-democratic legal system, "based on the denial of human rights, on extensive poverty, on racial segregation, sexual inequalities, and religious persecution may, in principle, conform to the requirements of the rule of law better than any of the legal systems of the more enlightened Western democracies."
225. Id.
226. See Dam, supra note 6, at 14;
227. TREBILCOCK & DANIELS, supra note 102, at 13
228. (quoting Rachel Kleinfeld, Competing Definitions of the Rule of Law, in PROMOTING THE RULE OF LAW ABROAD 31, 31-32 (Thomas Carothers ed., 2006)). Competing definitions are not necessarily consistent with one another. For instance, in the realm of human rights, some writers argue that respect for human rights is a component of the rule of law, while others insist that without the rule of law, human rights cannot possibly be respected or protected. Compare Dam, supra note 6, at 14 (suggesting respect for human rights may be a component of the rule of law)
229. with OFFICE OF THE UNITED NATIONS HIGH COMMISSIONER FOR HUMAN RIGHTS, GOOD GOVERNANCE PRACTICES FOR THE PROTECTION OF HUMAN RIGHTS 1(2007) (arguing that without the rule of law and good governance generally, "human rights cannot be respected and protected in a sustainable manner").
230. DAM, supra note 6, at 14. Dam, for his part, dismisses such an approach in his own analysis of links between law and development with an appeal to unspecified "ambiguities."
231. Id. The exclusion of human rights protection from the rule of law alone receives cursory explanation: "Any attempt to deal with the indisputably important issue of human rights would have to confront the absence of empirical information on the relation of human rights to economic development. Most discussions of human rights are either aspirational or devoted to the recounting of horror stories about abuses."
232. Id. at 14. The absence of a literature justifies elision of analysis. Dam instead focuses on a narrower, but familiar, institutional recipe: the protection of property rights, the enforcement of contracts, and a judiciary capable of achieving these goals. Id. at 7-14. Why, in an analysis of how the rule of law is linked to development, should we consider only these institutions? In a question-begging explanation, he states that these can be said with certainty to contribute to economic development.
233. Id. at 14.
234. * (Aug. 23, 2004).
235. INT'L BAR ASS'N, RESOLUTION OF THE COUNCIL OF THE INTERNATIONAL BAR ASSOCIATION OF OCTOBER 8, 2009, ON THE COMMENTARY ON RULE OF LAW RESOLUTION 2(2005), available at http://www.ibanet.org/Document/Default.aspx?DocumentUid= 9925C6FD-5804-407F-9D39-ECB9D6A8B9D4.
236. WORLD BANK, WORLD DEVELOPMENT REPORT 2002: BUILDING INSTITUTIONS FOR MARKETS 7(2002).
237. WORLD BANK LEGAL VICE PRESIDENCY, supra note 26, at 2-3.
238. HARRISON, supra note 11, at 122;
239. see also ALAIN SUPIOT, HOMO JURIDICUS: ON THE ANTHROPOLOGICAL FUNCTION OF THE LAW 78-109 (2007) (critiquing the general extension of the contract form as the organizing principle of social relations in contemporary society).
240. Wolfensohn, supra note 91, at 36.
241. Id. at 5.
242. Id. at 32.
243. WORLD BANK, supra note 99, at 3.
244. Id. at 2.
245. Id.
246. The law's market-facilitating role was foreshadowed in Bank reports in the 1990s. See, e.g., WORLD BANK, supra note 86, at 37 (arguing, inter alia, the importance of contract enforcement "for conducting efficient private economic activities").
247. Ibrahim F. I. Shihata, Judicial Reform in Developing Countries and the Role of the World Bank, in JUDICIAL REFORM IN LATIN AMERICA AND THE CARIBBEAN 13, 13 (Malcolm Rowat, Waleed H. Malik & Maria Dakolias eds., 1995).
248. This view has clear affinities with the law and economics movement, which is prominent on law school campuses and now exerting a growing influence on the judiciaries of many countries. For a trenchant critique of this approach to the law, see Supiot, supra note 128, at 83-86 (arguing that the view of law prized by the law and economics movement undermines the anthropological function of the law as a dogmatic, socially constitutive force);
249. Tor Krever, Calling Power To Reason?, 65 NEW LEFT REV. 141(2010) (my discussion of Supiot's book).
250. I do not mean to suggest that all Bank law reform projects have this goal. Certainly the Bank funds projects on law reform which are justified not by increased growth but other normative goals. Cf. Gordon Barron, The World Bank & Rule of Law Reforms (Dev. Studies Inst. Working Paper No. 05-70, 2005) (concluding that there is an "absence of a guiding theory in the Bank's work"). The Bank's work on legal and judicial reform is undertaken by several different internal divisions.
251. See Santos, supra note 7 at 253 (describing in some detail how conceptual confusion and differing normative visions often result in disagreement or even competing goals). However, a distinction must be drawn between rationales for individual law reform projects, on the one hand, and the role of law and the rule of law in a theory of economic development, on the other.
252. Victoria Harris, Consolidating ideology in law? Legal and judicial reform programmes at the World Bank, BRETTON WOODS PROJECT (July 25, 2007), http://www.brettonwoodsproject.org/art-554671.
253. Poonam Gupta et al., Legal and Judicial Reform in Europe and Central Asia v (World Bank Operations Evaluation Dep't Working Paper, 2002).
254. See generally Daniel Kaufmann et al., Governance Matters (World Bank Policy Research Working Paper No. 2196, 1999);
255. Daniel Kaufmann et al., Governance Matters IV: Governance Indicators for 1996-2004 (World Bank Policy Research Working Paper No. 3630, 2005);
256. Daniel Kaufmann et al., Governance Matters VIII: Aggregate and Individual Governance Indicators 1996-2008 (World Bank Policy Research Working Paper No. 4978, 2009).
257. Kaufmann, Governance Matters VIII, supra note 141, at 1.
258. Id. at 6.
259. See Daniel Kaufmann et al., Governance Matters V: Governance Indicators for 1996-2005 (World Bank Policy Research Working Papers No. 3630, 2006) (discussing the methodology used to produce the WGI composite indicators);
260. see also CHRISTIANE ARNDT AND CHARLES OMAN, USES AND ABUSES OF GOVERNANCE INDICATORS 50-64 (2006). The WGI also incorporate several household surveys, although these are a distinct minority, suggesting a sample bias in favor of business-oriented perceptions of the rule of law.
261. Id.
262. WORLD BANK, DOING BUSINESS 2004: UNDERSTANDING REGULATION 1(2004). Elsewhere, the project's creators note that they seek to establish "the scope and manner of regulations that enhance business activity and those that constrain it."
263. Id. at viii.
264. WORLD BANK, DOING BUSINESS 2010: REFORMING THROUGH DIFFICULT TIMES v (2009).
265. Id. The original 2004 report included data on only five areas of law in 133 countries.
266. See World Bank, supra note 145, at 1.
267. See, e.g., WORLD BANK, supra note 146;
268. WORLD BANK, DOING BUSINESS 2009(2008);
269. WORLD BANK, DOING BUSINESS 2008(2007);
270. WORLD BANK, DOING BUSINESS 2007:
271. HOW TO REFORM (2006) [hereinafter DOING BUSINESS2007];
272. WORLD BANK, DOING BUSINESS 2006: CREATING JOBS (2005);
273. WORLD BANK, DOING BUSINESS 2005: REMOVING OBSTACLES TO GROWTH (2004);
274. WORLD BANK, supra note 146;
275. see also Kevin E. Davis & Michael B. Kruse, Taking the Measure of Law: The Case of the Doing Business Project, 32 L. & SOC. INQUIRY 1095, 1098-1102 (2007) (describing the Doing Business methodology);
276. Alvaro Santos, Labor Flexibility, Legal Reform, and Economic Development, 50 VA. J. INT'L L. 43, 61-65 (2009) (discussing the Doing Business methodology).
277. WORLD BANK, supra note 146, at 78-80.
278. Id. at 82-83.
279. WORLD BANK, supra note 145, at 93.
280. The 2007 report announces that "[s]ince its start in October 2003, the Doing Business project has inspired or informed 48 reforms around the world, " including reform in Mozambique, Burkina Faso, Mali, Niger and Georgia. DOING BUSINESS 2007, supra note 148, at 3-4.
281. According to one study, "[o]ne standard deviation higher on the [index] of rule of law... correspond[s] to 28% more overall aid and 50% more finance from the World Bank IDA facility...." Craig Burnside & David Dollar, Aid, Policies, and Growth: Revisiting the Evidence 7 (World Bank Policy Research Working Paper No. 3251, 2004);
282. see also ARNDT & OMAN, supra note 144, at 39 ("[D]onors now pay considerable attention to the quality of political governance in recipient countries when making their aid-allocation decisions."). Aid dispersed under the United States' Millennium Challenge Account (MCA), for example, is determined on the basis of, inter alia, WGI and Doing Business scores.
283. See MILLENNIUM CHALLENGE CORPORATION, REPORT ON THE CRITERIA AND METHODOLOGY FOR DETERMINING THE ELIGIBILITY OF CANDIDATE COUNTRIES FOR MILLENNIUM CHALLENGE ACCOUNT ASSISTANCE IN FISCAL YEAR 2010 3-4 (2009) (explaining eligibility for MCA assistance);
284. About the Indicators for Fiscal Year 2010, MILLENNIUM CHALLENGE CORPORATION (Sept. 11, 2009), http://www.mcc.gov/documents/press/factsheet- 091109-indicators-for-fy10.pdf (explaining eligibility for MCA assistance);
285. see also WALDEN BELLO, DILEMMAS OF DOMINATION: THE UNMAKING OF THE AMERICAN EMPIRE 184-85 (2005) (arguing that the MCA represents a "rightwing transformation of aid policy" which aims "not just to accelerate market reform but, equally, to push political reform along narrow Western lines");
286. MARY M. SHIRLEY, INSTITUTIONS AND DEVELOPMENT: ADVANCES IN NEW INSTITUTIONAL ANALYSIS 91(2008). USAID also supports the Doing Business project; Andrew S. Natsios, administrator of USAID, stated of the project in 2005, "[C]ountries that are willing to embark on serious reforms in these areas will find ready and willing support from the donors...." Santos, supra note 148, at 60.
287. Wade, supra note 14, at 3-4. Wade uses the term to describe the Bank's response to a growing challenge, championed by Japan in the late 1980s, to the Bank's "core ideas about the role of the state" in economic development.
288. Id.
289. ERIK S. REINERT, HOW RICH COUNTRIES GOT RICH... AND WHY POOR COUNTRIES STAY POOR 204-05 (2007) ("[I]f we just 'get the prices right' plus this or that factor, poor countries will achieve growth....").
290. Id. at 205 ("When it comes to practical policy recommendations... the original commandments are still applied.").
291. WORLD BANK, supra note 99, at 17.
292. Id. at 4.
293. DEEPAK LAL, THE POVERTY OF 'DEVELOPMENT ECONOMICS' 226 (3d ed. 2002). This concern is also apparent in the Bank's increased focus on good governance and in its rhetoric concerning civil society.
294. See, e.g., WORLD BANK, supra note 86, at 13-26, 49;
295. WORLD BANK, supra note 85, at 61;
296. Williams & Young, supra note 23, at 87 ("The Bank's promotion of civil society is linked to its promotion of accountability, legitimacy, transparency and participation as it is these factors which empower civil society and reduce the power of the state.").
297. KARL POLANYI, THE GREAT TRANSFORMATION 143 (Beacon Press 1957) (1944).
298. Id.
299. Id.
300. Alain Supiot has characterized this approach to law as the rise, over the past three decades, of an "anarcho-capitalism that sees the market as the Grundnorm of every national regulatory order; a metajuridical principle that must be imposed on every aspect of social life in every country, leading eventually to the withering-away of the state." Alain Supiot, Law and Labour, 39 NEW LEFT REV. 109, 115(2006). The ultimate horizon of this approach, he argues, is to view law as "just another product competing in a world market where natural selection will single out systems best adapted to commercial needs. Instead of free competition being founded on the law, law is to be founded upon free competition. "
301. Id.
302. Bateman and Chang suggest that the recent popularity of microfinance may be similarly explained with reference to its "political/ideological serviceability" to the prevailing neoliberal model, particularly its emphasis on "individual entrepreneurship over all other forms (state, cooperative, etc.)." Bateman & Chang, supra note 48, at 6.
303. See generally PETER LINEBAUGH, THE LONDON HANGED: CRIME AND CIVIL SOCIETY IN THE EIGHTEENTH CENTURY (1991);
304. E. P. THOMPSON, CUSTOMS IN COMMON (1992).
305. SHIHATA, supra note 11, at 85.
306. See, e.g., HA-JOON CHANG, KICKING AWAY THE LADDER: DEVELOPMENT STRATEGY IN HISTORICAL PERSPECTIVE 2(2002) ("[T]he developed countries did not get where they are now through the policies and the institutions that they recommend to developing countries today. Most of them actively used 'bad' trade and industrial policies... practices that these days are frowned upon, if not actively banned, by the WTO.");
307. PETER EVANS, EMBEDDED AUTONOMY: STATES AND INDUSTRIAL TRANSFORMATION 51-60 (1995) (discussing the role of the state in facilitating industrial transformation in Korea and Taiwan);
308. REINERT, supra note 155, at 71-100 (arguing that developmental success has relied on "emulation" rather than comparative advantage or free trade);
309. RICHARD KOZUL-WRIGHT, THE MYTH OF ANGLO-SAXON CAPITALISM: RECONSTRUCTING THE HISTORY OF THE AMERICAN STATE, IN THE ROLE OF THE STATE IN ECONOMIC CHANGE (Ha-Joon Chang & Robert Rowthorn eds., 1995) (discussing the history of U. S. industrial development strategy);
310. see also sources cited supra note 68.
311. See generally PAUL BAIROCH, ECONOMICS AND WORLD HISTORY: MYTHS AND PARADOXES (1993) (arguing, in particular, against orthodox assessments of the trade policies pursued by the developed world and their effects on those countries' economic development).
312. See, e.g., HA-JOON CHANG, THE POLITICAL ECONOMY OF INDUSTRIAL POLICY (1994) (providing a comprehensive discussion of industrial policy, including the role of the state in coordinating investment, and its application in South Korea);
313. Ha-Joon Chang, The Political Economy of Industrial Policy, in GLOBALIZATION, ECONOMIC DEVELOPMENT AND THE ROLE OF THE STATE 105, 118-20 (2003) [hereinafter Chang, Political Economy of Industrial Policy] (discussing the role of the state in coordinating investment);
314. Ricardo Hausmann & Dani Rodrik, Doomed to Choose: Industrial Policy as Predicament 37-38 (Sept. 2, 2006) (unpublished manuscript), available at http://www.hks.harvard.edu/var/ezp-site/storage/fckeditor/file/pdfs/ centers-programs/centers/cid/growth/events/20060909/hausmann-doomed-0609.pdf (discussing how governments may be important actors in overcoming and correcting coordination failures).
315. See, e.g., Justin Lin & Ha-Joon Chang, Should Industrial Policy in Developing Countries Conform to Comparative Advantage or Defy It? A Debate Between Justin Lin and Ha-Joon Chang, 27 DEV. POLICY REV. 483, 484, 489(2009);
316. CHANG, Political Economy of Industrial Policy, supra note 168, at 130-35;
317. CHANG, State, Institutions and Structural Change, supra note 5, at 45;
318. Sanjaya Lall, Technological Capabilities and Industrialization, 20 WORLD DEV. 165, 165(1992).