Growth and Development: Economic and Legal Conditions

Abstract

The evidentiary data detailing the economic state of low-income developing and least developed countries ('LDC's) is both well known and relatively uncontroversial. On the whole, these nations can be characterised as having a low per capita gross domestic product ('GDP'), unfortunate standards of living and extremely poor levels of health and services. Fortunately, a number of developing countries and LDCs are not experiencing negative or stagnant growth. Some developing countries are growing at a rapid pace - and some African countries are even growing at a faster rate than developed countries.

It is for this reason that the question must be asked: why are some developing countries and LDCs growing while others are essentially stagnating in a 'poverty trap'? The simple answer is that these stagnant countries generally have, inter alia, low levels of education and training, a decrepit or non-existent infrastructure, ever-present (or often recurring) ethnic and civil instability, and high levels of corruption and mismanagement in both the public and private sector. While the reasons stated may be causes and may be symptoms, no one can for certain state all the reasons why some nations have succeeded and others have failed.

This article does not presume to know or attempt to solve all the problems of the developing world. This article is also not meant to be a definitive study, but instead merely introduces the issues and, while offering recommendations and conclusions, hopes to spark genuine debate. More specifically, this article suggests several basic international conditions which appear to be necessary to improving living standards and growth: (1) open and liberalised economic engagement; (2) export-oriented trade strategies; and (3) an appropriate legal and regulatory framework.

Keywords: international trade law, investment, liberalization, growth, development, regulatory framework

JEL Classification: K33, O10, F10