What Can the Rule of Law Variable Tell Us About Rule of Law Reforms?

Abstract

The recent resurgence of optimism regarding the role of legal reforms in promoting development seems to be based in part upon cross-country statistical analyses that purport to show causal relationships between variables measuring characteristics of legal institutions and variables measuring levels of various kinds of development. However, the persuasiveness of these analyses is limited by the quality of the legal data upon which they rely. As it turns out, many of the variables that are commonly used to measure respect for the rule of law, enforcement of property rights and contracts do not capture information capable of shedding light upon the potential impact of purely legal reforms. In some cases the variables capture the interaction between legal and non-legal features of society. In other cases they aggregate the effects of a large number of legal institutions. In still other cases they capture information about features of legal systems that are not amenable to reforms.