Summary General Theory of Law and Development

General Theory of Law and Development Yong-Shik Lee† Although scholarship in law and development that explores the relationship between law and social and economic progress has evolved over the last four decades, this area of inquiry remains unfamiliar to many legal scholars, lawyers, and policy makers. Scholars have not yet been able to develop a theory that systematically explains the interrelationship between law and development, which would establish law and development as a robust and coherent academic field. This Article attempts to fill this gap by presenting a general theory that defines the disciplinary parameters of law and development, and explains the mechanisms by which law impacts development. This Article also demonstrates the validity of this general theory by applying it to an empirical case and also by explaining the development process of South Korea (1962– 1996) under its analytical framework. The concept of development, which has traditionally been associated with developing countries, may also be extended to address economic problems in developed countries today. Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 I. Law and Development: History and Context . . . . . . . . . . . . . . 420 A. Law and Development “Movements” . . . . . . . . . . . . . . . . . . . 420 B. “Law” in the Context of Law and Development. . . . . . . . . 423 1. Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 2. Legal Frameworks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 † Director and Professorial Fellow, The Law and Development Institute and Distinguished Scholar in Residence, Emory University School of Law (2015– 2016). The author is grateful to leading scholars who read earlier versions of this manuscript and gave helpful comments, including Professors Frank Upham (New York University), Simon Deakin (University of Cambridge), Tom Ginsburg (University of Chicago), Reuven Avi-Yonah (University of Michigan), Alvaro Santos (Georgetown University), Paul J. Zwier (Emory University), Francis Snyder (Peking University), Moshe Hirsch (Hebrew University of Jerusalem), Klaus Ziegert (University of Sydney), William H.J. Hubbard (University of Chicago), Jide Okechuku Nzelibe (Northwestern University), Tim Murphy (Universidad Carlos III de Madrid), Diogo R. Coutinho (University of S˜ao Paulo), Wouter Vandenhole (University of Antwerp), Markus Kaltenborn (Ruhr University Bochum), Alexander Volokh (Emory University), Salim Farrar (University of Sydney), Pedro Rivas Pal´a (Universidad de La Coru˜na), Stephanie de Moerloose (Universidad Austral), T.K. Pooe (North West University), Alessandro Romano (China-EU School of Law), Won-Mog Choi (Ewha Womans University), Dae In Kim (Ewha Womans University), Junji Nakagawa (University of Tokyo), Jon Mark Truby (Qatar University), and Dr. Johan Rochel (University of Tokyo). The author also thanks Ms. Kari Bloom, Mr. Ryan Layton, Mr. Brian McKeegan, Mr. Clinton Odel Hall, Mr. Robert Sroka, Ms. Qi Bao, Dr. Hye Seong Mun, and the editorial staff of Cornell International Law Journal for their editorial and research assistance. 50 CORNELL INT’L L.J. 415 (2017) 416 Cornell International Law Journal Vol. 50 3. Institutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 426 II. The Question of Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . 428 A. What Constitutes Development? . . . . . . . . . . . . . . . . . . . . . . . 428 B. Economic and Social Development . . . . . . . . . . . . . . . . . . . . 430 C. Extension of the Concept of Development. . . . . . . . . . . . . . 432 III. Regulatory Impact Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 A. Regulatory Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 436 1. Anticipated Policy Outcome . . . . . . . . . . . . . . . . . . . . . . . . . 436 2. Organization of Law, Legal Frameworks, and Institutions (LFIs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 441 3. Adaptability to Socioeconomic Conditions . . . . . . . . . . . . 444 B. Regulatory Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 446 1. General Regulatory Compliance . . . . . . . . . . . . . . . . . . . . . 447 2. Specific Regulatory Compliance . . . . . . . . . . . . . . . . . . . . . 448 C. Quality of Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . 450 1. Definition and Importance . . . . . . . . . . . . . . . . . . . . . . . . . 450 2. State Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451 3. Political Will . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454 IV. Application of the General Theory . . . . . . . . . . . . . . . . . . . . . . . . 456 A. Development of South Korea (1962– 1996): An Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 456 B. Applying the General Theory . . . . . . . . . . . . . . . . . . . . . . . . . . 458 1. Applying the Disciplinary Parameters. . . . . . . . . . . . . . . . 458 2. Regulatory Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 458 3. Regulatory Compliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 4. State Capacity and Political Will . . . . . . . . . . . . . . . . . . . . 465 Conclusion: Does Law Matter for Development? . . . . . . . . . . . . . . . . . . 468 Introduction Law has become the framework and vocabulary for constructing and debating development policies,1 but law and development, an area of scholarship that explores the relationship between law and economic and social progress,2 is relatively unknown and underdeveloped as an academic field 1. Development policies since the 1990s have been conceived and constructed in the notion of legal rights. See David Kennedy, The “Rule of Law,” Political Choices, and Development Common Sense, in THE NEW LAW AND ECONOMIC DEVELOPMENT: A CRITICAL APPRAISAL 95, 167 (David M. Trubek & Alvaro Santos eds., 2006) (discussing the changing roles of law, economics, and politics in the context of development policies). 2. Law and development, as an area of scholarship, is indeterminate and heterogeneous. Reflecting on these characteristics, Scott Newton commented, “It [law and development] does not appear to possess a particular normative armature or notable thematic consistency or much of a unifying logic or set of organizing principles. The most one can say is that the disciplinary range of L&D is constituted by the aggregate of studies pursued by its self-identifying adherents.” Scott Kennedy, The Dialectics of Law and Development, in NEW LAW AND ECONOMIC DEVELOPMENT, supra note 1, at 177. The noted indeterminacy, lack of disciplinary clarity, and absence of an underpinning theory that systematically explains the interrelations between law and development have retarded its development as a coherent academic field. 2017 General Theory of Law and Development 417 despite decades of research.3 Leading scholars, such as Trubek and Galanter (1974),4 Merryman (1977),5 Snyder (1982),6 North (1991),7 Tamanaha (1995),8 Chibundu (1997),9 Posner (1998),10 Chua (1999),11 Cross (2001),12 Davis and Trebilcock (2001),13 Barr and Avi-Yonah, (2005),14 McInerney (2005),15 Chodosh (2006),16 Dam (2006),17 Chukwumerije (2009),18 and Prado (2009)19 have addressed a range of issues in law and development. These scholars have called for, inter alia, new approaches, including comparative ones, with references to the local context and conditions, as well as theoretical underpinnings that better explain the dynamics among law, institutions, and the existing political, social, and economic conditions. In response to these calls, particularly the one requiring the theoretical underpinnings, this Article presents a general theory of law and develop3. For a review of law and development scholarship, see Kevin E. Davis & Michael Trebilcock, The Relationship between Law and Development: Optimists versus Skeptics, 56 AM. J. COMP. L. 895 (2008); and David M. Trubek, Law and Development 50 Years On (University of Wisconsin Legal Studies Research Paper No. 1212, 2012), http:// Call for a New Analytical Model for Law and Development, 8 LAW & DEV. REV. 1, 10– 27 (2015). 4. See David M. Trubek & Marc Galanter, Scholars in Self-Estrangement: Some Reflections on the Crisis in Law and Development Studies in the United States, WIS. L. REV. 1062 (1974). 5. See 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 (1977). 6. See Francis G. Snyder, The Failure of “Law and Development,” WIS. L. REV. 373 (1982); see also Francis G. Snyder, Law and Development in the Light of Dependency Theory, 14 LAW & SOC’Y REV. 723 (1980). 7. See Douglas C. North, Institutions, 5 J. ECON. PERSP. 97 (1991). 8. See Brian Z. Tamanaha, The Lessons of Law-and-Development Studies, 89 AM. J. INT’L L. 470 (1995). 9. See Maxwell O. Chibundu, Law in Development: On Tapping, Gourding and Serving Palm-Wine, 29 CASE W. RES. J. INT’L L. 167 (1997). 10. See Richard A. Posner, Creating a Legal Framework for Economic Development, 13 WORLD BANK OBSERVER 1 (1998). 11. See Amy Chua, Markets, Democracy, and Ethnicity: Toward A New Paradigm for Law and Development, 108 YALE L.J. 1 (1998). 12. See Frank B. Cross, Law and Economic Growth, 80 TEX. L. REV. 1737 (2001). 13. See Kevin E. Davis & Michael J. Trebilcock, Legal Reforms and Development, 22 THIRD WORLD Q. 21 (2001). 14. See Michael S. Barr & Reuven S. Avi-Yonah, Globalization, Law and Development, 26 MICH. J. INT’L L. 1 (2004). 15. See Thomas F. McInerney, Law and Development as Democratic Practice, 38 VAND. J. TRANSNAT’L L. 109 (2005). 16. See HIRAM CHODOSH, GLOBAL JUSTICE REFORM: A COMPARATIVE METHODOLOGY (2005). 17. See KENNETH W. DAM, THE LAW-GROWTH NEXUS: THE RULE OF LAW AND ECONOMIC DEVELOPMENT (2006). 18. See Okezie Chukwumerije, Rhetoric Versus Reality: The Link Between the Rule of Law and Economic Development, 23 EMORY INT’L L. REV. 383 (2009). 19. See Mariana Prado, Should We Adopt a “What Works” Approach in Law and Development?, 104 NW. U.L. REV. 174 (2009).