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Introduction to the theory of Law and Development

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Title: Introduction to the theory of Law and Development


1
Introduction to the theory of Law and Development
  • by
  • Chen Lei
  • University of Stellenbosch
  • Presentation for Land Law Forum
  • 20 September 2005

2
Introduction
  • Law and development, as an academic field in the
    US, began in the 1940s, thrived in the middle to
    late 1960s, and was declared dead by its
    advocates in late 1970s.
  • This study can be said to have been a short-lived
    movement.
  • However, quite recently, this field of study has
    experienced a resurgence as signaled by some
    far-reaching academic writings by legal scholars,
    economists and NGOs.

3
Main Arguments
  • How to restructure the economy to create economic
    growth.
  • How to institute a legal infrastructure that
    maximizes the rule of law while sustainable
    economic development are promoted.

4
Hypothesis
  • Neo-classical
  • Formal property institutions with clearly defined
    property rights is essential to the functioning
    of a market economy and sustained economic
    growth,
  • on the other hand recent commentary suggests that
    a causal link between the clarity of property
    rights and market efficiency is also necessary.
  • Development should also include economic and
    political factors.
  • See Carty, Kennedy and De Soto

5
Background
  • Law and development theory are inherently related
    to international political and economic events.
  • It began in the late 1940s with the design of a
    postwar order and the independence of former
    colonies.
  • The objective of this theory is to promote the
    adoption of western-like institutions and
    western-oriented legal infrastructures.
  • This theory has recently gained new impetus with
    the collapse of the Soviet Union and the
    reassessment of the value of centralized
    planning.

6
Main Representatives
  • Origin Webers thesis The relationship between
    rational law and economic development.
  • Rational, formal and logical law
  • Founders David Trubek, Douglas North.
  • Revivalists Anthony Carty 1992, Hernando De Soto
    and David Kennedy.

7
Evaluation
  • Advantages (Institutionalist view)
  • Law and development theory provides a very
    reliable theory for sustainable development in
    developing countries.
  • Especially because quite a few developing
    countries in Africa, Latin America and Asia lack
    a unified and all-encompassing property system to
    capitalize on marketable assets in especially
    land.

8
Evaluation
  • To achieve a sustainable market economy with a
    unified, impartial, and efficient legal
    framework, law and development theory contributes
    a logical framework.
  • Some developing countries achieved positive
    results by using this theory.
  • E.g. South Korea, Singapore, Thailand and
    Malaysia.

9
  • As a theoretical tool, Law and development theory
    contributes significantly to the accelaration of
    globalization of international markets.
  • The Law and development theory is itself still in
    a process of self-development and introspection.
  • This allows for the adaptation of new social,
    political and economic transformations.

10
Evaluation
  • Disadvantages (Cultural view)
  • Motivation Legal transplantation legal
    imperialism
  • A real assistance for developing countries?
  • Some political purpose behind this study----to
    bring those developing countries within the orbit
    of the West instead of the Soviet bloc.

11
Evaluation
  • Every jurisdiction is politically, culturally,
    economically, and socially contingent.
  • Legal denationalization - Legal liberalism
  • Direct transplantation without corresponding
    adjustments

12
Evaluation
  • A flawed and rather inept attempt to offer
    American legal assistance and implicit American
    models were themselves flawed, vulnerable to
    executive ordering and authoritarian
    abuse.----James Gardner
  • Example Ethiopia Civil Code of 1966

13
  • 3 Convergence v. divergence
  • The study of law and development which is based
    on so-called rational law will lead to legal
    globalization.
  • It was and will never be the case for
    globalization of all kinds of jurisdictions in
    the world due to the diversity of pluralism and
    different backgrounds.

14
Evaluation
  • The right and indispensable way to promote
    sustainable economic growth in different
    countries is to formalize a corresponding legal
    framework, which is compatible with its
    political, economic and cultural situation.
  • Different countries has different unique
    historical background and current problems. Those
    divergent problems, which are existed in
    different countries, cannot be resolved in one
    formula.
  • No elixir Culture matters.

15
Evaluation
  • Independence v dependency
  • Political independence v. economic and legal
    dependency right of development.

16
Law Development Theorys impact on the South
African Land Reform Programme
  • Application the relationship between property
    institutions (land) and economic development
    through a survey of the institutional changes of
    property rights in post-apartheid South Africa.

17
Land redistribution or restitution is extremely
necessary and urgent
  • Without land redistribution, democracy would not
    be a real democracy.
  • The current situation of land occupancy is a
    colonial and apartheid legacy which is starkly
    contrast with democracy and social justice.

18
Utilization of land use rights (land tenure)
  • The apartheid land distribution vested 87 percent
    of South Africa's land area in the hands of the
    white minority. Hence, a legal framework for the
    states acquisition of land for resettlement
    purposes and enforcement mechanism are very
    necessary.
  • Three ways

19
Utilization of land use rights
  • State compensation for land expropriation
    according to market value, or at least justified
    value.
  • This method is appealed to those land which is
    not fully utilized and wisely developed in order
    to increase the land productivity. Also, it is
    suitable for those land which influences the
    public construction for public interests.
  • Comment a direct way but must be applied very
    carefully. It is only appealed to a smidgen of
    land. However, it is still worthwhile and cannot
    be discarded.

20
Utilization of land use rights
  • The policy of fair State buy-out on the basis of
    willing seller and willing buyer principle.
  • This method is appealed for those landowners who
    are willing to sell their commercial farms and
    accept price offer from state.
  • Comments it is also a direct way and easy to be
    managed by the state. However, such both-win
    success can be only achieved under a special
    circumstance, namely a willing sell. Also, land
    willing sellers are not the majority of white
    landowners therefore the ensuing method is
    introduced.

21
Utilization of land use rights
  • Introduction of land use right
  • separation of land ownership and land use right
    is a suitable and reliable way at this stage to
    carry out land reform in South Africa.
  • The reasons first of all, the psychological
    adherence to land by white landowners---generation
    s by generations--succession
  • secondly, the purpose of land reform is to keep
    country stable and peaceful

22
Utilization of land use rights
  • thirdly to comfort white landowners by
    maintaining or balancing their economic status in
    a progressive way
  • fourthly, it is a double-win if white landowners
    retain the land titles while simultaneously vast
    majority of black people use and enjoy the land.

23
  • 3 ABS (asset-backed securities)
  • It is kind of co-op to make farm workers become
    shareholders. This form can be compared with
    shareblock ownership to make sense.

24
Main theories of land reform
  • Productivity theory (economic analysis of law)
  • State stability and prosperity theory
  • Social justice theory---democracy---crimes
  • Balance theory---must take both sides interests
    into consideration
  • Transaction cost theory

25
Suggestions
  • 1 Land reform and tax reform. Reduce land tax
    and other kinds of agricultural tax to comfort
    white landowners.
  • 2 Strengthen NGOs role many staff of the
    department of land affairs had come from the
    NGO sector, which has been a tremendously
    important source of knowledge and skills, and
    the Department intended to rely heavily on NGOs
    for implementation of its programs.

26
Suggestions
  • 3 Effectiveness of local government
  • 4 Department of Agriculture staff remain
    committed to agricultural development scenarios
    based on an expansion to the black community of
    older models of large-scale mechanized
    commercial farming.

27
Suggestions
  • The Department of Land Affairs staff and the Land
    NGOs are more aware of the success in other
    African countries in modernizing smallholder
    agriculture, but are perhaps insufficiently
    concerned about productivity and how increases
    can be achieved in the reform sector.
  • Joint training exercises for staff of the two
    departments, which would focus on reconciling
    theclaims of equity and productivity, was
    recommended as a partial solution.

28
Suggestions
  • 5 Haste makes waste. Land reform is a
    progressive project, which cannot be applied in
    a very ruthless and forceful manner

29
International Examples China
  • China - from 1949 to 1956
  • Pay money and interests to former private owners
    by the state
  • Differences
  • a. The same race in China (Racial homogeneity)
  • b. The land convergence is not as serious as in
    SA
  • c. Different political system, i.e. ideology
  • d. Result of civil war (from the political
    economic perspective, is a consequence of
    a violent revolution)

30
International Examples USA
  • US - 17 and 18 centuries
  • Land is not scarce
  • The population of native groups was small
  • USs government has a political motive to expand
    its territory
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