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World Justice Project report on the rule of law [ClearOnMoney]
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Commentary

World Justice Project report on the rule of law

16 Oct 2010 by Jim Fickett.

A new study on the rule of law in 35 countries differs from previous efforts by emphasizing the actual experience of ordinary citizens. North America and Western Europe, as a region, rank at the top of a set of seven regions. However the US ranks 6th among the 7 countries studied within that region. A long-standing problem is access to the civil justice system. Another area of concern is limits on government power.

The US remains one of the best places in the world to invest. Not, certainly, for the current state of the economy, but for the strength of property rights, contracts, and open information. To a large extent, this is saying that the US is attractive because it is among the nations respecting the rule of law.

From time to time one sees various measures of corruption, or the strength of contracts, etc, in various countries. This week one such study came out which seems to me to be particularly useful. Naked Capitalism pointed yesterday to a study on the rule of law across 35 countries. This comes from The World Justice Project, who say about themselves

Our mission is to lead a global, multidisciplinary effort to strengthen the Rule of Law for the development of communities of opportunity and equity.

The credibility of the organization seems quite high. They are funded by many of the major foundations, and sponsored by, among many others, several national and international bar associations.

The authors of the study felt that previous work in this area had depended too much on official accounts, and not enough on the experience of the average citizen. Regarding the law itself, that implies some degree of equal treatment, so, to take an extreme example, a system in which a despot rules on the basis of the single law, that everyone must do as he says, should not score highly for “rule of law”. Regarding the measurement underlying the report, it meant putting questions to many individual citizens and lawyers, rather that too much reliance on official statistics.

The four “universal principles” for the rule of law, according to TJP, are as follows:

  • The government and its officials and agents are accountable under the law.
  • The laws are clear, publicized, stable, and fair, and protect fundamental rights, including the security of persons and property.
  • The process by which the laws are enacted, administered, and enforced is accessible, fair, and efficient.
  • Access to justice is provided by competent, independent, and ethical adjudicators, attorneys or representatives, and judicial officers who are of sufficient number, have adequate resources, and reflect the makeup of the communities they serve.

Adherence to these principles is broken down into 10 Factors, and each of these into several sub-factors. The Factors are

  1. Limited government powers
  2. Absence of corruption
  3. Clear, publicized and stable laws
  4. Order and security
  5. Fundamental rights
  6. Open government
  7. Regulatory enforcement
  8. Access to civil justice
  9. Effective criminal justice
  10. Informal justice

And, to take one example, the sub-factors under the first factor, “Limited government powers”, are:

  1. Government powers are effectively limited by the fundamental law
  2. Government powers are effectively limited by the legislature
  3. Government powers are effectively limited by the judiciary
  4. Government powers are effectively limited by independent auditing and review
  5. Government officials are sanctioned for misconduct
  6. Freedom of opinion and expression
  7. The State complies with international law
  8. Transition of power occurs in accordance with the law

Now, about the USA

The study treats each of 35 countries in depth. The short summary on how the US fares in this study is

  1. North America and Western Europe are, as a group, at the top of the list
  2. The US, as one member of that group, is near the bottom

Illustrating the first point, when 7 world regions are scored by average ranking of the countries within the regions, the region “Western Europe and North America” comes out at the top of the list for each of the 9 factors.

Within the “Western Europe and North America” region, the rankings are as follows (note the 10th factor has not yet been treated by TJP):

Country Government Corruption Law Order Rights Open Regulatory Civil Criminal Average
Sweden 1 1 1 2 2 1 1 1 2 1.3
Netherlands 2 2 2 5 3 2 2 2 3 2.6
Austria 3 3 4 1 1 6 3 3 1 2.8
Canada 4 4 3 3 4 4 4 5 6 4.1
France 6 5 5 4 6 5 6 6 4 5.2
US 7 7 6 6 7 3 5 7 5 5.9
Spain 5 6 7 7 5 7 7 4 7 6.1

I have added an average ranking just to give some idea of the overall order. This is not from the report and, since it assumes equal importance of the factors, should not be taken too seriously.

A definite highlight for the US is “Open government” (score of 3 in the above table). This accords with my experience. The Freedom of Information Act, for example, really does mean that many serious abuses do eventually come to light.

Among problem areas for the US, the report has this to say:

The greatest weakness in Western Europe and North America appears to be related to the accessibility of the civil justice system. In the area of access to legal counsel, for instance, the United States ranks 20th, while Sweden ranks 17th. These are areas that require attention from both policy makers and civil society to ensure that all people, including marginalized groups, are able to benefit from the civil justice system.

I am also troubled by recent trends in “Limited government powers”, where the US received a 7th place, out of seven, among its regional cohorts, and a 9th place, among 35, globally. It seems to me that the biggest problem in this area is not the government bureaucrats who arrogate excessive power to themselves, as dangerous as such people are, but rather the number of ordinary citizens who do not even realize that the rule of law is an important issue. To have Guantanamo, secret extraditions, and the president ordering the execution of a citizen without trial all require widespread complacency on the issue. The biggest problem is the number of people willing to accept reasoning along the lines of, “He's a bad guy, it doesn't matter what the law is, get him”.

This is one of the key large trends for investors to watch over the next 10-20 years. Will America come back towards, or stray farther from, the rule of law?