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Many nations, principally in Eastern Europe and Latin America, have in the last two decades undergone democratization and market reforms. The difficulties these nations face in implementing the rule of law, however, have undermined these reforms. The rule of law, therefore, has moved to the center of an intellectual debate concerning how best to engineer the transformations needed for political and economic development to occur. As Thomas Carothers notes, the “concept [of the rule of law] is suddenly everywhere—a venerable part of Western political philosophy enjoying a new run as a rising imperative of the era of globalization” (1998: 951).

Oddly, it has not been lawyers but principally social scientists who have made the rule of law an important topic in development studies. The economist Hernando de Soto, for example, argues persuasively that without a functioning legal system, markets and consequently economic development are impossible. Political scientists Fareed Zakaria and Guillermo O'Donnell argue that democracy in the developing world is unlikely to endure without effective rules that cabin political behavior.

Contours of the Rule of Law

The advent of democracies lacking the rule of law not only remade the political map of the world but also transformed research agendas as scholars concerned with developing countries sought to define the rule of law and argued over how best to implement it. Perhaps not surprisingly given the importance and the antiquity of the topic, there is little agreement as to the precise contours of the rule of law. Nevertheless, the concept has a historical core that plays an important role in the Western legal tradition. The rule of law means that government can act only through legal rules and that law checks the power of government. Translated into modern terms, the two key components of the rule of law are due process of law and constitutional judicial review.

Due process provides a procedural check on government and is the oldest component of the rule of law. The ideal of due process is that government cannot act against individuals without affording a hearing before a neutral magistrate who applies rules that in principle dispose of other, similar disputes. Due process contributes to the legitimacy and longevity of government for two reasons. First, all societies are honeycombed with disputes and require, therefore, legitimate mechanisms to resolve disagreements. It is no accident that almost every society throughout history has used a third person to settle disputes. Whether we are talking about a village elder or the judge of the modern state, the “basic political legitimacy of courts” stems from this “overwhelming appeal to common sense” (Shapiro 1981: 1). Second, courts facilitate the social trust and consent that governments need to function well. Courts resolve disputes in a very different manner than do other political actors. The legitimacy of elected officials flows ultimately from the ballot box while the legitimacy of judges rests on the reasons that they provide for their actions. Elected officials are accountable to the electorate; judges are answerable for the explanations they give for their decisions.

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