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Johnson, Andrea L. --- "The Rule of Law, Privatization, and the Promise of Transborder Licensing" [2012] ELECD 551; in Carpenter, M. Megan (ed), "Entrepreneurship and Innovation in Evolving Economies" (Edward Elgar Publishing, 2012)

Book Title: Entrepreneurship and Innovation in Evolving Economies

Editor(s): Carpenter, M. Megan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9780857934697

Section: Chapter 10

Section Title: The Rule of Law, Privatization, and the Promise of Transborder Licensing

Author(s): Johnson, Andrea L.

Number of pages: 26

Extract:

Law, privatization, and the promise of transborder licensing




10. The rule of law, privatization, and
the promise of transborder licensing
Andrea L. Johnson*

Rules don't ensure sustainable economic development; people do.


I. INTRODUCTION

The rule of law in the international context is defined using different
terminology, but has the same basic components: a set of rules by which
persons have equal access to a legal system that is transparent, has an
independent decision-making body, and where the rules are applied in a
nondiscriminatory fashion.1 Historically, a government's failure to adhere
to the rule of law leads to a lack of trust and predictability necessary to
attract foreign investment. In the 1990s, privatization of state-owned assets
and enterprises in developing countries became a plausible way to stabilize
financial markets, spur foreign investment, retire debt, and improve local
economies.2 The theory was that foreign investment in sectors such as tele-
communications stimulated economic development in new and existing



* The author would like to acknowledge Tara Pelan, Esq. for her valuable con-
tributions to this chapter.
1 See Simon Chesterman, An International Rule of Law?, 56 Am. J. Comp. L.

331 (2008) (hereinafter "Chesterman"). The World Justice Project (WJP) identi-
fies four universal principals for the rule of law: 1) government and its officials are
accountable under the law; 2) the laws are clear, publicized, stable and fair, and
protect fundamental rights, including the security of persons and property; 3)
process by which the laws are enacted, ...