Philosophy of Global Law: World Bank, Posner, and Economic Development

This essay delves into the philosophy of global law, focusing on the interconnectedness of the rule of law, human rights, and economic development. It examines the World Bank's perspective on governance, emphasizing its role in fostering economic progress through accountability, transparency, and a robust legal framework. The essay also contrasts the World Bank's approach with that of Richard Posner, particularly his emphasis on the legal framework for economic development and the protection of property rights. The analysis considers the significance of human rights within this context, highlighting the World Bank's focus on social and financial rights and its limitations due to its Articles of Agreement. The essay concludes by reaffirming the crucial link between the rule of law, human rights, and economic development, advocating for a comprehensive and justifiable approach to growth.

Running head: PHILOSOPHY OF GLOBAL LAW
Philosophy of Global Law
Name of the Student
Name of the University
Authors Note

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Topic 2
Introduction
Today law is situated at the midpoint of progress discourse and exercise. It cannot be
ignored that the legal system is vital for economic development and now creates part of the
orthodox perception in the theory of evolution. In this regard, the most collective expression is
the ‘rule of law’. The meaning of the rule of law is a lawful order inclusive of probable,
implementable and well-organized rules, which is indispensable for a market economy to
prosper. At the same time, it is also essential to keep in mind that human rights must not be
violated due to this economic development and the rule of law must comply with human rights.
This paper mainly focuses on elaborating the observations of World Bank concerning the rule of
law and human rights. This paper also compares the representations of the World Bank with the
approach of Richard Posner concerning economic development.
Discussion
According to the report of the World Bank regarding Governance and Development,
expression Governance means a way in which power is applied in the administration of a
country’s financial and social wealth to improve it. The World Bank found its interest in
governance because appropriate governance has great importance in the economic development
of a country. Good governance is exemplified by anticipated, open and free-thinking
policymaking1.
While analyzing governance, a perfect dissimilarity is drawn by the World Bank between
the various perceptions of political and financial dimensions. The Articles of Agreement
1 Krever, Tor. "The legal turn in late development theory: the rule of law and the World Bank's development
model." Harv. Int'l LJ 52 (2011): 287

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implemented by the World Bank forbid the organization from interrupting in the inside political
difficulties. Therefore, the Bank is concerned with the accountability, clearness and the rule of
law of the governance. It has great importance in the social and economic progress, and the
objective of the World Bank is to reduce sustainable poverty from all over the world.
The governance has four subheadings, namely, 1) public sector management, 2)
accountability, 3) legal framework for progress and 4) transparency and information and the
present report elaborate the development of governance after keeping in mind these four
dimensions. Among the four, the term public sector management is primarily technical. All of
these four dimensions immensely affect the performances of the public sector by giving a shape
to the environment where it subsists. In private sectors, the abilities of accountability and
transparency are advantageous because it helps to make the public sectors more responsive.
Legal systems deliver a framework of regulations both for the private and government sectors.
The organizational development in government, as well as private sectors, arises when these four
dimensions of governance strengthen one another2. Three different aspects of governance have
been identified by the World Bank, such as:
 The method of the political system;
 The process by which authority is applied in the supervision of financial and social
properties for the progress of a country;
 The capability of the government to plan, communicate and enforce policies and release
functions.
2 Fritz, Verena, Brian Levy, and Rachel Ort, eds. Problem-Driven Political Economy Analysis: The World Bank's
Experience. The World Bank, 2014.
https://openknowledge.worldbank.org/bitstream/handle/10986/16389/9781464801211.pdf

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The description of management given by the World Bank is linked with participatory
progress, human rights and democratization by the Development Assistance Committee (DAC)
of the Organization for Economic Cooperation and Development (OECD).
Maybe in a greater sense, human rights are inseparable. Still, as an international financial
institution, the World Bank deals only with those aspects of human rights, which are relatable to
its obligation. However, the World Bank also has taken into account the dimensions of the
political system of human rights for making money lending decisions only when the human
rights are violated or adverse financial conditions arises, and the UN Security Council gives
direction in this regard3. Usually it does not take into account the political aspects for making
financial decisions because the Articles of Agreement prevents the institution from doing so. As
the Article also prohibits the institution from interfering into political affairs of any country,
therefore, the Bank gives more efforts in the part of the human rights mainly on those rights
which are social and financial by nature. Therefore, it lends money to poor people, farmers to
help them in farming and give them a chance so that these people can also participate in the
economic growth of a country. World Bank encourages both rural development and urban
employment. Apart from that, it also concerned about the aboriginal people and in this regard
arranges resettlement and title over the land.
Example: New Natural Resources Management Project in Columbia.
For reducing poverty, the Bank provides essential social services to the poor and
aboriginal people, such as health care facilities, nutrition, primary education and family
planning4.
3 Lancaster, Carol. "Governance and development: the views from Washington." ids bulletin 24.1 (1993): 9-15.
https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/9402/IDSB_24_1_10.1111-j.1759-
5436.1993.mp24001003.x.pdf?sequence=1
4 Williams, David, and Tom Young. "Governance, the World Bank and liberal theory." Political Studies 42.1
(1994): 84-100. https://s3.amazonaws.com/academia.edu.documents/48173697/j.1467-

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Comparison between Richard Posner’s and World Bank’s View on Rule of law,
Human rights and Economic development
Richard Posner in his book, namely, “Creating a Legal Framework for Economic
Development” had written that the financial wealth of a modern country needs a prudent legal
structure the aim of which is to protect the property and contractual rights. The vital legal
improvement required to generate that structure may be the implementation of a scheme of
comparatively specific permissible rules which is different from open-ended principles or a
massive investment. Whereas, the World Bank was of the view that appropriate governance has
great importance in the economic development of a country. Good governance is exemplified by
anticipated, open and free-thinking policymaking5.
It used to be popular in the financial literature on progress to list the numerous sources
regarding the failure of market and recommend complicated interferences of government to
recover them without giving any response to the various sources of failure of the government,
particularly in underprivileged countries. Whereas, The Articles of Agreement implemented by
the World Bank forbid the organization from interrupting in the inside political difficulties.
A conference on legal improvement, along with other initiatives on current legal
improvement, testifies to the rising consciousness that the failing of governments in
underprivileged countries to deliver the basic outline of a commercial economy may be a
significant issue in keeping underprivileged countries underprivileged. On the other hand, the
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5 Ringer, Thom. "Development, Reform, and the Rule of Law: Some Prescriptions for a Common Understanding of
the Rule of Law and its Place in Development Theory and Practice." YALE Hum. RTs. & DEv. LJ 10 (2007): 178.
https://digitalcommons.law.yale.edu/cgi/viewcontent.cgi?article=1063&context=yhrdlj

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World Bank tries to reduce the failure of government by taking several initiatives because it has
negative impact in the financial development of the underprivileged country6.
According to some market specialists, markets are more vigorous than before, but their
robustness may be influenced by making an environment in which permissible rights,
predominantly property and contractual rights are implemented and secured — an environment
which is taken for granted by the wealthy nations. This legal system is taken for granted by the
people of prosperous countries because it works fine enough almost all the time and it is not very
costly. The system consists in its ideal form of qualified, ethical, and lucrative professional
judges administering laws that are designed well to assist business activity. The judges were
segregated by the lawmaking and policymaking branches of government from intervention.
Whereas, the World Bank appoints experienced, principled and well-salaried lawyers and they
solved the cases without everlasting adjournment.
It is a proven fact that prudent expenses to reform the law help to increase the rate of
economic progress. There are enormous proofs present, which shows that the rule of law plays
an active role in contributing to the wealth of a nation. Legal reform involves considerable
expenditure. In this regard, Richard Posner was of the view that the cost of creating efficient
legal institutions requires a massive fee, and it is also a time-consuming matter. It is easier to
enact effective regulations for inefficient worldwide organizations to control because the process
of adopting rules involves less expenditure7. On the other hand, the mission of World Bank is to
finish the negativity arises out of poverty and endorse wealth. According to the World Bank
fairness and rule of law are the key ingredients to attain these goals.
6 Skogly, Sigrun. Human Rights Obligations of the World Bank and the IMF. Routledge-Cavendish, 2012.
7 Criddle, Evan J., and Evan Fox-Decent. "Human rights, emergencies, and the rule of law." Hum. Rts. Q. 34 (2012):
39.
https://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=2572&context=facpubs

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However, in his entire book, Richard Posner did not shed any light into the dimension of
human rights. He talked only about the contractual rights and preservation of property. He was of
the view that the concepts of criminal laws or human rights are frequently reciprocals. Some of
the fundamental human rights protect the individuals of a country against the over spirited
execution of criminal acts. On the other hand, the World Bank as an international financial
institution deals only with those aspects of human rights, which are relatable to its obligation8.
Conclusion
Therefore, from the above discussion, it can be concluded that ‘the rule of law’, human
rights and economic development is closely related to one another. While, ‘rule by law’ provides
a legal framework, contractual inevitability and conflicts settlement mechanism which support
the financial progress and improvement, it is merely the rule of law, persistent with international
human rights, which can deliver for growth that is too comprehensive and justifiable. World
Bank considers the dimensions of human rights and the rule of law in economic development.
Still, famous Justice and economist did not find the aspects of human rights in the legal
framework of economic growth because these are frequently reciprocals.
8 Posner, R. A. "Creating a Legal Framework for Economic Development." Law: J. Higher Sch. Econ. (2014): 4.

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References
Criddle, Evan J., and Evan Fox-Decent. "Human rights, emergencies, and the rule of law." Hum.
Rts. Q. 34 (2012): 39.
Fritz, Verena, Brian Levy, and Rachel Ort, eds. Problem-Driven Political Economy Analysis:
The World Bank's Experience. The World Bank, 2014.
Krever, Tor. "The legal turn in late development theory: the rule of law and the World Bank's
development model." Harv. Int'l LJ 52 (2011): 287.
Lancaster, Carol. "Governance and development: the views from Washington." ids bulletin 24.1
(1993): 9-15.
Posner, R. A. "Creating a Legal Framework for Economic Development." Law: J. Higher Sch.
Econ. (2014): 4.
Ringer, Thom. "Development, Reform, and the Rule of Law: Some Prescriptions for a Common
Understanding of the Rule of Law and its Place in Development Theory and Practice." YALE
Hum. RTs. & DEv. LJ 10 (2007): 178.
Skogly, Sigrun. Human Rights Obligations of the World Bank and the IMF. Routledge-
Cavendish, 2012.
Williams, David, and Tom Young. "Governance, the World Bank and liberal theory." Political
Studies 42.1 (1994): 84-100.