THE ROLE OF RULE OF LAW IN DEVELOPMENT

Judge Jose P. Ventajar (Ret.)

Atty. George V. Carmona

Professor

LAW AND ECONOMIC DEVELOPMENT

Masters of Law

UNC-SAN BEDA, LLM

April 2022
 TABLE OF CONTENTS

Introduction 3
Statement of the Problem 4
Significance of the Study 4
Objectives of the Study 4
Scope and Limitation 5
Review of Related Literature
Rule of Law 5
Elements of the Rule of Law 9
Rule of Law as a Democratic Idea 11
Benefits of the Rule of Law 12
Law and Development 17
Law and Development in the Philippines 21
Findings and Conclusion 23

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 2 of 23
INTRODUCTION

The Rule of law is a concept that particularly aims to define the supreme
authority of the law over governmental acts and individual pursuits. It is an oft-
repeated idea in political conversations that the government and the individual are
subject to the law in all aspects of it. It is likewise invoked as an essential ingredient
in economic development. The rule of law cannot be fully effective in developing
countries like the Philippines without stressing the matter of economic development.

According to Graham and Stroup (2016)1, rule of law is notably relevant as an

influence on the economic development in developing and transitional countries. To
date, the term "rule of law" has been used primarily in the English-speaking countries,
and it is not yet fully clarified even with regard to such well-established democracies
as, for instance, Sweden, Denmark, France, Germany, or Japan. A common language
between lawyers of common law and civil law countries as well as between legal
communities of developed and developing countries is critically important for
research of links between the rule of law and the real economy.

The concept of rule of law is being widely used. Although it is, as a rule,
accepted that the extent to which a government abides by the rule of law is suggestive
of the degree of legitimacy of its actions, the conflicting use of the term illustrates that
the concept is far from having achieved a universally accepted meaning.

1
Graham, Brad; Stroup, Caleb (2016). “Does Anti-bribery enforcement deter foreign investment?” (PDF). Applied
Economics Letters. 23:63-677

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 3 of 23
STATEMENT OF THE PROBLEM

The paper will attempt to answer the following research questions:

a. What is the rule of law?

b. If there is a universal understanding of that concept, what are its
defining elements or characteristics and benefits?
c. Is the rule of law an indispensable ingredient to national
economic development?
d. Does the rule of law in the Philippines encourage opportunities
for economic activity?

Significance of the study

The findings of this research work will contribute to a better understanding of

the functional relationship between the rule of law and economic development. It
could identify gaps for further research or identify prescriptions for additional
initiatives in the revision of the constitution or the creation of laws and regulations
that are geared towards the creation of a common idea of the rule of law.

Objectives of the study

The study aims to contribute to the current research on the rule of law in the
Philippines by exploring possible initiatives for improvements that will similarly
impact trade, investment, and development.

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 4 of 23
Scope and Limitation

The research is limited to the Philippine context although it will rely on

American and European authorities or materials in the defining law and development
and the concept and elements of the rule of law.

REVIEW OF RELATED LITERATURE

Rule Of Law

The Black’s law dictionary defines rule of law as “a legal principle, of general
application, sanctioned by the recognition of authorities, and usually expressed in the
form of a maxim or logical proposition. It is known a “rule,” because in dubious or
unforeseen cases, it could serve as a guide in forming a rational decision. The rule of
law, sometimes called “the supremacy of law”, provides that decisions should be
made by the application of known principles or laws without the intervention of
discretion in their application.”2

Rule of law has also been considered as one of the major attributes that
determine the quality and good governance of one country. It posits that no one is
above the law, including the government. It suggests a set of common standards for
action, which are defined by law and enforced in practice through procedures to

2
Black, H. Black’s Law Dictionary, 6th ed., St. Paul, Minn: West Publishing Co., 1990, p. 1332

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 5 of 23
determine its trustworthiness, consistency, and effectiveness. These laws protect
fundamental rights, and justice and can be accessed by any person.

Roberts (2015)3 also aimed to define the concept of rule of law. In his journal,
he defined rule of law as a “characteristic of political communities within which in the
words of Justice Sandra Day O’Connor, “all persons shall be secure from the arbitrary
exercise of the powers of government.” The rule of law in a wider sense has become
of greater power outside the legal world. As the Carnegie Endowment for Peace’s
Rachel Kleinfeld Belton stated, it is like a product sold on late-night television, the rule
of law is touted as able to accomplish everything from improving human rights to
enabling economic growth to helping to win the war on terror. Rule of law is deemed
a necessary feature of democracy and free markets.”

Allot4 in his paper, defined the rule of law as an idea, an ideal, and a legal
principle. It is an idea of the rule of law that all public power is subject to the law.

It is an ideal when the rule of law is realized as a high ambition of

constitutionalism. And lastly, it is a legal principle when the rule of law is the
embodiment of the idea and actualization of the ideal in the legal self-constituting of
a society.

3
Roberts, Keith (2015). “Contemporary Legal System Challenges to the Rule of Law” (PDF). Judges’ Journal. Vol.
54 No.1, p. 14
4
Allot, Philip. The Rule of Law. (PDF). (n.p) Downloaded from Elgar Online at 06/11/2020 04:08:17PM via Lund
University

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 6 of 23
 Moreover, he also stated that the rule of law is an absurd but necessary fiction.
It is like the general will or the will of God. Considered as a fiction, the idea of the rule
of law is a nothingness in an empirical reality, merely evoking an unrestrained
collection of different ideas. It is absurd “because it is the ideas that they implicitly
negate that picture empirical reality – the rule of self-interest, of power, of force, of
the arbitrary, of the irrational, of ideology, of a class, of a tyrant, of nature, of fate, of
chance.” And it is likewise necessary – the rule of law are powerful means of
transforming empirical reality, including the possibility of making better human
societies.

According to Tamanaha (2004)5:

“notwithstanding its quick and remarkable ascendance as a

global ideal, the rule of law is an exceedingly elusive notion. Few
government leaders who express support for the rule of law,
journalists who record or use the phrase, dissidents who expose
themselves to the risk of reprisal in its name, and few of the multitude
of citizens throughout the world who believe in it, ever articulate
exactly what it means. Some believe that the rule of law is purely
formal in nature, requiring only that laws be set out in advance in
general, in clear terms, and be applied equally to all. Others assert
that the rule of law encompasses the “social, economic, educational,
and cultural conditions under which man’s legitimate aspirations
and dignity may be realized.” Dissidents point out that authoritarian
governments that claim to abide by the rule of law routinely
understand this phrase in oppressive terms. As Chinese law
professor Li Shiguang put it: “Chinese leaders want rule by law not

5
Tamanaha, Brian Z. On the Rule of Law: History, Politics and Theory (2004)

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 7 of 23
 rule of law’ … The difference … is that under the rule of law, the law
is pre-eminent and can serve as a check against the abuse of power.
Under the rule by law, the law can serve as a mere tool for a
government that suppresses in a legalistic fashion.” In view of this
rampant divergence of understandings, the rule of law is analogous
to the notion of the “good”, in the sense that everyone is for it, but
have contrasting convictions about what it is.”

In his legal studies research paper (2007)6, he also narrowly defined what the
concept of rule of law is. According to him, the rule of law requires that government
officials and citizens should be bound by and must act consistently with the law. This
is the basic requirement that involves a set of minimal characteristics, to wit: that the
law must be outlined in advance (be prospective), be made public, be general, be
clear, be stable and certain, and be applied to every one according to its terms. In the
absence of these characteristics, the rule of law cannot be satisfied. This is how the
“formal” or “thin” definition of the rule of law is described and characterized. It
represents a common standard of reference that all of the competing definitions of
the rule of law share.

Valcke (2012)7 also mentioned the narrow definition of the rule of law. Coined
under the formalistic theories – termed by some as the “thin rule of law” or “rule by
law” –he stated that “the government must operate within the confines of the law.
Contemporary formalistic theories tend to share the liberal view of the rule of law as

6
Tamanaha, Brian Z., A Concise Guide to the Rule of Law. FLORENCE WORKSHOP ON THE RULE OF LAW,
Neil Walker, Gianluigi Palombella, eds., Hart Publishing Company, 2007, St. John's Legal Studies Research Paper
No. 07-0082, Available at SSRN: https://ssrn.com/abstract=1012051
7
Valcke, Anthony. The Rule of Law: Its Origins and Meanings (A Short Guide for Practitioners) (March, 1 2012),
available at SSRN, http://ssrn.com/abstract=2042336

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 8 of 23
being equivalent to formal legality. From this perspective, the rule of law is therefore
not concerned with the content of the laws, but rather the optimal functioning of the
legal system with a view to providing individuals with a certain degree of
predictability as regards the legal consequences of their actions. Formal theories of
the rule of law tend to be the most widely accepted and are embraced by international
development agencies because they are capable of universal appeal regardless of
whether certain countries recognize fundamental rights or democratic values.”

Elements of the Rule of Law

Tamanaha’s research8 further identified the basic elements in establishing the

rule of law and the problems in connection with each. First, “Widely Shared
Orientation Within Society—Among Citizens and Government Officials—That the
Law Does Rule and Should Rule.”9; second, “Presence of an Institutionalized,

8
Tamanaha. A Concise Guide to the Rule of Law, p. 13-16
9
Tamanaha, A Concise Guide to the Rule of Law , supra. p. 13.
For the rule of law to exist, people must believe in and be committed to the rule of law. They must take it for
granted as a necessary, proper, and existing part of their political-legal system. This attitude is not itself a legal rule.
It is a shared political ideal that amounts to a cultural belief. When this cultural belief is pervasive, the rule of law
can be resilient, spanning generations, surviving episodes in which the rule of law is flouted by government officials.
When this cultural belief is not pervasive, however, the rule of law will be weak or non-existent.
Cultural beliefs are not subject to human control, so it is no easy matter to inculcate belief in the rule of law when it
does not already exist. A specific problem is that in many societies the government is distrusted and state law is
feared or avoided. This tends to be the case in societies where the law has a long or recent history of enforcing
authoritarian rule, or where legal officials are perceived to be corrupt or inept, or where legal professionals are
widely distrusted, or where the content or application of the law is seen to be unfair or is identified with particular
interests or the elite. In situations where the legal rules and systems have been transplanted from elsewhere, as
indicated earlier, many people will not identify with (or even know) the law, making it much harder to develop a
cultural orientation that the law should rule, although this can change over time. Moreover, when society consists
of distinct cultural, religious, or ethnic groups, and the law—either its norms, or the people who monopolize legal
positions—is identified with one group but not others, people from the groups left out may well see the law as a
threat and are unlikely to embrace the notion that the law should rule.
This is an essential element of the rule of law, and it is the hardest to achieve. Above all else, for this cultural belief
to be viable, people must identify with the law and perceive it as worthy of ruling. General trust in law must be
earned, and it takes time to become what is tantamount to a cultural view about law passed on through
socialization.

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 9 of 23
Independent Judiciary”10, and third, “Existence of a Robust Legal Profession and Legal
Tradition Committed to Upholding the Rule of Law.”11

These three elements are not easy to prove and establish when it is lacking, but
the situation may be more complicated considering that each element would likely
depend upon the others. They are distinct and yet intertwined and each relies upon
several supportive economic, political, and cultural circumstances. These are social,
cultural, and institutional plinth or foundation of the rule of law. All of this makes it
more difficult and tough to put the elements of the rule of law in place, and close to
impossible to do so quickly. It will take a long period of time to build up a general
cultural belief that the law does and should rule, to build an independent judiciary,

10
Tamanaha, A Concise Guide to the Rule of Law, supra. p. 14.
An institutionalized, independent judiciary is crucial to both functions of the rule of law: it is an important means to
hold government officials to the law (vertical), and to resolve disputes between citizens according to the law
(horizontal). Judges individually and as a group must be committed to interpreting and applying the law to
everyone (including government officials) according to its terms, fairly and without bias or outside influence.
An independent judiciary is difficult to establish and preserve. At a minimum, it requires the allocation of adequate
material resources: functional buildings, competent staff, access to legal resources, reasonable salaries, and job
security. Because judiciaries typically lack direct authority over police or other enforcement agencies, an essential
condition of the independence of the judiciary is that other government officials respect the independence of the
judiciary and comply with court rulings. Returning to the first element above, for an independent judiciary to exist
there must a strong cultural ethic that courts should not be interfered with, and that their legal decisions must be
obliged. An independent judiciary also depends upon the existence of a legal profession committed to upholding
the law. Judges are recruited from the profession and must be indoctrinated in the values of the rule of law; the
profession must also actively support an independent judiciary, and be willing to defend it when threatened.
11
Tamanaha, A Concise Guide to the Rule of Law , supra. p.15.
A well developed legal profession and legal tradition committed to upholding the law is necessary for several
reasons: to develop the body of legal rules in a coherent and accessible fashion that helps achieve predictability and
certainty in the law; to provide the legal services required to insure compliance with the law (in vertical and
horizontal terms); to help fill the ranks of government legal positions (including regulators, prosecutors, and judges)
with the orientation that the law must rule; and to rise to the defense of the rule of law when it is under pressure.
Without a body of lawyers committed to the law and to the rule of law, there can be no rule of law, for the
knowledge, activities, and orientations of lawyers as a group are the social carriers of the law—they are the group
whose collective activities directly constitute the law. Building a robust legal profession and legal tradition requires
a legal education system that transfers legal knowledge and inculcates legal values in those it trains, and it must
attract and reproduce people who are committed to the law and to developing legal knowledge.
A potential problem for this element exists in societies where only people from wealthy classes or selected groups
have access to legal education or to positions of authority in the legal system because this raises the risk that they
will develop and utilize the law to advance the interests of their own at the expense of others, producing a bent and
bias in the law. Citizens will perceive the law as tilted, which weighs against the first element above, making it
harder to develop a general cultural belief that the law should rule.

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 10 of 23
and to build a legal profession and tradition committed to upholding the rule of law.
The good news is that, when it comes about, this connexon makes the rule of law
resilient.12

Rule of Law as a Democratic Idea

The rule of law is a democratic idea. The late US Supreme Court Justice Antonin
Scalia in 2011 has stated that every ‘banana republic’ has a bill of rights. He further
went on to elaborate that without separation of powers, this bill of rights is only a
document worth nothing – just words on paper. Only when there is a sound
government structure, including an independent judiciary branch, do those words on
paper adopt practical meaning and the rights set forth in this bill of rights become
enforceable.

‘Democratic state under the rule of law’ according to a research study13 is

defined as a state whereby citizens elect their own leaders. It is a state where the
government itself is bound by the law and it helps ensure that the law is respected in
relation by the citizens. The law guarantees every individual freedom against
breaches by the government as well as the citizens. This can only be possible through
the separation of powers of the legislature, the executive, and the judiciary. And that
one of the vital elements is the independent court system that is readily accessible to
every citizen.

Tamanaha, A Concise Guide to the Rule of Law, supra. p. 16

12

Corstens, Geert. "A Democratic State Governed by the Rule of Law: What Does This Mean?." Understanding the
13

Rule of Law. Oxford: Hart Publishing, 2017. p.2. Bloomsbury Collections. Web. 29 Jan. 2020.

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 11 of 23
 The concept of the rule of law is considered as vulnerable. The creation of
democracy under the concept – where the law is more than just feeble words on
paper, as where government action is indisputably bound by the rules of law and
where the citizens have actual access to the courts – demands time, steady
commitment, and reliability. These are asked for not only in the judiciary but also
from the other two branches of the government, the legislative and executive. These
three must continuously articulate the message of the rule of law since the
sustainability and the quality of the rule of law eventually depend on the people.
Knowledge of the importance of the rule of land and commitment to its cause must
be passed on from generation to generation for it to survive.14

Benefits of the Rule of Law

The rule of law also has primary benefits, but each benefit has a connected
problem with it.15

One of the benefits of the rule of law is that it enhances the certainty,
predictability, and security in two areas: between the citizen and the government
(vertical) and among the citizens (horizontal).

Tamanaha (2007) said that the citizens benefit from the government by being
apprised in advance of the government’s response to their actions. This is an
important aspect of liberty as the citizens knowing the full range of conduct, can act
and engage in different activities without worrying about being subjected to

14
Corstens, Geert. "A Democratic State Governed by the Rule of Law: What Does This Mean?." Understanding the
Rule of Law. Supra note. p.4
15
Tamanaha, A Concise Guide to the Rule of Law, supra. p. 7

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 12 of 23
government sactions. Any act can be made by a citizen without fear and apprehension
as long as it is not prohibited by law. With this assurance, once always act at one’s
own peril.

As such predictability is critical to liberty, it is vital to realize that this benefit

in itself is not a guarantee to citizens of any particular area of free action. The extent
of action allowed can be quite limited or oppressive yet comply with the rule of law
in its “thin” sense.

As to fellow citizens, people are able to interact with one another with the
advanced knowledge of the rules that shall be applied to their act or conduct should
trouble or dispute occur. This predictability broadens their capacity to make choices
and interact with one another. They may include acting with the legally established
degree of care and responsibility in dealing with other persons or their property.

When evaluating these benefits, it is important to note that both assume

substantial knowledge and foresight about the law on the part of citizens. But the
cruel reality is that these citizens are not well-informed about the law, nor do they
think about the consequences of their actions before doing it.

The second benefit of the rule of law is that it restricts the discretion of
government officials, reducing willfulness and arbitrariness. Tamanaha (2007)
explains that citizens’ common concern is that the government officials’ possible
improper influence by inappropriate considerations – by prejudice, whim,
arbitrariness, passion ill will or a foul disposition or by any other means that affect
human decision making and conduct. The rule of law comes in by constraining these
factors by insisting that the government officials act pursuant to and consistent with

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 13 of 23
the legal rules. He further explained that the law operates in two ways to maximize
this benefit – first, government officials are required to consult the law before and
during the action taken, and second, legal rules provide publicly available
requirements and standards that can be utilized to make the government official be
held accountable during and after their actions.

The negative impact that comes with this second benefit is that it may be useful
or necessary that the government officers exercise discretion or make situation-
specific judgments. The application of existing rules to unexpected or changed
circumstances can have injurious or unfair consequences or lead to socially
undesirable effects. In such contexts, allowing the decision-maker to use his or her
expertise, wisdom, or judgment may produce better results than insisting that he or
she comply with the legal rules.16

The third benefit of the rule of law is that a peaceful social order is maintained
through legal rules. A peaceful social order is attained by the absence of routine
violence and a veritable degree of physical security and trustworthy expectations
about surrounding actions. These are considered to be the minimal conditions
needed for a livable social life.

The social order and legal rules relationship is extremely intricate and variable.
Social norms largely mold and govern our daily existence while legal norms may be
mostly irrelevant to most of the routine social conduct. Legal rules and prevailing

16
Tamanaha, A Concise Guide to the Rule of Law, supra. p. 9

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 14 of 23
social norms may can conflict or clash and it is for these reasons that it must not be
assumed that the law is the main source of social order.17

The fourth and one of the most important benefits of rule of law is that
economic development is facilitated by certainty, predictability and security. As
previously indicated, the rule of law enhances certainty, predictability, and security.
Besides enhancing liberty, it is widely believed that market-based economic systems
benefit from these qualities in two different respects, first is related to contracts and
second, to property.

As Tamanaha (2007) explained these reasons, he said:

“First, economic actors can better predict in advance the anticipated

costs and benefits of prospective transactions, which enables them to make
more efficient decisions. One can enter into a contract with some
assurances of the consequences that will follow if the other party fails to
live up to the terms of the contract. This encourages the creation of
contracts with strangers or parties at a distance, which expands the range
and frequency of commercial interactions, increasing the economic pie.
Second, the protection of property (and persons) conferred by legal rules
offers an assurance that the fruits of one’s labor will be protected from
expropriation by others. This security frees individuals to allocate the bulk
of their efforts to additional productive activity, and to enjoying its benefits,
rather than expending time and effort on protecting existing gains.”18

Additionally, the economic benefits conferred by the rule of law have been
identified to be related to capitalism on local and global scales. To determine whether

17
Tamanaha, A Concise Guide to the Rule of Law, supra. p. 10
18
Tamanaha, A Concise Guide to the Rule of Law, supra. p. 11

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 15 of 23
and to what extent the extent of claims, one must first examine both the law and the
relationship between the law and the system of economic exchange in a given
situation. Commercial transactions and economic development might be inhibited by
the legal system when the law and legal institutions are ambiguous, inefficient,
expensive, and unreliable, and the economic players may prefer to resort to other
institutions in situations of discussions and disputes such as private arbitration, thus
avoiding the legal system completely. Moreover, other mechanisms such as rules on
mutual benefit or long-term social or economic relationships can effectively provide
predictability and security in transactions, rendering the law inferior or superfluous.

The fifth and last benefit of the rule of law is fundamental justice of the
requirement that the rules must be applied equally to everyone according to their
terms.

An aspect of the rule of law is the equality of application of the law. It is a

component of fundamental justice. When the identity or status of a person impacts
how legal officials apply or interpret the law, it is commonly considered unjust and
unfair. No person shall be unduly treated by a legal official. This condition does not
prohibit laws from defining distinctions among people or groups, like how the law
would treat men and women differently. It merely requires that the law should be
applied in accordance with its terms no matter to who it is being applied to.

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 16 of 23
Law and Development

In the18th century, an idea was born that a nation’s legal system greatly affects
the economic and social prospects of said nation. And as early as the 19th century the
discussion about law reform often tackles the economic impact of specific measures.
But it was only in the 20th century that attempts were to establish an academic
discipline to study the relationship between law and development and governments
and international institutions concerned with development began to organize
systematic legal reform projects.19

A thorough examination of law and development through the eyes of political

and legal theory can generate a new understanding as to the purpose and process the
legal reform should take. One of these relevant insights is the concept of
interdependence of democracy and the rule of law. There is a need to democratize
governance and rule-of-law promotion activities since observers recognize that the
much legal and judicial reform implemented as of present has lacked involvement of
the public beyond the legal sphere. The rule-of-law and good governance promotion,
owing to the highly technical and specialized nature of the field, have generally been
protected from the prevailing move toward participatory development.20

Many underlying assumptions are now being taken for granted as the law and
development concept has become more known. Strengthening the rule of law is now
being considered a development priority as it is continuously gaining widespread

19
Trubek, David M., Law and Development in the Twenty-First Century (October 26, 2011). LAW AND
DEVELOPMENT IN ASIA, McAlinn, Pejovic, eds., Routledge, 2011, Univ. of Wisconsin Legal Studies Research
Paper No. 1178, p. 1. Available at SSRN: https://ssrn.com/abstract=1949740
20
McInerney, Thomas, F. Law and Development as Democratic Practice (2005). Vanderbilt Journal of Transnational
Law, Vol. 37m p. 935, 2005, available at SSRN: https://ssrn.com/abstract=531382

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 17 of 23
recognition even among the general public. What the traditional accounts fail to
include, however, is the discussion of this effort's complexity. The rule of law is
constantly perceived as something tangible and definable. Thus, putting it into use
and practice is only a matter of looking at the right technocratic package and applying
sufficient political muscle.

Four inter-related problems must be addressed for this field to be realistically

plausible. Broadly conceived, these challenges and problems arise from an extensive
misunderstanding of the dynamics and pace of social and political change. Law and
development interventions are usually grounded on flawed premises without this
understanding. The persistence of these underlying assumptions promotes the view
that technocratic, rather than democratic methods can create democracy and the rule
of law is adopted.

The first problem deals with the frequent implementation of hierarchical and
orthodox stances. These methodologies challenge the cognitive abilities of those
involved and fail to give credit to the diversity of institutional arrangements capable
of supporting the rule of law. The second one concerns the political nature and
numerous legal-reform initiatives, specifically those concerning the distribution and
dispersal of the resources in society. The third issue entails the unsophisticated
concept of human agency and its involvement in the law and development work. It is
argued that the cognitive grounding of current political, social and legal arrangements
is being discounted by a suitably rich conception of agency. The final consideration
proposes a partial explanation to the troubling question as to why many law and
governance reforms are considered ineffective. The lack of incentives for law reform
presented to most developing countries is being exposed upon examination of the
high-powered incentives for law reform presented by international integration.

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 18 of 23
 These issues show the necessity for collective and democratic solutions to the
rule-of-law promotion, because, in the world of constant, increasing complexity, the
traditional approaches to governance are no longer working.21

Observers of law and development concur that efforts at legal transplantation

and orthodoxy fail. Based on experience in legal reform, it shows that unilateral
solutions usually fail for numerous reasons, one being cognitive limitation. These
solutions may have worked for the time being but as a long-term governance
approach, a consolidated and central direction of the political and economic system
is a losing scheme. It is flawed to contend that a person or group of persons can
navigate through the social, economic, or political order.22 Orthodoxy fails for similar
reasons. If cognitive limitations make it difficult for an external party to determine
previous solutions, then by definition determined in advance, the orthodox solution
could not generally be expected to work. The significance of strong institutions to
economic growth produces a great invitation to install institutions patterned on those
of more economically successful countries, notwithstanding the truth that the social,
political, and economic capital necessary to sustain those institutions are inexistent.23

Another difficulty in the conventional approach to law and development is the

lack of attention to the distributive questions, which are mainly about politics.
Considering that most of the participants in legal reformation are lawyers, there is a
tendency to lean more exclusively on legal questions, among others. These

21
McInerney. Law and Development as Democratic Practice. Supra. p.5
22
Oliver Gerstenberg & Charles Sabel, Directly Deliberative Polyarchy: An Institutional Ideal for Europe, in GOOD
GOVERNANCE IN EUROPE’S INTEGRATED MARKET 289, 292
23
McInerney. Law and Development as Democratic Practice. Supra note. p.8

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 19 of 23
distributive questions can be found anywhere, like something as innocuous as
commercial law can greatly affect the present trade and industry activities into the
official economy which can hurt the business endeavors of some entities previously
dealing in the unofficial economy. An example of this is changing an investment code
that may increase or decrease the powers of unions and employees. A related point
also deals with systematic changes. Improvements in the quality of services in one
aspect can cause a myriad of effects and changes or can impede the provision of
services in another area. Some economists fail to deal with the incentive problems of
those negatively affected by the distributional consequences of legal reform, but also
rattle against the rent-seeking behavior of individuals who benefit from an existing
order.24

McInerney (2005) further stated that no matter how well-intentioned a

development policy might be, without the support of at least a median segment of the
population, market reforms for an intended purpose cannot be achieved. Given the
dramatic gap in wealth visibly existing in many developing countries like the
Philippines, achieving political support will entail legal reforms that involve
distributive consequences acceptable to a critical mass of the population.

As to state-level incentives, the limited progress of legal reform in many

evolving and developing countries differs sharply from the recent happenings of
some states going forward in economic integration. The power of incentives in
encouraging states to carry out comprehensive legal reforms explains significant
potential in this aspect. Some of the most remarkable instances of widespread legal
reform in the past fifteen years can be credited to the power of international

24
McInerney. Law and Development as Democratic Practice. Supra note. p.9

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 20 of 23
integration, notably in connection with the European Union (EU) and World Trade
Organization (WTO) agreement. Countries like the Czech Republic, Hungary, Poland,
and other EU accession states are driven to undertake significant reforms because of
the high-power, state-level incentives that opportunities for economic integration.
Surely, a lot of work is still needed in many of these countries. Oftentimes, we know
of these reforms as just a process of agreeing to the guidelines of the organizations,
but what this interpretation did not take into account is the convergence or
unification of political forces within the country necessary to enable these reforms to
gain strength. 25

Law and Development in the Philippines

On October 2, 2015, then Foreign Affairs Secretary Albert F. Del Rosario

addressed the 70th Session of the UN General Assembly in New York, USA. In his
speech, Del Rosario reaffirmed its “steadfast commitment to the rule of law and
sustainable development through key priority areas in the United Nations.” He
identified crucial priority matters of concerns, one of which is the rule of law.

On the 2030 Agenda for Sustainable Development, the secretary has outlined
five pillars which form part of the building blocks for the new framework. These
pillars include power reduction and social inclusion; environment sustainability
climate change and disaster risk management; accountable, responsive, and
participatory governance; fair and stable order based on the rule of law; and peace
and security. Secretary Del Rosario also pointed out that the Philippines will continue
to highlight the positive contributions of migrants to sustainable development in

25
McInerney. Law and Development as Democratic Practice. Supra note. p.14

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 21 of 23
countries of origin, transit and destination. The country will also support demands
for continuing the discussions on the much-needed and long-overdue reforms in the
Security Council to make the Council more democratic, more inclusive, more
transparent and more accountable.26

In 2015, the Philippine economy is moving forward in an extraordinary pace

in the country’s history. Inflation was stable and low interest rates are crucial.
Favorable macroeconomic conditions, combined with sustained foreign direct
investment inflows and overseas Filipino workers’ (OFW) remittances further drove
up investors’ confidence, outlook and optimism.

But as the Philippines got more progressive in its economic activity, one should
be reminded and contextualize everything around the self-executing provision of
Section 16, Article II of the 1987 Constitution which states:

“The State shall protect and advance the right of the people to a
balanced and healthful ecology in accord with the rhythm and harmony of
nature.”

The importance of this constitutional provision is for guidance of

investments to recognize reality and the responsibility of sustaining our
abundant resources to provide ecosystems services for future generation.
The Philippines is recognized as the center of global marine biodiversity
and housing high autochthony of flora and fauna as well as abundant

26
“PHL Champions Rule of Law and Sustainable Development in the UN”. October 2, 2015.
https://www.un.int/philippines/activities/phl-champions-rule-law-and-sustainable-development-
un?msclkid=a1386e5fc82311ec85b73ef790ada9dc (accessed April 12, 2022)

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 22 of 23
deposits of important minerals and other important catalysts of
development, like air and water.27

Findings and Conclusion

The rule of law is a code of conduct, an operating system for the

application of coercion in a given political society. It dictates on how
coercion and duress might happen and not on when, where, or why. Hardly
ever followed, the rule of law as a rejection of and protection against
arbitrariness nevertheless comes as close to a universally accepted value
system as the world knows.

Law and development remain at a crossroad. Problems of

knowledge, politics, social practice and incentives challenge the
effectiveness of hierarchical and centralized approached to law and
development.

Any program of law and development must have the creation and
maintenance of a legitimate legal order as both its starting point and
ultimate goal. Law and development interventions must posit
transformation to a legitimate order as a favored result, especially in
economic development.

27
Patajo-Kapunan, Lorna. “The law of sustainable development.” August 2, 2015.
https://businessmirror.com.ph/2015/08/02/the-law-of-sustainable-
development/?msclkid=a138f947c82311ec87addfc7d81bf918 (accessed April 13, 2022)

The Role of the Rule of Law in Development by Judge Jose P. Ventajar (Ret.) Page 23 of 23