11.490: LAW AND DEVELOPMENT SPRING 2013 Tuesdays: 11 am 1 pm, Room 9-450B

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1 11.490: LAW AND DEVELOPMENT SPRING 2013 Tuesdays: 11 am 1 pm, Room 9-450B Professor Balakrishnan Rajagopal Phone: ; braj@mit.edu Office hours: Tuesdays 4-5:30 pm or by appt. DESCRIPTION This advanced seminar, limited to 12 students, examines the role of law in development through an examination of the interrelationship between economic and legal ideas, development policies and politics. Since the literature on law and development is vast, the course is heuristic rather than comprehensive, and seeks to develop a historical and grounded sense of the relationship between legal order and development, in its social, economic, and cultural dimensions with a view towards further investigation. Select topics examined include a historical evaluation of changes in dominant thinking about what role law plays in development, the emergence of rule of law in development policy, the question of sequencing and tradeoffs between different kinds of reforms, the role of property rights and the land tenure in development, contracts, ethnic networks, social norms and bargaining in the shadow of the law, political institutions and the role of legitimacy, institutions for transparency and accountability, regulation and the role of the judiciary in enforcing them through litigation, the relationship between the judiciary and the political order and the challenges of judicial reform, and aspects of international economic law that bears on development, especially the trade regime. Includes some country case studies but it is largely intended to be a framing seminar for advanced graduate students, doctoral and masters, who have current research interests in topics that intersect legal and regulatory issues or that involve the role of law. Requirement and Grade: Students will be asked to develop a research proposal during the seminar, and present it in class, which can serve as the basis of a paper, due at the end of term on May 19 th at 12 pm. This paper carries 80% of the grade. Active participation through discussions in class, which reflects engagement with the readings, carries the rest 20%. Prerequisites: A course in economic/international development such as or permission of instructor. No prerequisites in law are necessary. The readings for the seminar will be available through stellar with an MIT certificate. 1

2 Readings Class 1: Law and development before and after the Washington Consensus February 5 Introduction to the course and description David M. Trubek and Marc Galanter, Scholars in Self-Estrangement: Reflections on the Crisis in Law and Development Studies in the U.S.A Wisconsin Law Review Duncan Kennedy, Three Globalizations of Law and Legal Thought, in David Trubek & Alvaro Santos, The New Law And Economic Development: A Critical Appraisal (2006). Kerry Rittich, Second Generation Reforms and the Incorporation of the Social in David Trubek & Alvaro Santos, The New Law And Economic Development: A Critical Appraisal (2006) pp Brian Z. Tamanaha, The Lessons of Law and Development Studies 89 American Journal of International Law (1995). Hernando De Soto, The Other Path: The Economic Answer to Terrorism (1989), preface and chapter 5. David Kennedy, Turning to Market Democracy: A Tale of Two Architectures 32 Harvard International Law Journal 373 (1991). Class 2: Approaches to legal reform for development - February 12 World Bank, Legal Institutions and the Rule of Law in World Development Report: From Plan to Market, Chapter 5, pp (1996). World Bank, Introduction in World Development Report: Building Institutions for Markets (2002). Amartya Sen, What is the Role of Legal and Judicial Reform in the Development Process? in The World Bank Legal Review: Law, Equity and Development, volume 2 (Ana Palacio ed., 2006). Franz von Benda-Beckman, The Multiple Edges of Law: Dealing with Legal Pluralism in Development Practice in The World Bank Legal Review: Law, Equity and Development, volume 2 (Ana Palacio ed., 2006). Katherina Pistor, The Standardization of Law and Its Effects on Developing Economies 50 American Journal of Comparative Law (2002) Daniel Berkowitz, Katharina Pistor, and Jean-Francois Richard, Economic Development, Legality, and the Transplant Effect 47 European Economic Review (2003) 2

3 Brian Tamanaha, Understanding Legal Pluralism: Past To Present, Local To Global, St. John s Legal Studies Research Paper No: , Available At SSRN: Paul S. Berman, Global Legal Pluralism, 80 Southern California Law Review 1155 (2007). Teemu Ruskola, Law without Law, or is Chinese Law an Oxymoron?, 11 William & Mary Bill of Rights Journal 655 (2003). Matthew C. Stephenson, A Trojan Horse Behind Chinese Walls: Problems and Prospects of U.S.-Sponsored Rule of Law Projects in the People s Republic of China 18 UCLA Pacific Basin Law Journal (2000). NO CLASS ON FEBRUARY 19 MONDAY SCHEDULE OF CLASSES Class 3: Rule of law, tradeoffs and sequencing for reform - February 26 David Kennedy, The Rule of Law, Political Choices and Development Common Sense, David Trubek & Alvaro Santos, The New Law And Economic Development: A Critical Appraisal (2006) pp Balakrishnan Rajagopal, The Rule of Law in Post-Conflict Rebuilding: A Critical Examination, 49(4) William & Mary Law Review 1345 (2008). Barry R. Weingast, The Economic Role of Political Institutions: Market- Preserving Federalism and Economic Development 11 Journal of Law, Economics & Organization 1-31 (1995). Andras Sajo, How the Rule of Law Killed Hungarian Welfare Reform 5 East European Constitutional Review (1996). Thomas, Carothers, The rule of law revival, 77 Foreign Affairs pp (March/April 1998). John M. Ohnesorge, The Rule of Law, Economic Development and Developmental States of Northeast Asia in Law and Development in East and Southeast Asia (Christoph Antons, ed., 2003) pp Frank Upham, Mythmaking in the Rule of Law Orthodoxy, Carnegie Endowment Working Paper, Rule of Law Series, Democracy and the Rule of Law Project. Number 30, September Bruce M. Wilson and Roger Handberg, Costa Rica s New Constitutional Court: A Loose Political Cannon? 18 South Eastern Latin Americanist (2000). Donald C. Clarke, What s Law Got to Do With It?: Legal Institutions and Economic Reform in China 10 UCLA Pacific Basin Law Journal 1-76 (1991). 3

4 Class 4: Property rights and land tenure in law - March 5 Jennifer Nedelsky, Private Property and the Limits of American Constitutionalism: The Madisonian Framework and Its Legacy (1994), introduction and conclusion. Frank Michelman, Possession vs. distribution in the constitutional idea of property, 72 Iowa Law Review 1319 (No.5, July 1987), pp. 1-5; David Kennedy, Some Caution about Property Rights as a Recipe for Development (2011) Accounting, Economics, and Law: Vol. 1: Iss. 1, Article 3. Geoffrey Payne, Urban land tenure policy options: titles or rights? 25 Habitat International (2001). Hernando De Soto, The Mystery of Capital (2000), chapters 3 and 6. Harold Demsetz, Toward a Theory of Property Rights, 57 The American Economic Review: Papers and Proceedings 347 (1967), pp G. Feder and D. Feeny, Land tenure and Property rights: Theory and Implications for Development Policy, 5(1) World Bank Economic Review 135 (1991) Robert C. Ellickson, Property in Land, 102 Yale Law Journal 1315 (1993), pp ; Duncan Kennedy, Mainstream Law and Economics from the Point of View of Critical Legal Studies (1998), pp Carol Rose, Crystals and Mud in Property Law, 40 Stanford Law Review 577 (1988), pp.1-6; Bina Agarwal, A Field of One s Own: Gender and Land Rights in South Asia (1994), chapter 5. Class 5: State and non-state private ordering: contracts - March 12 Avinash K. Dixit, Lawlessness and Economics (2004), pp.1-14, 25-29, Jane Kaufman Winn, Relational Practices and the Marginalization of Law: Informal Financial Practices of Small Businesses in Taiwan, Law and Society Review (28(2) 193 (1994). Eric Posner, Law and Social Norms (2002), pp.1-48, Mnookin, Robert H. & L. Kornhauser. Bargaining in the Shadow of the Law: The Case of Divorce, 88 Yale Law Journal 950 (1979). E. Ostrom, Governing the Commons: The Evolution of Institutions for Collective Action, Cambridge University Press, 1990, pp and

5 Max Weber in Law and Anthropology: A Reader (Sally Falk Moore ed., 2005), pp Paul R. Milgrom, Douglass C. North, and Barry R. Weingast, The Role of Institutions in the Revival of Trade: The Law Merchant, Private Judges, and the Champagne Fairs 2 Economics & Politics 1-23 (1990) Avner Greif, Private Order Contract Enforcement Institutions: The Maghribi Traders Coalition in Institutions and the Path to the Modern Economy (2006), pp Marc Galanter, Justice in Many Rooms: Courts, Private Ordering, and Indigenous Law, 19 Journal of Legal Pluralism 1 (1981). Class 6: Political Institutions - March 19 World Bank, Political institutions and governance in World Development Report: Building Institutions for Markets (2002) available at _ /Rendered/PDF/multi0page.pdf Daron Acemoglu and James Robinson, Why Nations Fail: The Origins of Power, Prosperity and Poverty (2012), chapters 3 and 13. Joel S. Hellman, Geraint Jones, and Daniel Kaufmann, Seize the Day, Seize the State : State Capture, Corruption, and Influence in Transition World Bank Policy Research Paper No (2000). Balakrishnan Rajagopal, Corruption, legitimacy and human rights: The dialectic of the relationship, 14 Connecticut Journal of International Law 495 (1999). UN Convention Against Corruption, 2003 available at Andrei Shleifer and Robert W. Vishny, Corruption 109 Quarterly Journal of Economics (1993) Cheryl Gray and Daniel Kaufmann, Corruption and Development, Finance and Development, March 1998, p.7. available at NO CLASS ON MARCH 26 SPRING BREAK Class 7: Regulation and the role of the judiciary April 2 Abram Chayes, The Role of the Judge in Public Law Litigation, Harvard Law Review, Vol. 89, No. 7 (May, 1976), pp Duncan Kennedy, A Critique of Adjudication: fin de siècle (1997), chapters 2 and 6. 5

6 Edward Glaeser, Simon Johnson, and Andrei Shleifer, Coase versus the Coasians 106 Quarterly Journal of Economics (2002). Gretchen Helmke, The Logic of Strategic Defection: Court-Executive Relations in Argentina Under Dictatorship and Democracy 96 American Political Science Review (2002). Frederick Schauer, Incentives, Reputation, and the Inglorious Determinants of Judicial Behavior 68 University of Cincinnati Law Review (2000). John A. Ferejohn and Barry R. Weingast, A Positive Theory of Statutory Interpretation 12 International Review of Law & Economics (1992). Robert D. Cooter and Tom Ginsburg, Comparative Judicial Discretion: An Empirical Test of Economic Models 16 International Review of Law & Economics (1996). Steven Shavell, The Fundamental Divergence Between the Private and the Social Motive to Use the Legal System 26 Journal of Legal Studies (1997). Class 8: Judiciary and judicial reform - April 9 World Bank, The Judicial System in World Development Report: Building Institutions for Markets (2002) available at _ /Rendered/PDF/multi0page.pdf The World Bank, Legal and Judicial reform: Observations, experiences and approach of the Legal Vice Presidency (2002) available at Richard E. Messick and Linn Hammergren, The Challenge of Judicial Reform in Shahid Javed Burki and Guillermo E. Perry, eds. Beyond the Washington Consensus: Institutions Matter (1998) pp Duncan Kennedy, A Critique of Adjudication: fin de siècle (1997), chapter 10. Simeon Djankov ; Rafael La Porta ; Florencio Lopez-De-Silanes ; Andrei Shleifer, Courts, The Quarterly Journal of Economics, vol118(2), pp (May 2003), available at tpress/ /v118n2/s3/p453 Balakrishnan Rajagopal, Pro-Human Rights but Anti-poor? A Critical Evaluation of the Indian Supreme Court from a Social Movement Perspective, Human Rights Review, vol. 8(3) (2007), pp NO CLASS ON APRIL 16 PATRIOTS DAY 6

7 Class 9: The International Legal Context: Trade - April 23 John H. Jackson, William J. Davey and Alan O. Sykes, Legal Problems of International Economic Relations, Cases, Materials and Text, (2002). Sebastian Edwards, Openness, Trade Liberalization and Growth in Developing Countries, XXXI Journal of Economic Literature, September 1993 pp Ha-Joon Chang, Kicking Away the Ladder: Development Strategy in Historical Perspective (London: Anthem Press, 2002), Introduction. Balakrishnan Rajagopal, Taking Seattle Resistance Seriously, Op-Ed, The Hindu (hinduonline.com), December 11, Balakrishnan Rajagopal, A new opportunity in Cancun s failure and A Floundering WTO, available at Anne Orford, Globalization and the Right to Development in P. Alston (ed.), Peoples Rights (Oxford UP, 2001). (not in printed materials). General Agreement on Tariffs and Trade, 1994 available at Amrita Narlikar. The World Trade Organization, A Very Short Introduction (Oxford University Press, 2005) pp UNCTAD. (25 June 2004). Sao Paulo Consensus, TD/410, paras at Investment, Sovereignty and the Environment: The Metalclad and NAFTA s Chapter 11 in Confronting Globalization (Timothy Wise, et al eds, 2003) Class 10: The International Legal Context: Trade and.- April 30 Ernst-Ulrich Petersmann, Human Rights and International Trade Law: Defining and Connecting the Two fields, in Thomas Cottier et al, Human Rights and International Trade (2005), at Chrine Briening-Kaufman, The right to food and trade in agriculture in Thomas Cottier et al, Human Rights and International Trade (2005), at Nadakavukaren Schefer, Krista, Stopping trade in conflict diamonds: Exploring the trade and human rights interface with the WTO Waiver for the Kimberley process in Thomas Cottier et al, Human Rights and International Trade (2005), at Joost Pauwelyn, Human Rights in WTO Dispute Settlement in Thomas Cottier et al, Human Rights and International Trade (2005), at

8 Raphael Kaplinsky, Dorothy McCormick, Mike Morris The Impact of China on Sub-Saharan Africa IDS Working Paper 291 (November, 2007). Martin Khor, Bilateral and Regional Free Trade Agreements: Some Critical Elements and Development Implications (December 2007), available at Class 11: A Case study of Law and Development: Labor Law reform in Mexico/Latin America May 7 Michael Piore, Flexible Bureacracies in Labor Market Regulation (unpublished, 2010), available at Alvaro Santos, Labor flexibility, legal reform and economic development, 50 Virginia Journal of International Law 43 (2009). Alvaro Santos, The trouble with identity and progressive origins in defending labor law, in Global Governance: Critical Legal Perspectives (forthcoming 2013). RESEARCH PROPOSALS DUE ON THE 10 TH Class 12: Student presentations - May 14 8