The New Law and Economic Development: The Future of Law and Development: Second-Generation Reforms and the Incorporation of the Social

Abstract

level but which become clear by focusing not only on efficiency, but on the full range of things rules and institutions actually do. An important part of the task is simply to illustrate the point made at the outset, which is that legal norms and institutions operate in multiple modes: normative, distributive, constitutive, and disciplinary. Another is to observe that the rules that govern economic transactions in industrialized states have always served multiple functions the enhancement of efficiency is but one. To reduce the focus of the reform of legal rules and institutions to concerns about efficiency and market failures, even assuming that the calculus that underpins these efforts is adequate,130 is to miss many of their other properties and effects and to radically reduce in scope the aspirations driving legal regulation. Using historical or genealogical, doctrinal, sociolegal, and other analyses, legal scholars can assist in demonstrating how and why the associations between some institutions and both economic growth and social justice may be unsafe, only loosely connected, largely contingent or alternatively more plausible and robust in any particular context. But above all, such analyses can disclose how they are variable and contested. This, in turn, might provoke a reconsideration of the status both of the rules and institutions that are in vogue and those that are currently discredited. In addition, a historical perspective of any substantial duration is likely to trouble the static image oflaw that often prevails in development debates, illustrates the dynamic, unstable, and transitory nature of legal forms, and suggests the reasons that legal rules and institutions might be viewed as a contingent settlement of interests, values, and concerns. However, legal scholars are also in a position to point out possible synergies between the two sides of the agenda that may exist via different institutional reforms. They may also observe internal conflicts in the commitment to economic agenda itself that remain invisible because of the ideological commitment to the current reform agenda. It is very unclear, for example, that better aggregate economic effects are necessarily generated by the "deregulated" labor markets the IFIs now favor; it is almost certainly true that categorical claims about their effects cannot be maintained across the board. But the argument also cuts in the other direction: such analyses might also remind those wedded to social justice through human rights or equality claims that social agendas can be furthered in a variety of ways, and that rights, even if institutionalized in particular ways, are no guarantee of progressive outcomes, particularly in the widely varying contexts in which they are now expected to operate. 130 There are powerful analyses that suggest how and why both the standard modes of assessing efficiency within the IFIs and the association of efficiency enhancement with particular institutional forms and practices might be inadequate. See, for example, Deakin and Wikinson, supra note 54; Elson, supra note 52. The Future of Law and Development 251 As described earlier, rules and institutions may be designed to provide basic levels of security or protection to particular classes or to society in general; labor and employment standards, such as minimum wage laws or health and safety standards are an example of the first, while consumer protection laws stand as an example of the second. Or, like collective bargaining laws, their explicit purpose may be to redress the balance of power among the contracting parties that would obtain in their absence and to alter the sources of rule-making authority in the context of work and production. Like environmental and consumer protection laws, they may be designed to shift the allocation of risk and/ or compel parties to internalize costs that they could otherwise impose on others. Like zoning laws, by allocating different activities to different places, they may literally help constitute the urban geography of societies, chart the direction of future growth and simultaneously influence the fortunes of different groupS.131 While all of these rules and institutions may be efficient as well, efficiency is not necessarily their primary function or effect. Rather, they may be designed to redistribute power and authority. Conversely, even rules that are designed to further efficiency typically generate myriad distributional consequences, consequences that may be both unexpected and far reaching. As these possibilities are often underestimated, one task is to relentlessly document, in both general and more specific ways, the distributive stakes of governance and legal reform projects advanced by the IFls, whether first or second generation or both and whether advanced in the name of the rule of law, efficiency, equality, human rights, labor market justice, or any other value or end.132 There is clearly similar work to be done on the legal reform agendas promoted by social justice constituencies toO.133 This form of analysis helps shift the focus from the projected, overall consequences of reforms in the long term to their more proximate effects on different sectors and populations. (Who or what constitutes the object of concern is a political question in and of themselves, the answer to which will vary from context to context.) It may also help explain why even the expected aggregate effects often fail to materialize. At minimum, this should help provoke reflection on the fact that tradeoffs among different objectives and different fates for different groups may be just as likely as seamlessly coterminous progress on both the macroeconomic and social fronts. By highlighting, rather than suppressing, the fact that winners and losers are to be expected, such analysis should also provoke debate over whether their 131 G ERALD E. FRUG, CITY-MAKING: BUILDING COMMUNITIES WITHOUT BUILDING WALLS (2001). 132 For one effort to engage in this type of analysis with respect to first generation reforms, see Rittich, supra note 9. 133 For an exemplary analysis of the ways that strategies to promote gender equality might work at cross purposes with the interests of other marginalized or disadvantaged groups, see the discussion by Janet Halley in Brenda Cossman, Dan Danielsen, Janet Halley and Tracy Higgins, Gender, Sexuality, and Power: Is Feminist Theory Enough?, 12 COLUM, J. GENDER & 1. 601 (2004) .