tailieunhanh - THE WORLD BANK & RULE OF LAW REFORMS: GORDON BARRON

While such controls may overcome the agency problem between government and bank owners, it must be asked how significant this problem is in reality. A cursory review of recent banking crises would suggest that many causes for concern relate to management decisions which reflect agency problems involving management. Management may have different risk preferences from those of other stakeholders including the government, owners, creditors, etc., or limited competence in assessing the risks involved in its decisions, and yet have significant freedom of action because of the absence of adequate control systems able to resolve agency problems | Working Paper Series ISSN 1470-2320 2005 The World Bank Rule of Law Reforms Gordon Barron Published December 2005 Development Studies Institute London School of Economics and Political Science Houghton Street London WC2A 2AE UK Tel 44 020 7955 7425 6252 Fax 44 020 7955-6844 Email Web site depts destin Page 1 of 43 Table of Contents Chapter 1 Chapter Law and Development Part 1 The Law and Development Law and Development Part 2 The New Law and Development The Bank and the Two Competing The ROL under The ROL under The Bank s Definitions and Politico-Legal Chapter Definitions of the ROL and Legal and Judicial The Bank and its Reforming Reforming Chapter 4 1 Page 2 of43 Chapter 1 Introduction The World Bank s the Bank s discovery of the Rule of Law ROL and ROL reforms in the early 1990s is often held to be the result of a convergence of external factors not least the perceived limitations of the so-called Washington Consensus the emergence of an interest in good governance and the fall of Communism in Central and Eastern But the role of the ROL in development - whether this is perceived instrumentally or ontologically2 - has in fact a much older history than the Bank s relatively brief experience would suggest. Theoretical interest was shown by notably Max Weber who saw legal rationality as an instrumental factor accounting for the emergence of capitalism in Western Europe while practical interest was shown by the Law and Development Movement LDM of the 1960s and 1970s which - like the Bank is today - was dedicated to the idea that the law could be used as a tool to promote social and economic development. The LDM in particular has provided a wealth of ammunition for an academic community unconvinced of