REGIONAL COOPERATION AND ECONOMIC INTEGRATION

PART IV:
the establishment of the rule of law, the World Bank and the IMF also hope to reduce
corruption, which undermines economic development by scaring away investors and
preventing the free flow of goods and capital.
Currently, in its Millennium Development Goals (MDG), the United Nations (UN) also
champions the rule of law as a vehicle to bring about more sustainable environmental
practices. The MDGs are eight goals that the UN hopes to achieve by 2015 in an effort to
respond to the world’s greatest development challenges. The MDGs call on nations to make
laws in areas such as international environmental and energy law, and also call on nations
to encourage their citizenry to abide by those rules through changes in custom. The UN
explicitly acknowledges that achievement of the MDGs rests heavily on the development
of the rule of law, among other factors.
One reason the development community is fostering legal and judicial reform is the belief
that, beyond their intrinsic worth, such reforms will help improve economic performance.
This belief in the power of legal and judicial reform to spur economic development
is supported by a growing body of research showing that economic development is
strongly affected by the quality of institutions – including the quality of a nation’s legal
institutions.
The structure and quality of political institutions can affect whether the government
facilitates or inhibits economic development. Stated most simply, the incentives institutions
create for government decision-makers will determine whether the government uses its
power to create a framework for productive economic activity or to redistribute wealth to
itself or its supporters.
These arguments establish a strong basis for the claim that a successful economy requires
appropriate legal and political institutions. Despite the difficulty inherent in measuring the
quality of institutions, progress is being made in investigating the link between institutional
quality and economic development. Despite all the problems with measuring the quality
of institutions, almost all empirical work on the subject has concluded that institutional
quality – in one form or another – correlates strongly with economic development.
The rule of law and the quality of legal institutions exert certain influence on the economic
and social development. Also, the rule of law, independent judiciary and the quality of
legal institutions provide legal security and legal certainty that are necessary for regional
cooperation, foreign investments and economic integrations.
CONCLUSION
The rule of law and judicial independence are institutionalized guarantees of the legal
state, as well as basic human rights and civil liberties. This very essence is what assigns
them the status of civilizational inheritance and social values. The judicial independence is
the ability of a judge to decide a matter free from pressures or inducements. Additionally,
the institution of the judiciary as a whole must also be independent by being separate
from government and other concentrations of power. The principal role of an independent
judiciary is to uphold the rule of law and to ensure the supremacy of the law. If the judiciary
is to exercise a truly impartial and independent adjudicative function, it must have special
powers to allow it to “keep its distance” from other governmental institutions, political
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