January, 2018

Transition Economies

Rule of Law and Credible Commitment
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Must the rule of law spring upon us solely by accident and force, or can it also emerge as a product of political reflection and choice? As the lessons from the political and economic transition of centrally planned economies in Europe and Asia illustrate, the transitional movement requires an element of political reflection and deliberate choice, specifically the establishment a binding and credible commitment to limits on state action. In order to do so, credible commitment to the rule of law must be signaled exante by political reformers if reform efforts are to be successful, from which economic development follows expost. The historical record shows, however, that efforts to establish the rule of law in transition economies have been mixed. This chapter explains why this is the case, specifically by comparing Russia and China as case studies of transitional political economy.