Voigt, Stefan --- "Judicial independence as a necessary component of the rule of law: preliminary insights and economic consequences" [2005] ELECD 109; in Marciano, Alain; Josselin, Jean-Michel (eds), "Law and the State" (Edward Elgar Publishing, 2005)

Book Title: Law and the State

Editor(s): Marciano, Alain; Josselin, Jean-Michel

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781843768005

Section: Chapter 8

Section Title: Judicial independence as a necessary component of the rule of law: preliminary insights and economic consequences

Author(s): Voigt, Stefan

Number of pages: 27

Extract:

8. Judicial independence as a necessary
component of the rule of law:
preliminary insights and
economic consequences
Stefan Voigt*

1 INTRODUCTION

In recent years, it has become almost commonplace to turn to institutional
variables for explaining differential growth rates. The ensuing debate on
`good governance' focuses primarily on institutional factors among which
the `rule of law' occupies a prominent place. In this debate, judicial inde-
pendence (JI) has always fared prominently.
If the judiciary is independent from pressures by the other government
branches, this will make the promises of the other branches ­ for example,
with regard to the protection of property rights ­ more credible. In the long
run, even the other branches which are constrained by an independent
judiciary will be better off: if promises are attributed higher credibility,
this will lead to additional investment which will, in turn, lead not only to
higher income and growth but also to higher tax receipts of the state. Yet,
an independent judiciary that constrains government action can be costly
in the short run and there is always the danger that factual independence is
lower than the degree of independence found in legal documents.
In this chapter, one indicator for measuring formal as well as factual JI is
introduced. There have been some attempts to estimate the degree to which
the rule of law is realized in different countries. The data published by the
International Country Risk Guide (ICRG; see, for example, Knack and
Keefer 1995) is one such example. These are data ...