Money Can't Buy You Law: The Effects of Foreign Aid on the Rule of Law in Developing Countries

Erbeznik, Katherine
July 2011
Indiana Journal of Global Legal Studies;Summer2011, Vol. 18 Issue 2, p873
Academic Journal
The rule of law is often touted as a panacea for the problems faced by the developing world. As a result, billions of dollars in foreign aid have been spent trying to promote the rule of law in developing countries. However, in many cases, little observable progress has been made. This Note explores some of the reasons rule of law reform efforts have stalled. One reason is that reform has focused solely on formal rule of law institutions, rather than on the informal political or cultural norms that are needed to support such institutions. Little is known, however, about how to foster such political and cultural norms where they are lacking. This Note argues that, at a minimum, fostering such norms requires a will to reform on the part of governments and political elites. Foreign aid, in the form of monetary transfers, has negative unintended consequences on the will to reform. By drawing on the economic literature detailing how foreign aid can provide perverse incentives for developing country governments, this Note argues that foreign aid decreases the incentives of governments and political elites to adopt a will to reform. In turn, this makes rule of law reform less likely to be successful.


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