Remarks: Ambassador Jeffrey Davidow

By Davidow, Jeffrey | Law and Policy in International Business, Summer 1999 | Go to article overview

Remarks: Ambassador Jeffrey Davidow


Davidow, Jeffrey, Law and Policy in International Business


I think we all know that most legal systems in Latin America have suffered from a common set of failings, as well as a common set of virtues, but let us focus on the failings without any disrespect meant. Poor resources to support courts and judges, inefficient procedures for resolving disputes, politicized judicial appointments and promotional opportunities, which in some cases leads to an unqualified bench, result in biased decisions brought on by external influences.

As a result, citizens have been denied access to justice, and businesses have had to wait years for their cases to be resolved. These problems foster public disdain for the system or lack of confidence.

The political implications of weak legal systems are debilitating and often devastating, especially in societies and at times when governments and people are aspiring to greater levels of democratic governance. Obviously, as has been noted frequently this morning already, a capitalist economy requires the existence of a rule of law because it creates certainty and predictability, establishes a level playing field and promotes economic development. The existence of third-party enforcement mechanisms is a critical ingredient for a successful market economy. Douglas North, whom we have all read, holds that an inefficient legal system is the most important source of underdevelopment in the Third World. Those countries are marked by high levels of uncertainty both because of ambiguous legal doctrine and because of uncertainty with respect to the behavior of judges and other actors who participate in the various types of processes.

All of this greater understanding has developed a consensus within the hemisphere that we must move through processes of legal and judicial reform. In much of Latin America, greater judicial integrity is a by-product of reforms intended to create a legal environment conducive to economic development.

It is not accidental that this great spurt in judicial reform is coming at a time of great change in Latin economies and in their role in the world. Often, as in the case of Mexico, Argentina, Peru, and other countries, reform legislation has been introduced on the heels of severe economic crises in the late 1980s and early 1990s.

And as a consequence of each country's search for economic stability, their respective judicial reform packages were greatly influenced by the political interaction of the institutions and actors who oversaw the reform.

Ironically, or perhaps inevitably, although not imperative, economic and political turmoil have often served as catalysts for judicial reform. This is not always the case. There has been a great deal of economic and political turmoil over the centuries in Latin America that has not produced judicial reform. But in recent years we are seeing this develop.

There are many obstacles to judicial reform. As Mr. Berenson pointed out, one of the obstacles is the legal profession itself. Professionals, therefore, must be enlisted in reform projects.

Reform efforts have often failed because reformers must confront a multi-dimensional problem, which cannot be fixed by adding a few computers, training courses, and performance measures. …

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