Friday, December 07, 2007

The Rule of Law

At a conference at Yale a couple of weeks ago on international stuff there was much chin-waddling and brow-furrowing on the importance of rule of law for having a country run smoothly and grow up to be polite. But, I ask, what do you really need for rule of law? Just laws and an independent judiciary, or a populace that internalizes the law? The letter -- which killeth, or the spirit -- which giveth life?

Immediately post Enron / Tyco etc. there was much hue and cry about how US GAAP accounting standards encouraged a literalist bent, which in turn fostered cheating, while the European IASC standards were more principles-based -- which gave us Parmalat and others. Now the same debate goes on between the SEC's rules orientation and the British FSA's principle-based approach. And Sarbanes-Oxley is demonized for pushing firms to list on foreign exchanges.

When is rule of law too much law? Go to Germanic Europe and people get all pissy if you so much as jaywalk. Fat lot of good is does them.