Bank Support for Law

Strong Knowledge Base

Lending for Reform

Thematic Perspectives

Building Effective Legal and Judicial Systems

Fighting poverty for lasting results is the World Bank’s mission. Effective and equitable legal systems are vital to eradicating poverty—and sustaining gains. The Asian financial crisis of the late 1990s demonstrated not only that a sound financial architecture is essential for growth but also that an effective legal and judicial system is paramount for growth to be equitable and sustainable. The transition in Eastern Europe has shown that market forces alone, without transparent laws and fair enforcement, can lead to uneven economic growth and increased poverty. Poor people often lack legal rights that would empower them to take advantage of opportunities and protect them from arbitrary and inequitable treatment. They, more than any other group in society, are adversely affected by laws permitting discrimination, deficient laws and institutions that fail to protect individual and property rights, and insufficient enforcement of these laws, as well as other barriers to justice.

These lessons have prompted an increasing number of countries to promote the rule of law as a sine qua non of development and to recognize the need for legal and judicial reform. The rule of law requires the existence of an appropriate legislative framework and predictable and fair enforcement by independent judiciaries, and it calls for accountable and legitimate governments to maintain order, promote private sector growth, and fight inequality.

Bank Support for Law and Justice

In line with a more comprehensive approach to development, the Bank’s support for law and justice has evolved from specific law reform, aimed at economic development, to a broader spectrum of activities. Such activities have included legal education for the general public in the Russian Federation, anticorruption programs in Sri Lanka’s judiciary, indigenous dispute resolution mechanisms in Guatemala, and legal aid for poor women in Ecuador. While the majority of legal and judicial reform projects have an indirect impact on poor people, innovative components are often included in projects to reach the most vulnerable members of society. In poorer countries, the Bank supports efforts to bring justice close to the poor both physically and culturally by enhancing effective traditional informal mechanisms—while at the same time building a compatible formal system, and changing inherent traditional biases that may hurt the poor. In its work with middle-income countries, the Bank concentrates its efforts on modernizing the legal framework and strengthening the judicial system to promote economic development and social inclusion.

The broad objectives of assistance are to help bring about legal and judicial reform, improve governance and physical infrastructure, and increase access to justice. Key elements of reform include promoting judicial independence through improved appointment systems, planning, and financing, as well as disciplinary procedures; modernizing judicial administration and case management; and training judges and court personnel. Governance improvements encompass strengthening anticorruption programs, building capacity in public agencies and civil society organizations, and supporting bar associations and legal education. Bank assistance may include improvements in physical infrastructure, such as providing public information areas in courthouses and setting design standards for court buildings to improve physical access for the public, as well as to increase efficiency. Access to justice can be enhanced by providing legal counseling and advocacy, particularly for the vulnerable, and by developing alternative dispute resolution mechanisms and modernizing court administration.

Working closely with governments, bar associations, judges, and civil society, the Bank is embarking on a number of activities in support of law and justice (figure 3.5). These diverse activities include the sharing of global and regional knowledge on topical issues, assessments of countries’ legal and judicial systems, and financing of countries’ legal and judicial efforts. Together, these activities are helping to promote legal knowledge, as well as capacity and institution building, prerequisites for legal reform and for effective use of financial assistance.

Building a Solid Knowledge Base through Nonlending Services

Sharing of global experience. As work on legal and judicial systems must be founded on solid knowledge, creating and disseminating global knowledge on legal and judicial reform has become a major focus of Bank assistance in this area. Following strong participation by legal, judicial, and other interested experts in the Global Conference on Comprehensive Legal Reform held in June 2000, the Bank launched an electronic forum to broaden the dialogue and build on the partnerships forged during the conference. Over 600 subscribers from around the world participated in this virtual discussion. Later in the year the Bank launched the Development Gateway for Law and Justice, initially focusing on insolvency law, judicial and legal reform, child labor law, and international environmental law. A new electronic forum initiated in May 2001 sought to develop momentum for the July 2001 Conference, "Empowerment, Security and Opportunity through Law and Justice," in St. Petersburg, the Russian Federation. It also served the purpose of benefiting those unable to attend the conference.

Building capacity among legal practitioners. Knowledge sharing took other forms in fiscal 2001. The Bank designed and launched a distance learning pilot course for Bangladesh, Indonesia, the Philippines, Sri Lanka, and Thailand, entitled "Judicial Reform: Improving Performance and Accountability." This course focused on judicial independence and accountability, case management, empirical research, and corruption control. Another innovation is the World Bank’s Legal Yearbook, a publication to be launched jointly with the IFC and MIGA, offering seminal articles, case studies, and legal materials covering various subject areas of development law.

Sharing global best practice. While laws are country specific, they benefit from regional harmonization and incorporation of global best-practice principles to foster empowerment, security, and opportunity. Advisory services to borrowing countries helped tailor global comparative expertise to country-specific culture and traditions in a growing number of areas. These areas have expanded to include banking, corporate governance, environment, insolvency, infrastructure, water and forests, and land titling, as well as gender equity and indigenous peoples. In addition, an insolvency initiative— in partnership with the IMF, regional development banks, IFC, the United Nations Commission on International Trade Law, the Organisation for Economic Co-operation and Development, the International Federation of Insolvency Practitioners, and the International Bar Association—was launched to develop best practices and guidelines for effective insolvency and creditor rights’ systems. Also, the Bank established an International Advisory Council on Law and Justice, made up of leading jurists and legal scholars, to provide guidance to the Bank on its law- and justice-related activities.

Assessing countries’ legal and judicial systems. Through intensive, comprehensive diagnostic assessments, the Bank has been building its knowledge of the significant elements of countries’ legal systems. Legal and judicial sector assessments are the basis for dialogue with governments and for the design and implementation of programs, in concert with other development partners. In fiscal 2001 the Bank undertook assessments for Argentina, Romania, the Russian Federation, the Slovak Republic, and the Federal Republic of Yugoslavia. Such assessments review appointment and disciplinary procedures of judges and provide baseline information on each system’s effi-ciency and effectiveness. Results from some of the assessments show that key areas in need of further in-depth analysis are access to justice, alternative dispute resolution mechanisms, gender protection, the cost of inefficient systems, and corruption.

Lending for Reform

To date there are 31 stand-alone projects in legal and judicial reform; there are more than 10 times that number of components in Bank-financed projects that deal with some aspect of legal and judicial reform. New lending for legal and judicial reform amounted to $47 million for fiscal 2001—with another $51.5 million in preparation—and concentrated on deepening reforms in some of the world’s poorest countries. Activities included: a comprehensive program for legal and judicial reform in Bangladesh (see box 3.10) as well as similar programs in preparation for Benin, Guinea, the Philippines, and Sierra Leone. The first full-scale evaluation of a judicial reform project was completed for Bolivia, allowing the Bank to draw the first lessons for other legal and judicial work in Latin America. The evaluation underscored the long-term nature of legal and judicial reform and the need for not only realistic expectations and goals but also unflinching commitment by the government and all stakeholders.

A survey of recent Bank activities in knowledge, capacity building, and law reform in 84 countries shows that the Africa Region had the highest percentage (52 percent) of capacity-building activities in legal and judicial reform (figure 3.5). Capacity- and institution-building aspects of the legal and judicial reform activities supported by the Bank aim at strengthening the judiciary, strengthening legal institutions, and increasing access to justice. Included in these activities was a series of workshops held to support the harmonization of commercial codes in 16 (francophone and lusophone) African countries under the Organisation pour l’Harmonisation en Afrique du Droit des Affaires Treaty, as well as the strengthening of the women lawyers’ association in Niger to increase its capacity to deliver legal services to the rural and urban poor. Forty-nine percent of the activities in the South Asia Region were law reform activities; the Europe and Central Asia Region was close behind with 38 percent. These activities included reviewing land titling in Sri Lanka, as well as providing technical assistance on insolvency, enterprise restructuring, and institutional and regulatory reforms in the Czech Republic. The East Asia Region had the largest number of knowledge activities, including a legal needs assessment in Mongolia.