The Caribbean single market and economy (CSME) - testing the rule of law in the Caribbean economic development plan

• Author: Debbie M. Placid
• Position: Law Intern at Gibbons, Del Deo, Dolan, Griffinger & Vecchione, P C New York
• Pages: 109-132

THE CARIBBEAN SINGLE MARKET

AND ECONOMY (CSME) -

TESTING THE RULE OF LAW IN THE CARIBBEAN

ECONOMIC DEVELOPMENT PLAN

DEBBIE M. PLACID*

The

legal

framework in a country is as vital for economic development as

for political and social

development.

Creating wealth through the cumulative

commitment of human,

technological

and capital

resources depends greatly

on a

set

of

rules

securing property

rights,

governing

civil and

commercial

behaviour,

and

limiting

the

power of the state ... The legal framework

also affects

the

lives

of the

poor and, as such, has

become

an important dimension of

strategies

for poverty

reduction. In the

struggle

against

discrimination,

in

the protection

of the

socially

weak,

and in the distribution of opportunities in

society,

the law can make an

important contribution to the just and

equitable society

and thus

to

prospects for

social development

and poverty alleviation.1

By reason of this assertion that there is a symbiotic relationship between law

and economic growth, Member Governments of the CARICOM Community

created the newly established Caribbean Court of Justice (hereinafter CCJ)

as the mainstay of the Revised Treaty. Likewise, the CSME development

blueprint delineates the modernizing and harmonizing of specific areas of

substantive law to give effect to the Revised Treaty. The confirmation by the

premier development agency, the World Bank, of the central role that law plays

in a country's economic development has become the development dogma in

recent

years.

This upswing in the law and development science seems to ignore

the "well-documented death" of the law and development movement in the

1960V1970's, which claimed that Western-style legal transplants in developing

* Debbie Placid is a Law Intern at Gibbons, Del Deo, Dolan, Griffinger & Vecchione, P C New York.

1 World Bank, 1994: see Patrick McAuslan, "Law, Governance and the Development of the Market: Practical

Problems and Possible Solutions", in Julio Faundez

(ed.).,

Good Government

and Law: Legal and Institutional

Reform in Developing

Countries

(London: MacMillan, 1997).

countries induce positive economic change.2 Several recent studies claiming

a

"causal connection between the variables that measure the respect

for

the rule

of

law

and

socio-economic growth"3

now

contend that

law and

legal institutions

are

the

sine

qua non for

nations' economic well-being.

In recent years, 'Neo-Institution Economists' (NIE), such

as

Douglas

North, expanded

on the

rule of law canon,

by

shifting

the

focus

to

institutions

as

the

rules

of the

game

in an

economy.4 North professed that Institutions

-

which

can be

formal (constitutions, law, regulations, contract) and/or informal

(social norms, codes

of

conduct)

-

rules

and the

extent

to

which they

are

enforced determine

the

incentives

to

which economic actors react. This

in

turn

"encourages exchange

and

investments,

the two

main wealth-creating activities

in

a

capitalist system."5 Similarly, political scientists suggested that Institutions,

such

as an

independent judiciary

and

legal rules, define

and

protect political

arrangements such

as

democracy, respect

for

human rights

and the

welfare

state,

said

to be the

characteristics

of

developed societies.6 Thus,

it is

widely

accepted across

the

development landscape that

law and the

"overall 'quality'

of

legal institutions"

are

endogenous

to a

country's economic development.7

The blueprint

of

the CSME follows

the

conventional conception that

the

rule of law

is

central

to the

Caribbean economic development

and

integration

plan. Thus,

the

establishment of the

CCJ to

uphold

and

enforce rulings

is

held

to

be the

judicial organ

for the

"legal

and

economic cohesion

for the

operation

of

the

Revised Treaty."8 CARICOM member governments reasoned that

the

regulatory framework

of the

CSME, established according

to

legal principles

and with

the

force of law, will create stability

and

predictability, generate rights

and

privileges,

thereby giving rise to economic opportunities.9

As

such, investors

and individuals will

be

willing

to

take advantage

of the

potential economic

advancement

in the

anticipated creation

of the

Caribbean 'single economic

space.' Consequently, this will spur social

and

economic returns

in the

region.

2 Davis, Kevin

E.,

What

Can the

Rule of Law Variable Tell

Us

About Rule of Law

Reform?,

NYU Law and

Economics Research Paper No.04-026,

at 2.

3 See generally Kevin Davis,

supra

n.2.

On

studies supporting this view

see

J.

Barro, Determinants of Economic

Growth:

A

Cross-Country

Empirical Study

(MIT

Press, 1998); Daniel Kaufmann, Aart Kraay,

and

Pablo

Zoido-Lobaton,

Governance

Matters,

World Bank Policy Research Working Papers

No. 2196

(1999).

4 Davis, Kevin

E., and

Michael

J.

Trebilcock, "Legal Reforms

and

Development",

22

Third

World Quarterly

(2001),

at 21.

5 Davis, supra n.2,

at 3.

6

Ibid., at 5. See

Mancur Oslon,

Power

and

Prosperity:

Outgrowing Communist

and

Capitalist

Dictatorships

(2000),

at 72

(discussing

the

role

of

an independent judiciary

in

sustaining democracy).

7

Ibid.-,

Davis

and

Trebilcock, supra

n.4.

8 McDonald, Sheldon

A.,

"Caribbean Perspective:

The

Caribbean Court of Justice: Enhancing

the Law of

International Organizations",

27

Fordham International Law

Rev.

(2004)

930.

9

Ibid.