The Rule of Non-Law, Impacts on Growth and Poverty Reduction

This capacity-building proposal is for interdisciplinary research that investigates the “rule of non-law” as an essential aspect of the alleviation of poverty in developing countries. The growth of SMEs and a host of other economic activities, especially as they serve populations living at the base of the pyramid, cannot await the development of OECD-level legal regimes. Our hypothesis is that they may be facilitated by strategies and techniques that do not depend on formal legal institutions. Understanding the ways in which such non-legal techniques can substitute for effective legal institutions, including effective and unbiased courts, is central to understanding and facilitating economic development and alleviating poverty in the poorest countries. Using mixed methods, we will examine the rule of non-law in six domains: contracts, impact investing, corporate governance, banking, constitutional design, and comparative legal institutions.