The pocketbook explains key components of concepts of Rule of Law and its importance in creating a dynamic economy based on innovation and growth.
It talks about few key aspects of Rule of Law such as safety of life and property, limitation of government arbitrariness, contract laws, dispute resolution methods and maintaining competitive environment.
“When it cannot be predicted whether a government will issue a permit, confiscate or nationalize the investments of business people, tax them into bankruptcy, or arbitrarily stall their operations, people tend to do business elsewhere. This type of unpredictable environment with profound government arbitrariness is not conducive to enterprise building. It drives businesses away creating unemployment. Similarly, when the government arbitrariness is too high and there is very less predictability for business people to run their business, they tend to opt for other survival mechanisms like bribing or using personal connections. This might in turn create monopoly too. Hence, government arbitrariness invites a lot of malpractices where people with more money and power get special privileges.” – An excerpt