chapter  4
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Rule of Law rhetoric is all around us - in the business press, in the programs and publications of the World Bank, International Monetary Fund (IMF) and Asian Development Bank (ADB), in bilateral development assistance projects, and even in US-China diplomatic dialogue. Notably, however, the Rule of Law is not being touted in these primarily for its traditional political role as a protector of human rights and individual dignity. Rather, the new rhetoric makes the claim that the Rule of Law is a crucial element in economic development, not only in formerly socialist countries ('transition economies ') (World Bank, 1996), but in developing capitalist countries as well. 1

More recently, a separate torrent of Rule of Law language has been unleashed, this time in reaction to the Asian financial crisis. Some of this is serious and well intentioned,2 while some of it has a distinctly gloating tone.3 It should be clear, however, that these two claims cannot both be true. If the claim that East and Southeast Asian societies lack the Rule of Law is true, this presents a serious challenge to the first claim, given that these parts of Asia have been the economic development success story of the twentieth century. A compromise position might be to posit that the Rule of Law becomes necessary once a certain level of economic development and complexity has been reached, now the case in a country like South Korea. This position would fit well with the idea being put forth elsewhere that an 'Asian model' was effective for catching-up, but that the model suffers from inherent flaws that make it ineffective for an advanced economy. But even this more nuanced approach, to the extent that it admits a lack of the Rule of Law in, for example, Taiwan of the 1960s and 1970s, presents a clear challenge to claims for the necessity of the Rule of Law for economic development.