Rules versus Standards in Developing Countries The Case for Clear and Precise Legal Norms on Eminent Domain

Hans-Bernd Schäfer

Bucerius Law School, Hamburg

Abstract

We relate the rules versus standards debate to legal norms of taking law in developing countries and argue in favor of more precise legal norms regulating takings in low income countries. Clear, specific and exact legal norms should be socially preferred whenever a regulatory law cuts into fundamental rights as this improves the possibilities of supreme courts to check the constitutionality of such norms. This holds equally for rich and poor countries. But in poor countries precise norms have additional advantages over standards, whose adjudication requires highly qualified and loyal judges and administrators, is information intensive and increases procedural costs for the parties. We argue that in the course of economic development courts and administrations should be granted more flexibility and rigid rules should gradually be replaced by more adjustable legal standards which are more flexible and can adjust better to the merits of a single case.

Key words: Law and Economics, Law and Development, Rules versus Standards, Takings, Eminent Domain.

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