Law and Order Is Fundamental to Economic Heath

It is widely recognized that a culture of law and order are essential for economic development. (If not widely recognized, it ought to be.) A stable and predictable legal system, effective law enforcement, and a low level of crime are all factors that contribute to community health. These factors can help attract investment, promote entrepreneurship, and create a favorable business environment. 

On the other hand, a weak legal system, ineffective law enforcement, and high levels of crime can deter investment, discourage entrepreneurship, and undermine economic growth. 

For example, a weak legal system can make it difficult to enforce contracts, protect property rights, and resolve disputes. This can discourage businesses from investing in a community, as they may be worried about their assets being stolen or their contracts being broken. 

Ineffective law enforcement can make it difficult to catch criminals and bring them to justice. This can lead to a rise in crime, which can make people feel unsafe and discourage them from starting businesses or investing in their communities. It can make employees fearful of working after dark downtown.

High levels of crime can also make it difficult for retail businesses to operate. For example, businesses may have to spend more money on security, or they may have to close early in order to avoid being robbed. This can reduce profits and make it difficult for businesses to grow. 

Therefore, it can be argued that law and order are critical components of economic development. 

* * * 

How has it come about the in many places it seems like the attitude is "Economic Development Is Bad" and "Crime Is Good." I mean, why do so many cities stop arresting or prosecuting criminals? Why are so many police officers taking early retirement? How can a trouble maker be stopped 100 times in a single year and not ever go to jail. When he doesn't show up in court, he is allowed to say, "I intended to" but nothing happens. 

What's going on?

Some people believe that police have too much power because they are often armed and have the authority to use force. They argue that this power can be abused, and that police officers are often not held accountable for their actions. While these things may be true, others argue that police need to have a certain amount of power in order to do their jobs effectively. They point out that police officers often face dangerous situations, and that they need to be able to use force to protect themselves and the public.

There's no doubt that police have a great deal of power. It's important to remember, however, that this power is not absolute. Police officers are still subject to the law, and they can be held accountable for their actions.

No one wants a police state. There is, however, something to be said for a desire to feel safe on our streets and in our homes. 

More can be said, but this will serve as a start.

How Laws Encourage Or Restrict Economic Development

All over the world countries are reforming the ways they do things in order to encourage development. They have no interest in remaining stagnant economically. They have watched the West and seen what progress looks like and how stagnation occurs. A major area of reformation, as it turns out, has to do with government regulations. Do they incentivize growth or strangle it. Does the culture fertilize the spirit of entrepreneurship or kill it with toxic chemicals.

Historian Niall Ferguson discusses this in his book The Great Degeneration: How Institutions Decay and Economies Die.

Ferguson studied the volumes of data gathered by the World Bank to evaluate the nations in Africa that he might identify which countries in Africa ranked highest by the following measures:

1. The Quality of Public Administration
2. The Business Regulatory Environment
3. Property Rights and Rule Based Governments
4. Public Sector Management and Institutions
5. Transparency, Accountability and Corruption in the Public Sector

The top countries that rank highest in four or more of these categories were Burkina Faso, Ghana, Malawi and Rwanda.

According to Ferguson, another way of evaluating is to look at the IFC's "Doing Business" reports since 2006. Which countries have done the best at reducing the number of days it takes to complete the following six procedures:

1. Starting a Business
2. Getting a Construction Permit
3. Registering a Property
4. Paying Taxes
5. Importing Goods
6. Enforcing Contracts

The African winners, in order of achievement, were Nigeria, Gambia, Mauritius, Botswana and Burundi.

Paul Collier, a development economist, outlines several stages to making commerce happen. Foremost is the necessary step of reducing violence. Second, protect property rights. Third, impose institutional checks on government. Fourth, prevent corruption in the public sector.

When I look at this list, my first thought is how cities that don't deal with inner city violence are essentially undercutting their hope for a better economic future. As for property rights, to the degree that cities can utilize easy "eminent domain" to eliminate businesses, to that degree they are sending signals to other businesses to consider a flight to safety.

* * *

There was a time when the United States set the benchmark as regards the Rule of Law. Now, Ferguson states, it's the lawyers who rule. This is not the same thing. It's worth noting that lawyers are over-represented in our U.S. Congress. You might even say we have a nationwide epidemic of lawyers.

Cronyism and corruption are excessive as well. There is so much that is rotten in the legislature and regulatory agencies and the legal system itself, how can they be reformed?

Ferguson's answer to this is that real reform must come from outside the public institutions, from the associations of civil society. In short, from us, the citizens. 

* * * 

I remember reading a story years ago about an albacore fish business that was started in Los Angeles (or the vicinity). In order to just get the business off the ground they had to get approvals and paperwork from 49 government entities. Once they had gotten going, yet another agency read about what they were doing and because they did not have this agency's stamp of approval had to pay a $25,000 fine. 

WE GET WHAT WE INCENTIVIZE.
Here in Duluth we have a shortage of affordable housing. One potential fix here might be to do a thorough self-analysis of every facet of local government that has to do with housing. How many rules and regulations are interfering with the ability of the city to provide affordable housing? How necessary are they? Can they all be listed and prioritized?  Who has the authority to address each one (or each of the most restrictive items. 

We always think more money is what we need. What things can be changed without needing money? 

The book has generated a lot of ideas. Rather than blaming or finding fault, we can work together and discover solutions. Let's not give up hope.