In considering regulation and deregulation in developing countries, this paper addresses the issue of legal infrastructure, first (in section 2), by reviewing the literature on the relationship between economic growth and legal systems. The predominant (though by no means unanimous) view which has emerged is that legal structures, particularly those relating to the \"rule of law\" (section 3) have an important influence on economic development; and that the failure of attempts to reform those structures, particularly by adopting Western models, has impeded growth. Attempts to eradicate corruption, another fetter on economic performance (section 4), have also foundered. In the remainder of the paper (section 5), explanations are sought for these failures by reference to cultural tensions, political influence and inappropriate goals formulated by donor institutions and Western commentators.
Manchester, UK, CRC Working Paper, No. 65, 28 pp.