Law Reform - Relation With Economics

Relation With Economics

Legal reform can be the «driver» for all other reforms, including reform of the economy. A true market economy cannot be created without ensuring both full guarantees of private property and transparent predictability for entrepreneurial activity, on the one hand; and sufficiently reasonable legal control over economic processes, on the other hand. Legal reform should be an integral part of any on-going reform process. Legal reform is a tool for implementing necessary reforms, to balance competing interests, create a dynamic and sustainable economy, and build a sustainable civil society. During last decades the judiciary became active in economic issues related with economic rights established by constitution because "economics may provide insight into questions that bear on the proper legal interpretation". Since many a country with a transitional political and economic system continues treating its constitution as an abstract legal document disengaged from the economic policy of the state, practice of judicial review of economic acts of executive and legislative branches became to grow.

The budget of the judiciary in many transitional and developing countries is completely controlled by the executive. The latter undermines the separation of powers, as it creates a critical financial dependence of the judiciary. The proper national wealth distribution including the government spending on the judiciary is subject of the constitutional economics. It is important to distinguish between the two methods of corruption of the judiciary: the state (through budget planning and various privileges), and the private.