What country is better for a postgraduate in law?

What is the role of law in the society, when it comes to economy, wealth creation and business? Not just business law, but how does the entire legal framework and infrastructure affect business in a country?

• Is a good legal system is pre-requisite for good economy? If yes, then what is a good legal system? What are the necessary features?

• Answer:

  There are many factors that affect the economy so I believe even with the right laws in place, a good economy may not necessarily result. However, the laws of a country do certainly affect the economy of a country. As the question posits, obviously the business or monetary laws have a direct impact. However,  business does not exist in a vacuum. The general state or environment of a country does affect business and laws affect the general state of the country. I've tried to answer the question generally, though I'm certain that my knowledge and experience with the Indian law and regulatory machinery will cololur my views. To answer this question, I'd like the approach of working backwards. It would be useful to think about what kinds of countries have good economies. What are the circumstances in which a good economy emerges? I believe the following are some attributes you can consider: 1. Political stability; 2. Lack of arbitrariness; 3. Proper exploitation of natural resources; 4. Generally a good economy entails some foreign trade, so good relations with other countries; 5. Work force. 1. Political Stability Political stability is essential because to thrive business needs an environment where policies don't keep changing. If new political orders keep establishing themselves every now and then, an element of arbitrariness evolves. Political stability is a primarily a function of how satisfied people are with how the State is run. If people are not happy, in the case of a democracy, they will vote the Government out and in case of an undemocratic country, they will create uprisings (either successful or unsuccessful). People are affected by the laws put in place by Governments and if they believe that their rights are being infringed or the laws of the land do not protect their interests, there will be political instability as they will try and bring the change that they need. 2. Lack of arbitrariness This is a follow on to the first point. Laws bring certainty and people would like to know that there is a consistent way in which they are treated. If there is a lacuna in the law giving discretion to the powers that be or the law is arbitrarily applied, there will be no confidence. If people have no confidence as to the application of the law, they would be chary of engaging in business, which is any way a risky proposition. Because we have a constitutional law that mandates non discriminatory treatment, assurance of certain basic rights and cautions against arbitrariness, there is some measure of comfort. As all laws have to follow the Constitution, if any law appears to suffer from any of these defects, the higher courts can strike them down. This procedure and this right is also a part of the law of the land. 3. Proper exploitation of natural resources Most obviously, wealth creation often centres around the natural resources of a country. The laws that apply to natural resources are important to ensure that: (i) there is no undue depletion, (ii) the environment is protected in the exploitation process; and (iii) there is a fair manner of allocation of resources. Both (i) and (ii) have a long term impact while (iii) is significant in the immediacy of its consequences. In India especially, with the exceptionally shoddy and corruption ridden manner in which coal blocks and telecommunication spectrum has been allocated, is an international embarrassment. Because the law was not clear and the existing law was not properly applied, these resources were allocated to certain parties in preference to other people, without following a proper bid procedure. The expose of this has affected (i) the credibility of the Government and makes investors and businessmen wary in investing in these sectors; and (ii) the recipients of these allocations as they are unable to go ahead with their projects. Please note that they have already made significant investments that they are now losing. This is not good for business or the economy. 4. Good relations with foreign countries The laws that you apply to foreign visitors to your country and the foreign businesses that want to invest in your country are a fall out of your foreign relations with other countries. And this obviously directly relates to the interest that people have in trading with you and investing in your country. If the laws of a country discriminate against foreign persons, they would not want to put their money there. 5.  Work force There is obviously a need for a qualified and competent work force in a country to service an industry/business. For this you need to ensure the safety of people (something that criminal law, safety laws and labour law would aim at), ensure that they get the right education (the manner of provision of education and establishment of institutions is governed by law) and also have a good set of laws bringing certainty to labour practices (labour or employment law). There has to be a balance between the socialistic aspects of labour law and the needs of industry (which is easier said than done). And additionally, due process of law The laws relating to redressal of wrongs, i.e. procedural law for administration of justice is just as important. A right without a remedy is now law. Therefore, unless there is a fair manner of trial and decisions for upholding any law, there is no protection offered either to individuals or businesses. From this brief overview, I think it is apparent as to how laws shape society and consequently business. In any case, however good the laws of a country are, unless they are implemented, statute books are paper tigers.