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Rule of Law and Its Effects on Economic Growth

Author

Listed:
  • Ana Udovicic

    (University of Applied Science, Šibenik, Croatia)

  • Katarina Maroševic

    (Josip Juraj Strossmayer University, Faculty of Law, Osijek, Croatia)

Abstract

It is generally assumed that the rule of law is essential for economic growth. However, it is clearly a multidimensional concept, including a variety of discrete components. Literature has a huge amount of cross-national data claiming to measure the rule of law. Yet even the very best work in the field has not been adequately attentive to the multidimensionality of the rule of law concept. As a governance principle, it ensures the enforcement of equality in a society, in different spheres. Therefore, in a broader sense, it ensures the avoidance of arbitrariness and is interconnected with institutions and economic growth and development. The 2023 Rule of Law Report, including its 27 country chapters, examines developments across all Member States in four key areas for the rule of law: the justice system, the anti-corruption framework, media pluralism and freedom, and other institutional issues related to checks and balances. The World Justice Project developed the World Justice Project Rule of Law Index as a quantitative tool that measures the rule of law in practice. This article’s aim is to present the World Justice Project Index for Croatia and other EU countries as a helpful tool for comparative methods with another measurement of the Rule of Law, for instance, the Rule of Law Group/Pillar as apart from the Economic Freedom Index. Additionally, this article aims to present chosen research on the rule of law and institutions and its relation to economic indicators and economic growth and development. The article will present theoretical and empirical secondary data on the relationship between institutions, the rule of law, governance, and economic growth.

Suggested Citation

  • Ana Udovicic & Katarina Maroševic, 2024. "Rule of Law and Its Effects on Economic Growth," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 22(5), pages 510-525.
    • Handle: RePEc:zna:indecs:v:22:y:2024:i:5:p:510-525
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    rule of law; WJP; economic growth; governance;
    All these keywords.

    JEL classification:

    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government
    • K00 - Law and Economics - - General - - - General (including Data Sources and Description)
    • O43 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Institutions and Growth
    • P48 - Political Economy and Comparative Economic Systems - - Other Economic Systems - - - Legal Institutions; Property Rights; Natural Resources; Energy; Environment; Regional Studies

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