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ABSTRACT:
The debate about rules versus standards that is precise versus vague norms is related to developing countries. Precise legal norms have high specification costs and low administrative costs. A legal system which is based on rules is more centralised if it is based on rules rather than standards. In countries with low endowment of human capital in general and especially in the judiciary and civil service the legal systems should be more centralised by concentrating the best educated lawyers in the process of rule-making, which gives less discretionary power to the judiciary and makes their decisions easier. Less discretionary power also reduces corruption, as wilful decisions are easier to observe and to verify if they are based on clear rules rather than on standards, for which subtle and debatable arguments have to be used to arrive at decisions. |
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