Introduction
Legal failure is one of the major causes of economic crises in developing countries. This is because of the wrong attitudes in the society which are mainly caused by the failure of the legal system. This chapter discusses why the legal system fails on the basis of taxes, real estates, law, social contracts and political leadership.
Most third World countries have tried to improve their economic status. Most of them have not yet achieved remarkable development. This is because many avoid paying taxes and their legal systems fail them. The politics also, to a great extent, affect these results as they are close to the government. Unless a country has a legal system that considers and understands the psychological and social processes of a society, it cannot be able to build itself.
Main Body
The law makers should know the beliefs, intentions and desires of its people before formulating policies. This law is able to exploit the potential from the assets in the country. A suitable law is able to improve the economic status of a country.
Therefore, there should be an integration of all sectors of human being as they make these laws. The government should also improve on its judicial system so as to gain trust from the citizens. It is only if they trust the government that they can be able to enlarge their businesses to international levels without fear of losing. The US is known to have made it since it was able to lift its bell jar so that all the people were incorporated into a system that was suiting to them. This is what the Western government is trying to do so as to pull up the so left behind countries.
The implementation process has some steps that should follow. Firstly, the government has to identify the assets that are lying idle in its country and put into place strategies that will enable their exploitation. They should also consider the distribution of these assets especially in the geographical areas that are needy. Secondly, they should be able to know the actual value of the asset. This would guide them in planning. Thirdly, there should also be a common goal between the government and the interest of the society. The planners should also determine the cost of production.
Political and legal strategies are also important if development has to be achieved. The political system should capitalize on the poor with an aim of improving their livelihoods. This should include both government and other institutions that may be interested to invest together with the proposed project. The legal and extralegal sectors should also come together to be able to formulate rules that will enable ownership without difficulties and with justice. This would enhance efficient management of the industries. There should also be better options of living cheaper other than squatting.
Communication should also form a major part in the process of development. Transparency is important as it enhances trust by the citizens. The planners should not ignore the commercial strategies at their disposal. They should facilitate a good financial system including banking, insurance products, collection systems, good housing and infrastructure. There should also be clean water, sewerage and telecommunications, security and national identification systems. Good housing with basic facilities encourages the workers to increase their output and hence productivity. Each country has a way to put up the rules and regulations of the countries.
Operational strategy should also be a key aspect in implementation. This should focus on the workers so as to increase their output and efficiency. There should be investments in education and training of the working personnel and proper management. There should also be a reliable data on all the operations that are carried out within the company.
There is also a great need to have a property system that is accurate and efficient. A common standard in ownership enhances easy management. It brings convenience and satisfaction to the public when used consistently. Those of the developed nations such as Canada, United States, Japan and Europe have succeeded with good property systems. Economic freedom is therefore brought by putting economic rights into place.
Interest of the poor in law making is of great importance. For instance, Peru had laws that were not promoting the welfare of the poor. The leadership thought that the poor were the problem and not the law. They therefore scrapped off the laws of the poor. This brought suffering to the poor and slowed down the economic growth. The citizens then invested in the private sector. The problem that arose was that when these people acquired their wealth they had to use it in the way they wished to. This is a great lesson to reformers to always consider the consequences of their decisions.
Property system should be rooted in the social contract. This is because wealth is known to be created socially. In most of developing countries, people fall out with the law because of its failure to address their needs. This means that the laws should be supported by majority of the population. The support should be distributed in all areas including the villages. Corporate ownership is known to be more rewarding than local ownership. That is why international businesses that involve many people are able to make higher profits than the local ones.
Conclusion
However, capitalization is failing in the non Western countries. This is because it is only considered to belong to some people. As a fact, for all the citizens to enjoy the benefits of a country, a strong political system is needed. The political leaders are in a good position to affect majority of the people and bringing an influence in their country. Their effect can be build by initiating reforms and information of government policies. Leadership should consider three things. Firstly consider the poor, secondly, co-opt the elites and enhance a good and efficient legal system.