ANLO

Neither the Role that is Indifferent nor is Overbroad: Ensuring Freedom of the People

Pseudonym: Anlo

I. Introduction - Development The World Bank acknowledged that the challenge of development is to encompass the entire gamut of change in a given social system. The bank affirms the complex and multidimensional nature of development in stating that:

The challenge of development is to improve the quality of life a better quality of life generally calls for higher incomes but it involves much more. It encompasses as ends in themselves better education, higher standards of health and nutrition, less poverty, a cleaner environment, more equality of opportunity, greater individual freedom, and a richer cultural life.1

The complex and multidimensional goals of development are approached in a revolutionary manner by Amartya Sen with his concepts of functionings and capabilities. His Capabilities

Approach to development argues that what matters the most for people is their capability to function. The concept of functionings reflects those tangible and intangible things that a person values doing. These valued things vary from simple ones like proper

nutrition and avoidance of disease to more complex ones like having

1

World Bank (1991). World Development Report, 1991. (Oxford University Press: New York) p. 4

Pseudonym: Anlo

self-respect and involvement in the community.2 Capabilities on the other hand refer to the freedom that a person has in terms of his choice of functionings, given his personal features (converting personal characteristics into functionings) and his command over commodities (availability of goods and services).3 It is thus appropriate that Sen titled one of his books as Development as Freedom.

Therefore, development can be seen both in its physical reality and as a state of mind, the former being that of real and tangible structures of development like buildings, roads, bridges, factories, etc. and the latter being that of the intangible but considered essentials for the enjoyment of the benefits of development. The two aspects of development have in them combinations of social, economic, and institutional processes having the end goals of, first, increasing the availability and widening the distribution of basic life-sustaining goods, second, raising the levels of living, and third, expanding the range of economic and social choices available.4

2 3

Sen (1999). Development as Freedom. (Alfred Knopf: New York) p. 75 Sen (1985). Commodities and Capabilities. (North Holland: Amsterdam) p. 10-11 4 Todaro (2003). Economic Development, 8th Ed. (Pearson Addison Wesley: Boston, Massachusetts) p. 22-23

Pseudonym: Anlo

According to Sens view, the third goal is a sine qua non requirement for national development, the third being replete with freedom issues. The absence of freedom contemplates the inability to choose due to oppressive forces of servitude and dependence. Therefore, the expansion of choices is a logical outcome of a development as freedom. In illustrating this point, Sen frequently used issues on discrimination especially gender biasness. One such

example is that of an illiterate woman who gives birth every year, with her illiteracy and its accompanying poor employability as the repressive forces. The increased availability of goods and general increase in the average level of living will hardly make a dent out of the poverty trap this woman is in. Freedom then from these forces of ignorance and human misery is the most viable answer to the attainment of development.

Granting that Sens espoused view is true, that freedom reflects development, it is thus incumbent that freedom should the key theme of any discussion on development, and when we talk of freedom, democracy and the rule of law are the things that usually first pop out

Pseudonym: Anlo

of our minds. The inescapable question now then is what role should the rule of law fill in this development as freedom process?

II. Setting the Stage: Development as Multidimensional The interplay between law and development is not a new thing; the ideology has been around for almost half-a-century already. The 1960s saw the rise of Law and Development (or more popularly known as Law and Economics) Movement. American development and legal scholars acknowledged that the rule of law plays an essential role in a countrys objective of development and Third World development saw the channeling of foreign aid into westernizing their legal and judicial systems. The movement had the guiding

assumption that law is an engine for social reform and lawyers and judges could serve as social engineers.5 Members of the bench and bar when learned about the discourse on development would advance reform efforts by bridging the gap between the law on the books and the law in action.6

Merryman (1977). Comparative Law and Social Change: On the Origins, Style, Decline & Revival of the Law and Development Movement." 25 The American Journal of Comparative Law 457. p. 458-459 6 Burg (1977). "Law and Development: A Review of the Literature and a Critique of 'Scholars in Self-Estrangement." 25 American Journal of Comparative Law 492. p. 495

Pseudonym: Anlo

At the first World Bank conference on Comprehensive Legal and Judicial Development, Sen discussed the importance of legal reform within the comprehensive development framework. He said that development has a strong association of meanings that makes a basic level of legality and judicial attainment a constitutive part of it.7 He emphasized the values of conceptual integrity vis--vis the causal interdependence between legal and other kinds of development. The difference between concepts and causes lies on the level of aggregation. There is a causal interdependence between economic, political, social, and legal developments that when summed up to form a whole, the aggregate formed is that of national development. The caveat of this aggregation is its reliance on the fidelity of the disaggregated developments to the conceptual integrity of national development.

Following the causal interrelation vis--vis conceptual integrity approach, the new framework for development strategies and programs now focuses on a holistic and integrated approach, which

Sen (2000). What is the Role of Legal and Judicial Reform in the Development Process? [Electronic Version]. Role of Legal and Judicial Reform in Development (World Bank Legal Conference, Washington, DC, 5 June 2000). < http://siteresources.worldbank.org/INTLA WJUSTINST/Resources/legalandjudicial.pdf>, p. 9

Pseudonym: Anlo

former World Bank president James Wolfensohn refers to as the highlight of the interdependence of all aspects social, structural, human, institutional, environmental, economic and financial.8

The interdependence of development issues can be seen in light of the situation in African Union countries. A forum in that continent tried to seek answers as to how can they address this issue. One output of that forum argues that the the culture of lack of, and disregard for the doctrine of the rule of law is pervasive in African Union countries. The result is weak development of rule of law contributes significantly to the endemic social and political instability in many African countries. In turn, this impacts negatively on social and political stability and progress.9

It is then clear that the rule of law is essential in this interdependent system for development. Looking back at Sens

example which portrays an illiterate woman, we can notice that even with an enactment of laws for equal opportunity employment she still
8 9

Todaro (2003), supra p. 110 Gutto (2002). The Rule of Law, Human and Peoples Rights and Compliance/NonCompliance with Regional and International Agreements and Standards by African States, [Electronic Version]. African Forum for Envisioning Africa, Nairobi, Kenya, 26 29 April 2002. (Centre for Applied Legal Studies, School of Law, University of the Witwatersrand: Johannesburg, South Africa) <http:// www.worldsummit2002.org/texts/ShadrackGutto2.pdf> p. 3

Pseudonym: Anlo

cannot compete fairly against those who are literate.

The

disaggregated developments will be not in fidelity to the conceptual framework of national development. Economic efficiency would not jive with the imposed rule and thus present a motivation for violation and law-breaking. This hammers the two prong approach of causal interrelation and conceptual integrity; each disaggregated

development having specific roles to play which would complement each other and mutually reinforce their fidelity to the conceptual integrity of national development. The path for this paper then is to present the rule of law in light of the current literature on its specific role on national development. The matter at hand is similar to

Goldilocks choice of porridge; one that is not too hot and is not too cold but is just right. This is a case of being just right in order to keep the rule of law on its role that is in fidelity to the conceptual integrity of development.

III. National Development and the Rule of Law It was in the year seventeen seventy-six when Adam Smith first published his monumental work on the political economy of the Industrial Revolution, his An Inquiry to the Nature and Causes of the

Pseudonym: Anlo

Wealth of Nations. In it he said that the natural effort of every individual to better his own condition, when suffered to exert itself with freedom and security, is so powerful a principle, that it is alone, and without any assistance, not only capable of carrying on the society to wealth and prosperity, but of surmounting a hundred impertinent obstructions; through the effect of these obstructions is always more or less either to encroach upon its freedom or to diminish its security.10 This emphasized the role the individual plays in the The Homo oeconomicus or the

pursuit of personal development.

Economic (Hu)Man thus have been established together with the view of actions that this economic animal would do in order to satisfy various wants and needs, actions which have been viewed as motivated by self-preservation and even darkly as motivated by greed. It is unfortunate that this world was created with limited, and at times, scarce resources. Add the various wants and needs of more than six billion human beings with further considerations of economic (i.e. availability of resources, purchasing power, etc.) and non-economic variables (catch all which includes social, political and legal factors), we now have a situation wherein sectors of humanity, more
1 10

Smith (1776). An Inquiry into the Nature and Causes of the Wealth of Nations, [Electronic Version]. Edited by S.M. Soares. (Metalibri Digital Library, 5th February 2007) Vol. II, book IV, chapter V, p.358.

Pseudonym: Anlo

specifically developing countries like the Philippines, are faced with the dichotomy of abundance and of scarcity. Poverty, inequality and underdevelopment have become an oppressive force which

undermines peoples lives and our emancipation from which is much clamored for. According to Smith, the duty of the sovereign, that of protecting, as far as possible, every member of the society from the injustice or oppression or the duty of establishing an exact administration of justice .11 Add to this Amartya Sens compelling argument that development is freedom, the freedom for life choices has thus exemplify what is true development given the fact that people have the full enjoyment of the benefits of a well-off life, of personal development and its aggregated form of national development.

As an illustration of the just how integrated things are, take the view of economic development. A nominal value of one million pesos would mean nothing if a country is suffering from hyperinflation with prices rising every hour. Similarly for legal

development, the same one million pesos would mean nothing if, say, it could be taken away arbitrarily, or stolen without impunity, or if an
1 11

Id. Vol. II, book V, chapter I, p. 709

10

Pseudonym: Anlo

opponent in a case in court is ready, willing and able to pay two million pesos to a judge who is also ready, willing and able to accept the bribe. The goal of the disaggregated developments having causal interrelations with each other is thus clear, that being the assurance that people enjoy the benefits of freedom. The question therefore is more on the roles for each that is faithful to the conceptual integrity of the framework of development.

A report by the World Bank on the Wealth of Nations explains that a nations wealth consists of natural capital, or all the natural resources of a country, produced capital, or the man-made resources of a country which includes machineries and the like, and lastly but consisting the largest share, intangible capital, which consists of an amalgam of human capital, governance, and other factors that are difficult to value explicitly.12 The significance of this acknowledgement is that since wealth can be made and derived from these intangible assets, development should also focus and include these, especially governance elements that boost the productivity of the economy. For example, if an economy has a very efficient judicial
1 12

The World Bank (2006), WHERE IS THE WEALTH OF NATIONS? Measuring Capital for the 21st Century. (The International Bank for Reconstruction and Development/The World Bank, Washington, DC)

11

Pseudonym: Anlo

system, clear property rights, and an effective government, the result will be a higher total wealth and thus an increase in the intangible capital residual.13 The impetus for investing on the development of these intangibles is even more for the Philippines considering that of the wealth per capita of nineteen thousand three hundred and fifty one dollars, fifteen thousand one hundred and twenty nine dollars of which are accountable to the intangible asset.14

A. What is the Rule of Law? The rule of law is an oft-cited legal argument but at the same time oddly escaping any definition. A taxonomic way to define it was posited in stating that the rule of law is a set of uniformly enforced, established legal regimes that clearly lay out the rules of the game.15 Being held up in loose terms, it would be better to leave it as is, without a precise or definite elucidation thus leaving room not for ambiguity but for flexibility. Due to this elusive nature of the term, it would be best to give a floating definition of the rule of law. Giving a strict definition of the rule of law will limit it within the terms it is
1 13 1 14

Id. p. 87 Id. p. 162 (derived from tables) 1 15 Upham, Mythmaking in the Rule of Law Orthodoxy. Working Paper No. 30, 2002. (Carnegie Endowment,Rule of Law Series: Democracy and the Rule of Law Project) <http:// www.carnegieendowment.org/files/wp30.pdf>

12

Pseudonym: Anlo

couched. This is similar to how 1934 Constitutional Commission delegate Jose Laurel rejected precise definition on the Bill of Rights precise definition might prove constricting and prevent the judiciary from adjusting it to the circumstances of particular cases and to the ever-changing conditions of society.16 It would be sufficient to understand the term in light of what the World Bank considers as the key components of the rule of law are a fair, impartial and accessible justice system and a representative government.17 It is better then to know it as the rules of the game as played through its parts, which are independent, efficient, and accessible justice system and representative government, which hereunto referred to as legal institutions, rather than rely on an idea popularly known but not elusive of definition.

B. Legal Institutions and Development This paper treats the rule of law as the workings of the entire gamut of legal institutions and vice versa, both being essentials to a healthy democracy. The triumph of western democratic economies
1 16

Cruz (2000). Constitutional Law, 2000 Ed. (Central Lawbook Publishing Co., Inc.: Quezon City, Philippines) p. 98-99 1 17 Morita and Zaelke (2006). Rule of Law, Good Governance and Sustainable Development. Presented at the Seventh International Conference on Environmental Compliance and Enforcement. < www.inece.org/conference/7/ vol1/05_Sachiko_Zaelke.pdf> p. 16

13

Pseudonym: Anlo

over the disillusioned Marxist-Maoist communist economies bolstered the belief that national development, especially in developing countries, should be engineered like the western model.18 The western model carries with it the various institutions, which include the legal. Beyond the intrinsic value of these institutions, the quality of the legal institution affects the economic development of a country.19 The

interdependent effects can be seen as Sens causal interrelation. However, there is an indication of a competing dichotomy arising from this quality; the State can be strong enough, on the one hand, to protect property rights, and on the other hand, to ease or even expropriate private property. Strong legal institutions would enhance the credibility of a government under normal circumstances, but during crisis situations, this will hamper efficiency and flexibility. In order to highlight this, take the example of an independent constitutional court, say the Supreme Court of the Philippines. Say that the Court encourages investments into the country by protecting private property against arbitrary takings by the executive branch. Conversely, when a country is faced by a crisis such a stance would

1 18 1 19

Todaro (2003), supra p. 124-125 Stephen (2007). Topic Brief: Economic Development and the Quality of Legal Institutions. (Department of Government and Law School, Harvard University) < http://siteresour ces.worldbank.org/INTLAWJUSTINST/Resources/LegalInstitutionsTopicBrief.pdf >

14

Pseudonym: Anlo

be detrimental to the efforts of the other branches of government to react against the crisis, thus showing the government as weak and indecisive thus unfavorable to business. Thus, the first issue of just right is timing on application of strength and strictness. However, is this contrary to the nature of the rule of law which calls for it to apply to all or no one? My answer to the question is in the negative, at least from the Philippine Constitutional perspective. The Constitution provides that No person shall be deprived of life, liberty or property without due process of law, nor shall any person be denied the equal protection of the laws.20 Fr. Bernas has this to say on the equal protection clause:

The equality guaranteed is not a disembodied equality. It does not deny to the state the power to recognize and act upon factual differences between individuals and classes. 21

Jurisprudence defines equal protection as similar treatment as to the rights conferred and responsibilities imposed to all persons or things similarly situated.22 Rather than running counter to the equal
2 20 2 21

Const. art. III, sec. 1 Bernas (2003). The 1987 Constitution of the Republic of the Philippines: A Commentary, 2003 Ed. (Rex Book Store, Inc.: Manila, Philippines) p. 136 2 22 Ichong v. Hernandez, 101 Phil. 1155

15

Pseudonym: Anlo

protection clause, the timing principle is actually supported by equal protection since the circumstances which pervades a specific time or the context it is within is the situation, and normal situations are quite obviously dissimilar to crisis situations, as long as the application is not with an evil eye and an uneven hand.23 In addition, the

guaranty of equal protection is dynamic to provide for more adjustability to the swiftly moving facts of our changing society.24 The task now then is to effectively determine the quality of legal institutions.

C. Relationship of Rule of Law Indicators and Development A World Bank study used six aggregate indicators representing six basic governance concepts namely (1) Voice and Accountability, (2) Political Instability and Violence, (3) Government Effectiveness, (4) Regulatory Burden, (5) Rule of Law and (6) Graft in order to determine the correlation of bad or good governance and economic growth in 150 countries. Indicators report subjective perception of respondents on the quality of each in their home country. The result

2 23 2 24

Yick Wong v. Hopkins, 118 US 356 Cruz (2000), supra p. 122

16

Pseudonym: Anlo

was evidencing a strong causal relationship that governance matters to better development outcomes.25

Another survey study correlating economic freedom and economic growth in 56 countries indicates that de jure judicial independence has no effect on economic growth while de facto judicial independence has positive effect on economic growth. 26 Judicial independence serves as a dummy for the degree freedom experienced by each country. The underlying assumption is that since an independent judiciary is essential for the rule of law, then it is a good indicator of the freedom that the rule of law ensures.

Critical Legal Studies (CLS) scholars are less optimistic regarding the impact of an independent justice system on the economy. The criticism being that doctrinal approaches to the rule of law are insufficient to fully document what is being measured, that being its role on national development.27 CLS considers the rule of
2 25

Kaufmann et al (1999). Governance Matters, [Electronic Version]. Policy Research Working Paper 2196. (The World Bank, Development Research Group, Macroeconomics and Growth and World Bank Institute Governance, Regulation and Finance: Washington DC) < http:// www.worldbank.org/wbi/governance/pdf/govmatrs.pdf> p. 18 2 26 Feld and Voigt (2002). Economic Growth and Judicial Independence: Cross Country Evidence Using a New Set of Indicators, [Electronic Version]. < http://siteresources.worldbank.o rg/INTLAWJUSTINST/Resources/ecogrowth.pdf> p. 25-26 2 27 Jensen and Heller (2003). Eds. Beyond Common Knowledge: Empirical Approaches to the Rule of Law. (Stanford University Press: Palo Alto, California) p. 1-2

17

Pseudonym: Anlo

law as riddled with political bias and is too ambitious resulting to a failure of what it promised to deliver. Immediate level outcomes are favored over the more ambitious results like that of developed world status. Court transparency and efficient docket management would be better in the long run with informal and alternative dispute resolution and an understanding of local legal culture and political economy than that of the legal formalisms judicial centric and doctrinal beliefs on the independence of judiciaries.28

In reconciling the rule of law approaches with the critique by CLS, it was posited that the rule of law orthodoxy should be complemented by legal empowerment alternatives.29 The

alternatives are defined as the use of legal services and related development activities to increase disadvantaged populations control over their lives.30 Sounds familiar, isnt it? The reason is that the argument is based on Amartya Sens Development as Freedom capabilities approach. They refer to it as Development lawyering31

2 28

Erik Jensen (2003). The Rule of Law and Judicial Reform: The Political Economy of Diverse Institutional Patterns and Reformers Responses, in Jensen and Heller, supra, p. 336 2 29 Golub and McQuay (2001). Legal Empowerment: Advancing Good Governance and Poverty Reduction, [Electronic Version]. (Law and Policy Reform, Asian Development Bank) <http://www.adb.org/Documents/Others/Law_ADB/lpr_2001.asp?p=lawdevt > p. 5 3 30 Id. p. 25 3 31 Id. p. 38

18

Pseudonym: Anlo

wherein the presence and availability of lawyers services on an as needed basis gives legal capacity to the people rather than having a monolithic courthouse which is closed to the legally illiterate, or in the words of a paper on the subject:

It is ironic, in fact, that some organizations that fund extensive research on legal systems or human rights conduct virtually none on the impact of their own laworiented programs. It can be far more rewarding to report anecdotal progress to the higher levels of an institutional hierarchy than it is to undertake the kinds of in-depth quantitative and qualitative inquiries that might contribute to learning and impact but might also yield negative results. Until such research is valued as contributing to progress even if it reveals problems, laworiented work will lag behind other development fields in terms of both sophistication and impact.32

IV. A Case for Philippine Development In 22 September 2004, President Arroyo issued Presidential Proclamation 713 Declaring September of every year as Rule of Law month and for the Department of Education to implement programs and activities in the observance thereof has one of its whereas that the rule of law ensures the orderly enjoyment by all persons of their rights and freedoms and secures the attainment of national
3 32

Id. p. 33

19

Pseudonym: Anlo

development, economic progress, and political stability.33

The

proclamation raises on the level of national policy the recognition that freedom and national development goes hand in hand, or in the words of Sen, Development as Freedom. Chapter 7 of the Medium Term Philippine Development Plan identifies the rule of law as a basic need. Again, there is recognition of the link between the rule of law and development. The plan has an Action Program for Judicial

Reform which contains a comprehensive set of reform projects for the enhancement of the governments performance for improved delivery of judicial services.34 The governments answer to the role of the rule of law therefore lies at all fours with the Law and Developments approach on the improving the quality of institutions and the accessibility of legal services.

In highlighting these institutions, I now return to the earlier issue on the judicial administration of the rule of law. I presented the timing principle and the essential difference between normal and crisis situations. Philippine jurisprudence has its share of judicial intervention in economic policy and planning. The cases of Manila
3 33 3 34

Proc. No. 713 (2004) NEDA (2004). Chapter 17 Basic Need: Rule of Law, [Electronic Version]. 2004 2010 Medium Term Philippine Development Plan. <http://www.neda.gov.ph>, p. 191

20

Pseudonym: Anlo

Prince Hotel v. Government Service and Insurance System,35 Garcia v. Board of Investments36 and JG Summit Holdings, Inc. v. Philyards Holdings, Inc.37 are decisions of the Supreme Court that have been heavily criticized by the business community as stumbling blocks to the development of a vigorous economy, and constituting unwarranted intervention in business.38 A short retelling relevant portion of these cases is in order. First, in the Manila Prince Hotel case, the historic Manila Hotel was placed on the bidding block with a foreign firm submitting the highest bid. The losing Filipino firm matched the highest bid afterwards but GSIS refused to accept the offer. From there, the Filipino firm filed a case to the Supreme Court and one of the grounds of the decision in favor of the petitioner is based on the Filipino First Policy,39 their bids being equal; the Filipino firm should have preference to win the bidding. Second, in the Garcia case, the Supreme Court stopped the BOI from approving the plans of a foreign firm to amend its registration as a petrochemical producer to change its plant site from Bataan to Batangas and the raw materials it will use
3 35 3 36

267 SCRA 402 (1997) 191 SCRA 288 (1990) 3 37 G.R. No. 124293, 20 November 2000 3 38 Ballesteros (2002). Judicial Intervention in the Philippines Too Much? 2 Arellano Law and Policy Review 28, p. 28 3 39 Const. art XII, sec. 10, par. 2 In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos. (emphasis added)

21

Pseudonym: Anlo

from Naphtha to Naphtha and/or LPG. In its decision, the Supreme Court cited article XII, section 1 of the Constitution 40 as basis as to why the plant should be put up in Bataan and aid in the industrialization of the Naphtha industry there. Lastly, in the JG

Summit case, the Supreme Court invalidated the governments sale of its shares on a shipyard to a consortium whose majority stake was owned by foreigners. The Court cited the sixty per centum Filipino equity provision of the Constitution41 and the repeal of PD 666, which states that shipyards are not public utilities,42 as basis for nullifying the sale.

I have nothing to say on whether the Supreme Court has the power to hear these cases since it has given its decision on the merits of these in the first place, and second is that it is a power given to it by the Constitution through the expanded judicial power clause.43
4 40

Const. art. XII, sec. 1, par. 2 The State shall promote industrialization (emphasis added) 4 41 Const. art XII, sec. 11 No franchise, certificate, or any other form of authorization for the operation of a public utility shall be granted except to citizens of the Philippines or to corporations or associations organized under the laws of the Philippines, at least sixty per centum of whose capital is owned by such citizens The participation of foreign investors in the governing body of any public utility enterprise shall be limited to their proportionate share in its capital, and all the executive and managing officers of such corporation or association must be citizens of the Philippines. (emphasis added) 4 42 Pres. Decree No. 666 (1975), sec. 1, par. d repealed Registration required but not as Public utility - the business of Constructing and Repairing vessels or parts thereof shall not be considered a public utility and no Certificate of Public Conveyance shall be required therefore (emphasis added) 4 43 Const. art VIII, sec. 1, par. 2

22

Pseudonym: Anlo

According to Fr. Bernas, the use of the word includes means that power was not an exhaustive listing and the additional clause gives the courts power to determine grave abuse of discretion by the other branches of government.44 Given that government instrumentalities were party-in-interest on the cited cases above (namely GSIS, BOI, and the Asset Privatization Trust), the Supreme Court has the Constitutional mandate to determine, and they have determined that these government instrumentalities committed grave abuses of their discretion.

In defense of these economic tightrope decisions of the Supreme Court, Ballesteros (2002) said that the Supreme Court was only doing its constitutional duty faced with a legal question, the Court is duty bound to act, notwithstanding the effect it may have on the economic policies of the government.45 He further adds that real contributions to the economic growth and general welfare of the country and the regulation of foreign investments in accordance with the national goals and priorities are too explicit not to be noticed and
Judicial power includes the duty of the courts of justice to settle actual controversies involving rights which are legally demandable and enforceable, and to determine whether or not there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. (emphasis added) 4 44 Bernas (2003), supra p. 919 4 45 Ballesteros (2002), supra p. 42

23

Pseudonym: Anlo

understood.

Hence, the protection of free enterprise must be

understood to be in context of the promotion of the national interest.46 On the economic side of the argument, these and similar decisions in the future may give a chilling effect on the entry of investments to the country. However, business is essentially a risktaking venture. Investors will still enter the country given their urge for profits while the country remains hospitable for investments.47

The interpretation of the Constitution cannot even be more apparent than what its drafters intended to be Constitutional Norms of our State, which is a hodge-podge of market-based models and increased State participation in the economy. 48 If this norm is

defined as its role in ensuring freedom of choice, the Rule of Law as a Law and Economic choice has three possible paths to follow depending on which legal institution it utilizes. First is as a direct judicial enforcement of the norms which is more perceptible under the expanded power of judicial review granted by the Constitution.49

4 46 4 47

Id. p. 43 Id. p. 34 4 48 Pangalangan (2003). Law and Economic Choice in Philippine Constitutional Law in Law, Development and Socio-Economic Changes in Asia. Naoyuki Sakumoto et al., editors. (Institute of Developing Economies, External Trade Organization: Japan). p. 143 4 49 Id., p. 159

24

Pseudonym: Anlo

Second is through political and democratic processes.50

An

illustration is the ponencia by then Justice Panganiban denying the challenges against the Philippine ratification of the WTO agreement. In disposing the case he said that [trade liberalization and economic globalization] is a matter that our people should determine in electing their policy makers Let the people, through their duly authorized officers, make their free choice.51 Lastly is through power of private initiative in determining market forces,52 which presupposes that the freedom of choice is there and hence there is little or no State interest in infringing certain rights in order to promote the stated norms. These three therefore can be seen as available avenues for the fulfillment of the role the Rule of Law has to play to be permissibly applied for and against differing rights and freedoms depending on the context of purpose and means. The dynamic is best seen under the debate of Popular Constitutionalism on one hand and CounterMajoritarian theory on the other. Since these would be a new field altogether, suffice it for me to state that there are three paths or approaches available for the Rule of Law precisely because one or two of these can be compromised and the utilization of the remaining
5 50 5 51 5 52

Id., p. 162 Taada v. Angara, 272 SCRA 18 (1997). Pangalangan (2003), supra p. 163

25

Pseudonym: Anlo

other is the only viable way for the administration of justice. An illustration would be on fringed groups or minorities who do not have a voice in popular representation. Counter-marjoritarianism, or Judicial activism, is what is left available for their protection against excesses of legislation and/or against their inability to participate in market choices. In ensuring freedom through these paths, the Rule of Law and the Legal Institutions can truly partake in the complex and multi-dimensional world of development.

V. The Role of the Rule Concluding Remarks This case is decided upon an economic theory [whether or not I agree] with that theory has nothing to do with the right of the majority to embody their opinion in law [A] constitution is not intended to embody a particular economic theory, whether of paternalism or of laissez faire. It is made for people of fundamentally differing views, and the accident of our finding certain opinion natural and familiar or novel, and even shocking ought not to conclude our judgment upon the question whether the statutes embodying them conflict with the constitution.53 What Justice Holmes said more than a hundred years ago is still applicable today. Economic theories are good per se but these do not encompass development as a whole. The Rule of Law must not be
5 53

Holmes, J., dissenting, in Lochner v. New York, 198 U.S. 47 (1905).

26

Pseudonym: Anlo

blinded in determining its role. It must acknowledge not only the complexity of development but that the Rule of Law itself is a complex set comprising the gamut of legal institutions. Amartya

Sens capabilities approach to development trumpets development as freedom, and freedom is the by-product of the rule of law. People are free to do their wants within the confines of law and society. The challenge now is the elevation of freedom not as a by-product but as a partner a Law and Freedom approach. As what the studies have shown, legal reform advances freedom, and freedom is what Sen considers as the crucial and constitutive quality of comprehensive development. Legal reform is thus important on its own; its cause need not be indirectly established through its contribution to economic development. Legal reform is, however, also causally interconnected with other constitutive elements of comprehensive development. A sound legal system is necessary to advance political and economic development. The matter is thus complex. In the fulfillment of this pronounced role of the Rule of Law, it is in accordance with the national interest that the issue be settled with that of national development and the causal interdependence vis--vis conceptual integrity dichotomy of development. An elaboration on the issue of

27

Pseudonym: Anlo

judicial intervention, wherein the courts speak as agents for the rule of law, is needed from the view of the non-legal disaggregated developments. Thus, there is the availability of three paths in the fulfillment of the role depending on the context and level of development. It is thus not a far-fetch assumption that within the plurality of concerns to the new understanding of the framework for development, the rule of law has a specific purpose to serve and that is, to ensure freedom.

28

Pseudonym: Anlo

Bibliography Jurisprudence Ichong v. Hernandez, 101 Phil. 1155 Garcia v. Board of Investments, 191 SCRA 288 (1990) JG Summit Holdings, Inc. v. Philyards Holdings, Inc., G.R. No. 124293, 20 November 2000 Lochner v. New York, 198 U.S. 47 (1905) Manila Prince Hotel v. Government Service Insurance System, 267 SCRA 402 (1997) Taada v. Angara, 272 SCRA 18 (1997) Statutory Materials Const. art. III, sec. 1 Const. art. VIII, sec. 1, par. 2 Const. art. XII, sec. 10, par. 2 Const. art. XII, sec. 1, par. 2 Const. art. XII, sec. 10, par. 1 Proc. No. 713 (2004) Pres. Decree No. 666 (1975), sec. 1, par. d repealed Books Joaquin Bernas, SJ (2003). The 1987 Constitution of the Republic of the Philippines: A Commentary, 2003 Ed. Rex Book Store, Inc.: Manila, Philippines.

29

Pseudonym: Anlo

Isagani Cruz (2000). Constitutional Law, 2000 Ed. Central Lawbook Publishing Co., Inc.: Quezon City, Philippines. Erik Jensen and Thomas Heller (2003), Eds. Beyond Common Knowledge: Empirical Approaches to the Rule of Law. Stanford University Press: Palo Alto, California. Amartya Sen (1985). Commodities and Capabilities. North Holland: Amsterdam. Amartya Sen (1999). Development as Freedom. Alfred Knopf: New York. Adam Smith (1776). An Inquiry into the Nature and Causes of the Wealth of Nations, [Electronic Version]. Edited by S.M. Soares. Metalibri Digital Library, 5th February 2007. Michael Todaro and Stephen Smith (2003). Economic Development, 8th Ed. Pearson Addison Wesley: Boston, Massachusetts. Raul Pangalangan (2003). Law and Economic Choice in Philippine Constitutional Law in Law, Development and Socio-Economic Changes in Asia. Naoyuki Sakumoto et al., editors. Institute of Developing Economies, External Trade Organization: Japan. World Bank (1991). World Development Report, 1991. Oxford University Press: New York. World Bank (2006). Where is the Wealth of Nations: Measuring Capital for the 21st Century, [Electronic Version]. International Bank for International Reconstruction and Development / World Bank: Washington DC. Law Periodical Articles Elliot Burg (1977). "Law and Development: A Review of the Literature and a Critique of 'Scholars in Self-Estrangement." 25 American Journal of Comparative Law 492.

30

Pseudonym: Anlo

David Ballesteros (2002). Judicial Intervention in the Philippines Too Much? 2 Arellano Law and Policy Review 28. Merryman, John. H. (1977). Comparative Law and Social Change: On the Origins, Style, Decline & Revival of the Law and Development Movement." 25 The American Journal of Comparative Law 457 Journal Articles Daniel Kaufmann, Aart Kraay, and Pablo Zoido-Lobatn (1999). Governance Matters, [Electronic Version]. Policy Research Working Paper 2196. The World Bank, Development Research Group, Macroeconomics and Growth and World Bank Institute Governance, Regulation and Finance: Washington DC. < http:// www.worldbank.org/wbi/governance/pdf/govmatrs.pdf> Lars Feld and Stefan Voigt (2002). Economic Growth and Judicial Independence: Cross Country Evidence Using a New Set of Indicators, [Electronic Version]. < http://siteresources.worldba nk.org/INTLAWJUSTINST/Resources/ecogrowth.pdf> Speech/es Amartya Sen (2000). What is the Role of Legal and Judicial Reform in the Development Process? [Electronic Version]. Role of Legal and Judicial Reform in Development, World Bank Legal Conference, Washington, DC, 5 June 2000. < http://siteresource s.worldbank.org/INTLAWJUSTINST/Resources/legalandjudici al.pdf> Online Sources Stephen Golub and Kim McQuay (2001). Legal Empowerment: Advancing Good Governance and Poverty Reduction. Law and Policy Reform. Asian Development Bank. <http://www.adb .org/Documents/Others/Law_ADB/lpr_2001.asp?p=lawdevt >

31

Pseudonym: Anlo

Shadrack B.O. Gutto (2002). The Rule of Law, Human and Peoples Rights and Compliance/Non-Compliance with Regional and International Agreements and Standards by African States, [Electronic Version]. African Forum for Envisioning Africa, Nairobi, Kenya, 26 29 April 2002. Centre for Applied Legal Studies, School of Law, University of the Witwatersrand: Johannesburg, South Africa. <http://www.worldsummit2002.or g/texts/ShadrackGutto2.pdf> NEDA (2004). Chapter 17 Basic Need: Rule of Law, [Electronic Version]. 2004 2010 Medium Term Philippine Development Plan. <http://www.neda.gov.ph> Sachiko Morita and Durwood Zaelke (2006). Rule of Law, Good Governance and Sustainable Development. Presented at the Seventh International Conference on Environmental Compliance and Enforcement. < www.inece.org/conference/7/ vol1/05_Sachiko_Zaelke.pdf> Matthew Stephenson (2007). Topic Brief: Economic Development and the Quality of Legal Institutions. Department of Government and Law School, Harvard University. < http://siter esources.worldbank.org/INTLAWJUSTINST/Resources/LegalI nstitutionsTopicBrief.pdf > Frank Upham, Mythmaking in the Rule of Law Orthodoxy. Working Paper No. 30, 2002. Carnegie Endowment, Rule of Law Series: Democracy and the Rule of Law Project. <http:// www.carnegieendowment.org/files/wp30.pdf>

32