In a globally competitive world, competition is key. Fundamental for competition is the rule of law, according to Myron Brilliant, Senior Vice President for International Affairs of the U.S. Chamber of Commerce, who spoke at a recent Heritage Foundation event.
In his remarks, which elaborated on a chapter he contributed to The Heritage Foundation’s 2013 Index of Economic Freedom, Mr. Brilliant argued the importance for the rule of law on five specific factors: transparency, predictability, stability, accountability, and due process. These must be present to enable the long-term investment essential for any nation’s economic growth and prosperity. According to Mr. Brilliant:
Societies that have stable, predictable, and transparent institutions enjoy investor confidence and economic growth. Conversely, those with weak institutions and processes tend to experience delayed socioeconomic development and political instability; pay high risk premiums for investments; and suffer through volatility in prices, supply, and employment.
There is no denying that companies and investors are going global. Businesses want to invest in countries that are not prone to unpredictable changes in laws and policies. When companies are deciding where to expand their operation, the rule of law is one of the most critical factors.
Highlighting the importance of a strong and effective rule of law, Mr. Brilliant made a case that companies looking to invest in foreign markets also need to be a voice of change, advocating for better governance and improvements in the rule of law worldwide.
For more on Mr. Brilliant’s speech examining why the rule of law is critical to business and investment decisions, please visit here.
Drew Ringley is currently a member of the Young Leaders Program at The Heritage Foundation. For more information on interning at Heritage, please click here.
