MARGARET Y.K. WOO

The favorite [American] exports seem to be the market economy and privatization, along with the rule of law.

Summer 2006 | Faculty Deliberations

Markets, Law and Globalization

By Margaret Y.K. Woo

HANDLE WITH CARE: this should be the prominent label on today's top American exports. No, they're not steel, wheat or supercomputers. The favorite exports seem to be the market economy and privatization, along with the rule of law. Yet, each of these exports must be transported with caution; in fact, they can interact and work at cross-purposes. Despite this country's touting of market principles and their resultant decentralization strategy, they're no panacea for international policy.

Take China, for example. Since embracing the market, China has enjoyed amazing economic boosts. The country's economy has grown at an enviable annual rate of about 9 percent. Yet, the broad application of market concepts has also resulted in serious domestic problems, from widening gaps between rich and poor to massive urban migration, widespread unemployment and growing unrest in both city and countryside.

Free markets and the resulting privatization strategy have extended from economics to the legal realm. In recent years, China has experimented with adopting many aspects of the adversarial system to supplement its inquisitorial, civil-law legal system. This has meant that law enforcement has taken on a more individualistic tone, increasing its reliance on the market in providing legal services and individual responsibility for the assertion of rights.

The result? An increasing number of individuals are using civil courts in seeking enforcement of their socio-economic rights. Yet, in only a few cases have Chinese citizens asserted legal claims against the Chinese state for broad-based changes. Instead, private individuals are seeking economic compensation or social benefits from other individuals. More problematic, however, is the maldistribution of legal services, both over China's vast geography and in needed legal specialties. While urban settings like Shanghai boast a sizable number of lawyers, they are a scarce commodity in rural areas. And since marriage and family cases are not as profitable as commercial cases, the marketplace of legal services has resulted in fewer lawyers going into family law.

This scenario is heightened with the United States' promotion of the adversarial system. Individual litigants asserting their rights may mean the development of greater rights consciousness, but it can present special problems for the disenfranchised. Without financial resources or legal knowledge, it's difficult for litigants to navigate the judicial system, understand how to obtain proof, or even know what proof is necessary. Such problems have already surfaced in divorce cases, where, according to Chinese lawyers, wealthier husbands command better settlements than divorcing wives.

In China's post-communist world, the combination of globalization, markets and the rule of law has meant decentralization rather than centralization, increasing emphasis on formality and legality over informality and policy, and individual responsibility over state obligations. Instead of abdicating responsibility to the market, US-style, what's needed is renewed attention on proper governance. Only then can markets and law appropriately interact to protect the rights of ordinary citizens.

Professor Margaret Y.K. Woo is an expert in civil procedure and comparative law. Her most recent publication, with coauthor Professor Stephen N. Subrin, is Litigating in America: Civil Procedure in Context.