ISAS Working Papers

In attaining higher gross domestic product growth rates, legal reforms are now recognised as a critical ingredient. The Indian legal infrastructure needed reforms in any case, even if the post-1991 cycle of economic reforms had not occurred. However, liberalisation has provided an additional trigger. The word “law” has various interpretations. Consequently, the expression legal reform also needs to be pinned down. There are three layers in legal reform. First, there is an element of statutory law reform and there are three clear elements to statutory law reform – weeding out old and dysfunctional elements in legislation, unification and harmonization, and reducing state intervention. Second, legal reform has to have an administrative law reform component, meaning the subordinate legislation in the form of rules, orders, regulations and instructions from ministries and government departments. Often, constraints to efficient decision-making come about through administrative law rather than through statutory law and bribery and rent-seeking are fallouts. Finally, the third element of legal reform is what may be called judicial reforms, though faster dispute resolution and contract enforcement are not exclusively judicial issues.