The Imperial Presidency

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MajorityLeader.gov:

 

Implications for Economic Growth & Job Creation

 

Over the past several months opinion pieces appearing in such places as The Washington Post, National Review, and The Wall Street Journal have talked about the emergence of an “Imperial Presidency.” While some may wish to simply chalk this up to partisan criticism of the incumbent President, even The New York Times in a recent A1 article examined “an increasingly deliberate pattern by the administration to circumvent lawmakers…”

 

Less noticed, but perhaps even more important – especially to the over 20 million Americans currently out of work or underemployed – is the link between a breakdown in the rule of law and reduced economic growth and individual prosperity.

 

Property rights and rule of law are essential for the proper and efficient functioning of society and the economy. Unambiguous laws and procedures provide a framework by which free people agree on the scope and reach of their government's actions, whereas unclear laws or arbitrary enforcement undermine individual liberty and the notion of popular sovereignty. Clear, transparent, predictable rules that are applied without preference or prejudice allow individuals to invest, build businesses, and create jobs. When there is a breakdown in the rule of law, increased uncertainty leads to reduced investment and less growth.

 

Numerous economic studies have documented the relationship between a strong rule of law and economic growth. In 2008, The Economist published the following chart alongside a story entitled “Order in the Jungle.” The chart aptly illustrates the strong relationship between adherence to the rule of law and economic growth. As economist Hernando de Soto – a leader in the field of the impact of property rights and rule of law on economic growth succinctly stated: “So the origin of the rule of law— which will allow a modern nation to grow and so bring peace, stability, and prosperity to the world—is property rights. And the rule of law will actually generate prosperity.”