This paper assesses Pan Wei's proposal for a 'consultative rule of law system' for China, finding it a potentially important step along the path of political reform. China urgently needs political reform to deal with the rapidly mounting problems of corruption, abuse of power, financial scandals, rising crime and inequality, and declining legitimacy of the Chinese Communist Party. A rule of law, with an independent judiciary and other autonomous institutions of horizontal accountability, is vital if China is to rein in these problems and deliver better, fairer, more transparent and effective governance. However, Pan Wei's proposed system goes only part of the way toward addressing the deficiencies of governance in China, and is therefore best viewed as a transitional framework. To work, horizontal accountability must be supplemented with and reinforced by vertical account ability, through competitive elections, which give local officials an incentive to serve the public good and enable bad officials to be removed by the people. Ultimately, I argue, China can only achieve adequate and enduring political accountability by moving toward democracy. Among the other issues addressed in the paper are the architecture and appointment of a system of horizontal accountability for China; the role of the Communist Party (or its successor hegemon) in a 'rule of law' system; and the timing and phasing of the transition to a rule of law.

Reprinted in Suisheng Zhao, ed., Debating Political Reform in China: Rule of Law vs. Democratization, 2006.

We provide new measures of ethnic, linguistic and religious fractionalization for about 190 countries. These measures are more comprehensive than those previously used in the economics literaturer and we compare our new variables with those previously used. We also revisit the question of the effects of ethnic, linguistic and religious heterogeneity on the quality of institutions and growth.

When Terry Karl and I were searching for the most generic definition of “modern representative political democracy,” we hit upon the concept of accountability. We wanted a definition that was not dependent upon a specific institution or set of institutions, that was not uniquely liberal or excessively defensive in its presumptions, that was neither exclusively procedural nor substantive in its content, and that could travel well across world cultural regions. None of those in widespread use in the burgeoning literature on democratization fit our, admittedly demanding, bill of particulars, especially not the so-called Schumpeterian definition or the many versions derived from it. All of these focused too single-mindedly on the regular conduct of elections that (allegedly) offered citizens a choice between alternative set of rulers (with no attention to the relations of citizens and rulers leading up to the holding of such presumably “free and fair” elections or to those prevailing after such episodic events). Indeed, many of the more theoretically inclined scholars who relied on such a definition seemed embarrassed in doing so and excused themselves by arguing that, even though elections are not the only manifestation of democracy, they were easy to measure (even to dichotomize!) and/or that alternative, so-called substantive definitions of “it” were subject to partisan manipulation. Terry and I were all too aware that some accountability; indeed, it gives them greater legitimacy when they have to act against immediate popular opinion.

On 15-16 November 2002, the Center for Democracy, Development, and the Rule of Law of the Institute for International Studies at Stanford University sponsored a workshop in Stanford, CA on "Regime Transitions from Communist Rule in Comparative Perspective." Over 40 individuals attended the workshop, including many notable American and international scholars. The six individual sessions of the workshop examined a variety of issues: the transitions model two decades later; whether transitions from communist rule are distinctive; theoretical perspectives seeking to explain the variation in outcome among post-communist regimes; and regional perspectives examining the variation in outcome in Central and Eastern Europe, the Slavic Region, the Balkans, the Caucasus, and Central Asia. The workshop also sought to determine whether there is a compelling intellectual rationale for a larger scale, multi-year project on transitions from communism or if the workshop itself represented the capstone event.

The workshop was organized by Larry Diamond, Senior Fellow at the Hoover Institution, Michael McFaul, Hoover Institution and Political Science, and Gail Lapidus, Senior Fellow at the Institute for International Studies. Workshop participants included scholars at many of the leading political science and government departments in the United States, as well as scholars associated with international academic institutions, governments, and development organizations. This report summarizes the presentations given as part of the workshop, and the discussion that followed. Every effort has been made to portray accurately the range of opinions expressed; however, space and organizational considerations resulted in omissions and paraphrasing. Kathryn Ducceschi, who served as a rapporteur during the meeting with John Cieslewicz, authored this document, and the workshop organizers served as editors.

Any errors in fact or interpretation should be attributed to the author and the editors.

From the wild swings of the stock market to the online auctions of eBay to the unexpected twists of the world's post-Communist economies, markets have suddenly become quite visible. We now have occasion to ask, "What makes these institutions work? How important are they? How can we improve them?"

Taking us on a lively tour of a world we once took for granted, John McMillan offers examples ranging from a camel trading fair in India to the $20 million per day Aalsmeer flower market in the Netherlands to the global trade in AIDS drugs. Eschewing ideology, he shows us that markets are neither magical nor immoral. Rather, they are powerful if imperfect tools, the best we've found for improving our living standards. A New York Times Notable Book. W. W. Norton & Company

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Our hearing today is also intended to look at the current United States-Russia relationship. However, the hearing is also designed to review the current political environmental in Russia and to assess the status of Russia's transition to democracy.

In a July 2001 Brookings Institution Policy Brief, Tom Bjorkman wrote that,

''President Putin has spoken repeatedly about his commitment to democracy as the only way forward for Russia.''

But Bjorkman went on to observe that,

''There is also a serious threat of a more resolute authoritarianism in the course that Putin has set.''

In a Los Angeles Times editorial just last week, Dr. McFaul, one of our witnesses, suggested that, ''there were clear signs that Russia is backing away from democracy.'' The article pointed out that Putin's government has seized control of Russia's last independent national television networks, silenced or changed editorial teams at several newspapers, continued to harass human rights activists, has created state-sponsored civil society organizations and has launched criminal investigations against corporation executives who have opposed him or who have contributed to opposition political parties.

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The international law rules governing "indirect" expropriations of property reveals a tension between the interest, on one hand, of protecting rights of foreign property owners and investors and, on the other hand, the interest of protecting the sovereign authority of states to regulate in further of public welfare goals. The tension is embodied in the formal doctrine. Thus, a state is responsible under international law for regulation that unreasonably interferes with the foreign owner's enjoyment of his or her property. At the same time, however, the doctrine recognizes that regulation "commonly accepted as within the police power of states" does not give rise to liability for a regulatory taking.

International courts and tribunals are reluctant explicitly to substitute their judgment for that of sovereign state parties before them with regard to the legitimacy of or justification for the particular police power goals those states have decided to pursue through a given regulatory measure. This results in artificially truncated approaches to indirect expropriation cases. In some cases, tribunals focus only on the effect of a regulatory measure on the owner, without regard to the state's purpose. More recent developments in state practice suggest that whenever a state claims a public welfare purpose for regulation, it will not constitute an indirect expropriation of property.

Nevertheless, implicit in the decisions of international tribunals and the practice of states in negotiating property claims settlements is a normative assessment of the legitimacy of the particular police power or public welfare purposes to be served by a particular regulatory measure. These implicit assessments have been keyed not to the socio-political standards of the state adopting the regulation, but to international standards. As such, the question of whether a regulatory measure constitutes an indirect expropriation under international law will depend in part on the extent of international acceptance of the particular substantive public welfare purposes a regulatory measure seeks to advance. Future scholarship should evaluate decisions of international tribunals and state practice to develop clearer and more explicit guidelines on the question of which classes or categories of regulatory purposes are accepted by both developed and developing states as requiring property owners to bear the costs or regulation, and which require the state to provide compensation.

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Who is Vladimir Putin?

Since the rise to power in Russia of this obscure bureaucrat and former KGB agent in the fall of 1999, two groups in the West have answered this question very differently.

For some bankers, investors and diplomats, Russian President Vladimir Putin was a godsend. On his watch, Russia's 1998 devaluation and rising oil prices began to fuel economic growth for the first time since the collapse of the Soviet Union. If not personally responsible for the turnaround, Mr. Putin did initiate reforms designed to sustain it over the long haul. He replaced the personal income tax with a 13% flat tax, cut corporate taxes, balanced the budget, paid foreign debts, legalized land ownership, supported the restructuring of the big monopolies, and even began to tackle sensitive social services reforms. Compared with the last years of Boris Yeltsin, Mr. Putin looked like a dedicated proponent of capitalism.

In parallel to this storyline of Vladimir Putin as hero, a more sinister subplot emerged. As liberal tax reforms sailed through the Russian parliament, Mr. Putin's team was implementing illiberal political changes. During the Putin era, all national television networks effectively came back under the state control. The closing of TVS last month was the final blow. Russian soldiers have continued to abuse the human rights of Russian citizens living in Chechnya. (To be sure, Chechen fighters have practiced similar inhumane tactics, but two wrongs don't make a right.) Human rights organizations have been harassed, journalists imprisoned, and Western aid workers thrown out of the country. Of course, Mr. Putin personally rarely intervened in these rollbacks of democracy. But that's the point: he did nothing to stop these obvious steps toward authoritarian rule.

These two Vladimir Putins -- economic reformer and democratic backslider -- have lived side-by-side without meeting. Business people brushed aside the crackdown on the media as a necessary response to the anarchy unleashed during the Yeltsin era. The apologists claim Vladimir Gusinsky and Boris Berezovsky, the two media magnates who were forced to flee the country to avoid jail, got what they deserved: Mr. Putin wasn't suppressing freedom of the press, only limiting the power of corrupt oligarchs. Some bold voices in the business community even championed interim dictatorship in Russia as the only way to provide the stability for investment and economic growth.

For their part, critics of Mr. Putin's anti-democratic policies undermined the punch of their analysis by exaggerating the Russian president's ruthlessness and failing to recognize his accomplishments in other sphere. They cast Mr. Putin as a new dictator who has more in common with Stalin than Boris Yeltsin or Mikhail Gorbachev.

Last week, the arrest of billionaire Platon Lebedev brought the two Vladimir Putins together. Mr. Lebedev runs Menatep, the bank for the Yukos financial-industrial group headed by Mikhail Khodorkovsky, Russia's richest man. Like Mr. Lebedev and others in the Yukos-Menatep organization, he made his fortune by using personal relationships with government bureaucrats to acquire state assets -- in this case, oil and mineral companies -- for a song.

When Mr. Putin first came to power, many billionaires worried the new Russian president would redistribute property rights once again, this time to a new set of cronies. Instead, Mr. Putin implicitly offered the oligarchs a deal: you keep what you had before as long you run your companies without looking for government handouts and get out of politics.

Unlike Vladimir Gusinsky or Boris Berezovsky, Mr. Khodorkovsky eagerly accepted this bargain. He and his team kept out of jail and built Yukos into one of Russia's most profitable, most transparent, and most Westernized companies. He grew to be first among equals among Russia's other oligarchs. He also began to operate differently than the rest, establishing his own foundations, charitable causes, and think tanks. In this election year, he also openly donated money to two of Russia's largest political parties, Yabloko and the Communists. Mr. Khodorkovsky calculated that all this fell within the bounds of the implicit pact between the Putin administration and the oligarchs.

Last week's arrest, and the police questioning of Mr. Khodorkovsky, suggest that the Russian president interprets the pact differently. Mr. Khodorkovsky's economic power and political ambitions threatened Mr. Putin. So the president changed the rules of the game. Economic deals of the past once thought to be beyond scrutiny are now suddenly in question. If there are now new rules, then the alleged claim against Mr. Lebedev -- that he illegally acquired assets in the 1994 privatization of the Apatit fertilizer company -- or similar ones, could be leveled against nearly every businessman who operated in Russia since the early 1990s.

If these new informal rules are being remade to scare Mr. Khodorkovsky away from politics, then the arrest of Platon Lebedev is even more sobering. It means that Russians are not allowed to try to influence electoral outcomes -- an essential feature of even the most minimal democracy. Of course, oil tycoons should not be allowed to deploy their financial resources to skew the electoral playing field. But the enforcement of campaign finance laws is the tool that most democracies use to address this problem, not random arrest.

Arbitrary rule by the state is not only undemocratic. It's bad for business. A state that isn't constrained by checks and balances, the rule of law, the scrutiny of an independent media, or the will of the voters is unpredictable at best, predatory at worst. Two weeks ago, Mr. Lebedev probably would have argued that President Putin's economic accomplishments outweighed its democratic failures. Today, he probably has a different view. So should the rest of us.