Inducing independence: A strategic model of World Bank assistance and legal reform

Legal reforms matter for economic growth and democratic consolidation. As part of the "second-generation reforms", international financial institutions have sought to build the rule of law by funding a vast array of legal and judicial reform projects throughout the developing world. Yet aside from scattered anecdotal evidence, the general effects of international assistance on legal reform and the rule of law remain poorly understood. This article addresses this gap by developing a theoretical framework that explores the strategic interaction among international financial institutions, national governments and non-governmental actors. Using original data on World Bank legal and judicial reform projects, we show that World Bank assistance can in fact encourage some types of incumbent governments to promote reforms that increase judicial independence.