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Introduction

Development is a cyclical process shifting from developing to developed

nations and back again over time. The process however has become more complex

and more structured with each stage of human development. Currently the process of

development does not embrace the transition from hunter-gatherer to agrarian society

but the global spread of methods and means of governance. This global governance

structure is developed at the nation-state level as well as supranational level. One

area of interest in the development of this global governance structure is the

transnational spread of both constitutional judicial review and independent regulators.

These two forms of accountability, stability and independence within governments

lend themselves to further analysis with regards to the similarities and differences in

their essential nature.

The most appropriate means by which to conduct this analysis is to discuss in

the first instance the nature and development of both constitutional judicial review

and independent regulators individually and then to use that foundation to compare

and contrast the spread of these two forms of governance. The paper will begin by

discussing the development of constitutional judicial review and comparing the two

prevalent models of constitutional review, American and Kelsenian. The discussion

will then focus on specific case studies concerning the development of constitutional

judicial review with a focus on Egypt and the Asian Cases (Taiwan, Mongolia, and

Korea). The discussion will then shift to look at the development of independent

regulators within governments to look at the rationale behind the formation of these

semi-independent actors and the sectors in which these actors play a dominant role.

The focus on independent regulators will also discuss the current trend for

supranational independent regulators through the guise of international trade

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agreements to bring about a more universal system to benefit the progress of

development in this globalizing world. Finally the nature of the spread of both

constitutional judicial review and independent regulators will be compared and

contrasted to identify characteristics of each mode of governance that overlap and

aide in a better understanding of global development across both developed and

developing nations.

Constitutional Judicial Review

Historical Background

Judicial review as a process has been the development of a desire to maintain a

check on the power of the government in order to prevent the will of the people being

perverted by the government in power. This check however is, was, and still remains

a novel feature of democratic and sometimes non-democratic governments1. The

origins of judicial review stem from the English tradition of Parliamentary Supremacy

which was thought to be the voice of the people through elected representatives.

However after World War II the re-builders of Western Europe found that there was a

need for a check on the power of the legislature (Ginsburg 2003). Therefore the idea

of constitutionalism took hold and spread from the example of the United States of

America. This spread included the principle of separation of powers and a desire to

have a legislature which was not able to remain supreme above other branches of the

government. However, the development of constitutionalism and especially the

power of constitutional judicial review was split into two camps. The two competing

1
Author’s Note: This reference is to the case study of Egypt which developed a constitutional court in
response to the economic difficulties suffered by the country after nationalization of private industry,
which will be discussed later in the paper.
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ideas are the American model of judicial review with the development of Kelsen

Courts (Stone Sweet 2002).

The Competing Models of Constitutional Judicial Review

The two forms of judicial review advanced during the post World War II

spread of new democracies in Western Europe and Asia were the American model

and the Kelsen Court. The American model was based on the historical development

of the separation of powers principle in the United States Constitution and advanced a

system in which the Supreme Court (United States Supreme Court) was a co-equal

branch with the government and was involved not only in disputes as to the

constitutionality of acts of the executive and legislative branches but also dealt with

matters involving actual litigants in federal level disputes. The American model is

based on the principle that there must be a ‘case or controversy’ which means an

actual concrete legal challenge to address the constitutionality of a piece of

legislation. This is the opposite of some Kelsen Courts which will hear matters in the

abstract and make a constitutional determination at that time2. Furthermore the

United State Supreme Court has the ability to hear many cases and is not a separate

court that only hears constitutional matters while another judiciary is used for federal

cases. The American model though quite successful in the United States has been

adopted on a limited basis in new democracies; this is especially the case in Western

Europe.

The Kelsen Court, named after Hans Kelsen3, was structured around four

components which were: (1) Constitutional courts enjoy exclusive and final

jurisdiction; (2) Constitutional courts hear only matters concerning the constitution;

(3) Constitutional courts have links with but are separate from the legislature and the

2
An example of an abstract court would be the constitutional court of France.
3
Developed European constitutional review.
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judiciary; and (4) Constitutional court may review legislation in question in the

abstract without waiting for the bill to become law (Stone Sweet 2002). This

structure of constitutional court was quite popular in Europe because of the historical

nature of powerful legislative bodies as well as the desire to have a codified system of

rules to guide most of the re-built nations after the Fascist regimes that predominated

during World War II. As a result of the popularity of the Kelsen model most of

Western Europe is premised around this system of separate constitutional courts.

Examples of Constitutional Courts (Egypt & Asia)

The transnational spread of constitutional judicial review appears to be

premised on two influential factors; securing economic investment and providing a

means to prevent a government from becoming a totalitarian regime. This can be

seen through the case studies that have been conducted on Egypt, Asia, and Europe.

The first significant case study is on the development of a Constitutional court in

Egypt after the nationalization of private industry during the Nasser government

(Moustafa 2003).

Egypt: Development of the Supreme Constitutional Court (SCC)

The significant insights into the spread of constitutional judicial review to be

gained by the case study of Egypt are in the first instance where a non-democratic

government has embraced a constitutional court and secondly where the impetus for

the court was based on economic necessity. The spread of constitutional judicial

review has also been entitled the ‘judicialization of politics’ to describe the means by

which the Law is used to create an economically stable environment for investment

based on the Neo-liberal conception of encouraging private property rights, the rule of

law, and free markets without barriers to trade (Harvey 2005). In Egypt, after the

ascension of the Nasser government and nationalization of the 1970s, the economy

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was in turmoil as the ready supply of investment was limited due to the fact that

lenders were not willing to invest in Egypt if the investment was not secured in the

law. Even after the Nasser government introduced measures to again allow for

private property rights and laws to prevent the government for nationalizing

investment once again there was not a steady stream of capital. Therefore the

authoritarian government decided to create a constitutional court to uphold the laws of

the nation and to bring about accountability to encourage a return of investors. After

the creation of the Supreme Constitutional Court (SCC) the court predominantly dealt

with matters concerning the taking of lands and other issues concerning the

constitutionality of government acts. However, after economic investment returned to

Egypt the SCC has been able to gain a political voice in challenging actions which

infringe of the rights of Egyptians which had not been envisioned by the creators of

the autonomous SCC (Moustafa 2003).

Asian Cases: Taiwan, Mongolia, and Korea

The first example in the Asian cases in which judicial review is brought to

previously authoritarian regimes involves Taiwan (ROC) and its development of a

constitutional court. The rationale behind constitutional courts in the eyes of

Ginsburg is that they are a form of insurance (2003). This model somewhat applies to

the experience involving Taiwan, however Ginsburg suggests further that the

adoption in Taiwan of judicial review was in line with a trend within Asian

governments to modernize in line with Western Democracies that had judicial review

in their constitutions (2003). The insurance model of judicial review is important to

explain as it plays a central role in the rationale for development of such a court

system. The government in power in a constitutional government would seek to

maintain the acts of the government upon regime change and one method of

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guaranteeing that previous acts as well as new acts must pass the constitution of the

new democracy is to create a constitutional court. The court created in Taiwan is

known as the Council of Grand Justices. The court hears exclusively matters

pertaining to constitutionality of law (Ginsburg 2003, pg 123).

The next case study presented involves the introduction of judicial review in

the new democracy of Mongolia and the creation of the Tsets, or constitutional court

(Ginsburg 2003 pg 159). The creation of these courts surrounds the nascent

democracy in the region. Mongolia which was independent but heavily influenced by

the USSR prior to the fall of Communism in Eastern Europe in 1989 provided the

framework for the constitution to include a means of constitutional review. The

outcome of this influence was a creation of a constitutional court that was limited and

centralized like the European or Kelsen model of constitutional courts. The Tsets,

however have a checkered history in Mongolia concerning the use of the court as an

insurance policy to maintain the authority of the Mongolian People’s Revolutionary

Party (MPRP). The MPRP when faced with a changing political climate created the

Tsets and as well limited their independence and also the ability to declare political

parties invalid. This constitutional dilemma still plagues Mongolia. However this is a

case which is a clear example of the use of judicial review and limited constitutional

courts as a means of insurance when regime change is inevitable (Ginsburg 2003).

The finally Asian case involves the creation of the Constitutional Court of

Korea. The development of judicial review in Korea has been a multi-stage process

involving both models of judicial review from a decentralized United States style

system to the current re-establishment of a constitutional court by Act of government

in 1988. The re-establishment of a constitutional court and a centralized model was a

compromise among the political parties that ruled Korea. The allowance of limited

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judicial review was a direct result of pressure by the United States to combat the

spread of communism and create a constitutional democracy in the region. The

Korean court however has been a very politically active court since the re-

establishment and has been involved in human rights issues as well as economic

development (Ginsburg 2003).

Rationale for Constitutional Judicial Review

From the above case studies it is evident that the rationale behind the

transnational spread of constitutional judicial review is crouched both in an insurance

theory as well as the desire for economic investment. The case of Egypt provides

clear evidence of the implementation of a constitutional court to increase the

economic investment in a country that was finding its economy in ruin after the

nationalization of industry during the Nasser government. The Asian cases show the

spread of constitutional judicial review both as a means of catching up with the West

(Taiwan), an insurance model (Mongolia), and finally a hybrid model which

embraced both a decentralized and constitutional court model to promote economic

prosperity and individual rights (Korea). The transnational spread of judicial review

appears to be closely linked to the emergence of new democracies but can also exist

in an authoritarian regime.

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Independent Regulators

What is an independent regulator? An independent regulator can be defined as

a semi-autonomous body of the government which is in charge of controlling in most

cases a sector of economic commerce or public health that in turn is a means for the

government in power to show that it is acting in the best interests of its citizens and

maintain policy goals upon regime change4. Independent regulators are historically

setup to deal with issues of public concern. Such areas of public concern can be

electricity, telephone, food standards, and prescription drug controls. These areas are

suited for the use of an independent regulator because of the autonomy of the body

from the government. The use of independent regulators has been most prevalent in

the historical development of the United States, Western Europe, and developed

nations. However, the current trend is to see the creation of independent regulators in

developing countries in order to provide currency for a new government both in the

eyes of the citizens and economic investors (Gilardi 2005b).

The question remains what brought about independent regulators? The answer

is the privatization of industry within the now developed but previously

developing/re-constructing nations. The move to privatize once nationalized industry

requires that the government in power seek to show that the new private owners will

work in the best interests of the customers and also to allow private investors to come

into a new market with a sense of security knowing that a return to nationalization is

unlikely (Majone 1999). The necessity of privatization is a hallmark of the neo-

liberalism that has defined the current period of economic development. The trend is

to create a regulatory structure which allows for increased economic investment while

4
The definition is a conglomeration of characteristics and other qualities discussed in the relevant
literature, however the definition is not provided by one author. The relevant work would be of Gilardi
(2005 a,b), Levi-Faur (2005), and Busch et al. (2005).
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at the same time liberating the burdens of the government from previously national

industries. The shift to privatization which was characteristic of the Thatcher era in

the United Kingdom also saw the creation of many independent regulators in

industries such as public transport, communications and energy (Harvey 2005).

The transnational spread of independent regulators

The nature by which this system of regulation has spread has been compared

to a diffusion process. The most vocal supporter of this position is David Levi-Faur

who describes the process of diffusion in relation to regulatory capitalism in Latin

America and a global scale (2005a,b). Levi-Faur uses a wonderful example to explain

the diffusion process of regulatory capitalism, which encompasses independent

regulators, when he describes the action as if someone is opening an umbrella because

it appears to be raining. The discussion focuses on the behavior response of other

actors in the street once they realize the first individual has opened the umbrella and

to determine if the other actor opened the umbrella because they felt rain or because

they saw someone else open their umbrella. Finally the suggestion is that the spread

of independent regulators and regulatory capitalism is a machine of its own in a

learned response mimicked by developing nations (2005a,b). The final conclusion to

be drawn from this process is that behavior of actors may or may not be influenced by

the acts of developed nations but that in the move to become developed similar

patterns of global governance may develop. The outcome in the view of Levi-Faur is

not limited to the internal nation state but as well can be developed at the global level.

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Supranational Independent Regulators – Harmonizing Trade

Upon review of the trends in the development of independent regulators it has

become evident that there is a current trend to harmonize behavior on an international

level. Examples of this trend have been seen in both environmental regulation and

food safety. These two trends both appear to occur through the diffusion process

asserted by Levi-Faur however this mode of policy diffusion is dissimilar in the fact

that there are not over-riding international treaties on these matters (2005a,b) (Busch

et al. 2005). Concerning the development of environmental regulation the route to

adoption of policy is seen to come through two channels. The first channel is

adoption of international environmental protections to make a national program

appear to have more integrity and secondly to adopt the best practices in an

environmental concern to face a common environmental threat. These two channels

are very similar in nature to the development of independent regulators at the nation

state level. The most important insight to be gained is that with continued

globalization and development policies once reserved for the nation state will become

the realm of global actors (Busch et al 2005). With regard to the adoption of Food

Safety standards the adoption of similar international standards would only seem

appropriate to private actors to increase the markets in which their products can be

sold and in turn reduce the costs associated with regional compliance. The example

provided is that of the World Trade Organization (WTO) which utilizes the CAC5

standards for determining food quality and safety (Post 2005). Post discusses in the

paper the need for international standards and why assortments of food standards do

not benefit the consumer. The argument then is made that a harmonized system of

independent regulation under the WTO and in light of other agreements on free trade

5
CAC is the abbreviation for Codex Alimentarius Commission which was established in 1963.
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and food regulation would benefit the economies of both developed and developing

nations. Both examples provide an insight beyond the transnational spread of

independent regulators but to show the trend towards global regulatory schemes.

COMPARE & CONTRAST THE Transnational spread of CJR6 with IR7

The development of judicial review and independent regulators share a similar

political motivation if not also a similar mode of gaining acceptance in developing

nations.

The political motivation behind both judicial review and independent

regulators is to preserve the agenda of previous governments in democratic regimes.

These agendas can range from privatization to maintaining the supremacy of one

political party over another. The insurance model of judicial review combined with

the independent authority given to independent regulators within a government

provide considerable substance for the use of the two forms of governance to maintain

the political agendas of parties that are no longer in power in a democratic system

where regime change is a frequent occurrence. However the political motivation of

judicial review is not only a means to secure the agenda of the previous government

but as well a means by which economic investment can be increased to a developing

nation. One example of such an instance would be Egypt.

By contrast the transport or adoption of independent regulators and judicial

review is not shared between the two forms of governance. As Levi-Faur has

suggested independent regulators use a process of diffusion to gain acceptance in a

nation state which has previously contained nationalized industries while at the same

time seeking to bring about support for a new political regime. The adoption of

6
Constitutional Judicial Review (CJR)
7
Independent Regulators (IR)
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judicial review seems to be a process based on history and as well adopted by new

democracies and nations which are not willing to have governments structured around

parliamentary supremacy.

The final conclusion to be drawn from these two vehicles of economic

development and political stability is that the neo-liberal state encourages stability,

recognition of private property rights, and the rule of law which in turn explains the

spread of both constitutional judicial review and independent regulators.

CONCLUSION

The analysis of independent regulators and constitutional judicial review has

only increased the sense that economic development and private investment are

essential to global development. While it may be said that judicial review is a method

of insurance in democratic government in which regime change is frequent is has also

been shown to play a pivotal role in economic investment in authoritarian

governments such as Egypt. Furthermore, the diffusion of independent regulators and

regulatory capitalism can be shown to bring about a harmonization in standards which

can only benefit private enterprise and economic development. This conclusion may

seem a bit jaded in response to the discourse on the benefits of both constitutional

judicial review and independent regulators, but I would assert that if anything has

been gained from this insight to Law, Economy and Society in a Global World is that

private actors are just as influential as governments and it may soon be that

international commerce supplies the standards by which markets are governed.

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Works Cited

1. Busch et al., The Global Diffusion of Regulatory Instruments: The Making of

a New International Environmental Regime, in The Annals of the American
Academy of Political and Social Science, Vol 598 March 2005.

2. Gilardi, F., The Institutional Foundations of Regulatory Capitalism: The

Diffusion of Independent Regulatory Agencies in Western Europe, in The
Annals of the American Academy of Political and Social Science, Vol 598
March 2005. (a)

3. Gilardi, F., The Formal Independence of Regulators: A Comparison of 17

Countries and 7 Sectors, in Swiss Political Science Review, Vol 11(4) 2005.
(b)

4. Ginsburg, T., Judicial Review in New Democracies: Constitutional Courts in

Asian Cases, Cambridge University Press, New York, 2003.

5. Harvey, D., A Brief History of Neo-liberalism, Oxford University Press, New

York, 2005.

6. Levi-Faur, D., The Global Diffusion of Regulatory Capitalism, , in The Annals

of the American Academy of Political and Social Science, Vol 598 March
2005. (a)

7. Levi-Faur, D. et al, The Diffusion of Regulatory Capitalism in Latin America:

Sectoral and National Channels in the Making of a New Order , in The Annals
of the American Academy of Political and Social Science, Vol 598 March
2005. (b)

8. Majone, G., The Regulatory State and its Legitimacy Problems, in West
European Politics, Vol 22(1) January 1999.

9. Moustafa, T., Law versus the State: The Judicialization of Politics in Egypt, in
Law and Social Inquiry, 2003.

10. Post, D., Standards and Regulatory Capitalism: The Diffusion of Food Safety
Standards in Developing Countries, in The Annals of the American Academy
of Political and Social Science, Vol 598 March 2005.

11. Stone Sweet, A., Constitutional Courts and Parliamentary Democracy, in West
European Politics Vol 25(1) January 2002.

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