How much is the rule of law worth? Until recently, this has been a largely theoretical question without the possibility of a specific answer. Undoubtedly there’s a value in being able to enforce a contract, to pass on property to the next generation, or to know that a burglar will be punished. Placing a dollar value on the rule of law, though, seemed an impossible task.
Now the World Bank, in its report “Where is the Wealth of Nations?,” has actually calculated some hard numbers seeking to place a value on the rule of law. The World Bank’s report analyzes the three basic components of every nation’s wealth
— natural resource wealth (farm land, oil reserves, etc.), produced wealth (machinery, urban land, infrastructure, etc.) and a residual, catch-all category, “intangible wealth,” which embodies human capital (things like education and know-how) as well as the value of good governance and the rule of law.
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