Commercial Legal Systems
USAID follows international best practices and emerging scholarship to support the kinds of systemic reforms that will best enable individuals and firms to prosper by improving access to justice, establishing strong property rights, ensuring business rights, and upgrading contract rights to meet the demands of a global economy.
Essential Components of a
Commercial Legal System
USAID helps countries to improve these areas of law |
Access to Justice
- Courts provide the foundation for resolving commercial disputes. Yet justice delayed is justice denied. USAID works with local experts to re-engineer outmoded judicial systems by improving court administration and reducing costs and delays in the system.
Property Rights
- Real Property: Secure rights to use land and buildings are essential for investment and commercial activity and support commercial lending, allowing borrowers to obtain better interest rates.
- Personal Property and Collateral: Equipment, inventory and e accounts receivable can serve as a source of funds, but only if supported by the legal system. Combining advanced electronic registries with supportive laws and regulations, USAID brings improved lending regimes to developing countries.
- Intellectual Property Rights: Copyrights, trademarks, patents and other rights protect the creative efforts of entrepreneurs and promote technological advances.
Contract Rights
- Contract Law: Moving from barter and cash transactions to sophisticated commercial relationships requires a solid system of contract rights and enforcement, which is fundamental to economic growth.
- Foreign Direct Investment: A vibrant domestic investment climate attracts foreign direct investment. By addressing investors' concerns those issues while emphasizing the profitability of the domestic enabling environment, USAID helps countries to attract strategic investors who can help rehabilitate industries, import needed technologies, and create new jobs.
- Trade: USAID provides extensive assistance on the full gamut of trade-related issues, from World Trade Organization membership to non-tariff barriers that adversely affect producers and consumers in developing countries. Some of the topics covered in our programmatic work include:
For more on our trade-related work, see USAID's Trade and Investment page
Business Rights
- Competition: When vested interests control a sector of the market, consumers suffer and growth stagnates. USAID works with the Federal Trade Commission to support development of appropriate competition systems worldwide.
- Bankruptcy: When business ventures fail, well designed bankruptcy laws protect both lenders and borrowers. USAID helps countries adopt systems that lower the risks of lending and failure by installing bankruptcy systems that support growth through entrepreneurship.
- Company Law and Corporate Governance: Company structures allow investors to limit risks and achieve growth, but with this power comes great responsibility. Corporate governance is an essential part of company regulation. Building from the OECD’s Principles of Corporate Governance, USAID has developed a range of assistance initiatives for countries seeking to improve their environment for successful companies.
Access to justice, property rights, contract rights and business rights connect through Commercial Dispute Resolution, which relies on effective courts and other formal and informal alternatives. Legal and contractual rights are only as meaningful as the ability to enforce them. Delays, unpredictability and high costs of enforcement reduce growth and deter investment. USAID helps countries to build a culture of accountability through proven approaches to enforcing legitimate rights.
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