Transcript | 2.lecture: Following of law, enforcement of law and economy (Lucia Žitňanská) - University for modern Slovakia

The enforcement of law in the broadest sense is a subsystem of a society, which supports the following of rules and reveals and punishes people, who break the rules and norms, which are followed in the society. So much for the definition from the previous lecture. What does this really mean? Let's try to look at it through some examples also used in the previous lecture.

What affects, whether we will follow the speed limit on a highway? Or, why does the majority of those who regularly exceed the speed limit in Slovakia start to follow the speed limit as soon as they cross the boundary and enter Austria? Do we have low fines?

Let's imagine a situation, where the fine for a limit exceeding will be 1,000 Euro and there will be no policemen measuring the speed. Or let's imagine a situation, where the fine for a limit exceeding will be 1 Euro, there will be no other sanction even after a repeated offence of the traffic rules. There will be a lot of policemen at the highways, so they will measure the speed every 10 kilometres.

Which of these situations will motivate You to follow the speed limit. In the first example is the motivation probably small, in the second it will probably depend on how long the journey, that you have before you, is .

Not the first and nor the second situation is taken from real life. But truthful answers to both questions will lead us to the core of it. The sanction, punishment, should be such, to be felt, and at the same time there should be a real risk, that it will be given.

Let's take another example. In the previous lecture we mentioned a case of theft. When you take three sunflowers from a field to give it to your girlfriend, it's a criminal act in Slovakia. Even despite of that, some of you did it or will do it. First you look around, nobody's to be seen, let's do it. If the field was under surveillance, you'd think twice.

The same goes for serious criminal acts. The legislator decides the amount of punishment. About whether someone someday will get it, and whether the criminal justice policy will fulfil the function of repression, but also prevention (to discourage from criminal acts) is decided by the ability of the police and public prosecutors office to uncover and investigate individual cases of criminal acts and of courts to make decisions about them.

Let's take another example from the previous lecture. You lent money to your neighbour. You didn't agree to any interest, nor to interest on late payment, because it's a neighbour. Your neighbour won't pay you at the date you agreed to. You wait a month, two and you lose patience.

You forward your argument to the court. The court will decide within a month and will award You the regular interest on late payment. You will forward it to the executor and next month you have your money with interest on your account. And, of course, also with a payment for the expenses for the lawyer. Okay, next time you will think twice, but as a last resort will your neighbour badger you into it again. Or it will be different.

You forward your argument to the court. The court will decide in a year and will award you the regular interest on late payment. You will forward it to the executor and next year ( in the better case) you will have every month a partial payment with interest on your account. For your neighbour it was an advantageous transaction. He wouldn't get any money from the bank. The interest that he has to pay isn't much higher than the one he'd have to pay if he borrowed from the bank. He will pay in instalments. Never in your life borrow money to a neighbour. From your point of view only the expenses including your lost profit, after all you could have used your money in a different way.

Even in private law relationships, between citizens, but also between businessmen holds, that the enforceability of law is given by the sanctions and the ability of the courts and executors to decide and enforce.

That's why it holds, that the level of enforceability of law depends on the quality and effectiveness of the functioning of the institutions, police, public prosecutors office and courts. And at the same time it holds, that a low level of enforceability of law represents a barrier to business, because it increases the expenses of businessmen. And in the worst case it causes insolvency.

A high-class and effective functioning of institutions of law protection conditions an effective enforceability of law and at the same time motivates to follow law.

Motivation to follow law can stem also from other factors, not only from how well the organs of law work. I will give an example.

The law sets, that contracts, which are signed by public authorities and autonomies, and which are at the same time concerning the management of state property, respectively autonomy, are mandatory to be disclosed. The legislation is set so, that these contracts become valid a day after their disclosure. This means, that before they are published, they are not valid and it is not possible to follow them, the contracting parties cannot fulfil them. If one of the contracting parties would do so, it risks, that the second contracting party will be able to enforce the fulfilment back. The parties are so motivated, if they want to fulfil the contract, to secure its publication.

There are areas of law, where a well incorporated motivational mechanism in a legislation stimulates the following of law, because the following of law pays off more than its breaking. The possibilities of such legislation are limited and then it holds, that a law without a sanction is not a law, and a law, which is not enforceable is also not law. The role of the state organs, police, public prosecutors office and courts is so becoming irreplaceable. And that's why there is a direct correlation between the quality and effectiveness of the functioning of the organs of law protection and the enforceability of law, but also the quality of business environment, and also the feeling of justice.

Finally, some data from the Doing Business rankings, which is annually made by the World Bank and which expresses the quality of the business environment in the individual countries based on various criteria. One of the criteria, which is measured, is the enforceability of contracts, where the measured unit is the time from the breach until the recovery of the debt (i.e, including executions).

According to this chart, in the criterion of enforceability of contracts, is Slovakia on the 71st place, the enforceability of the contract is 565 days, while the costs of recovering the contracts are shown in the amount of 30 percent of the defendant's claim. For comparison. Austria is 6th in the world with a length of 397 days of recovery and cost of 18%, Germany is 8th, with 394 days and 14.4% (the number of actions that a creditor must do to get the claim is also measured, here is Austria better than Germany). And from the other end in the EU is Greece on 90th place with the length of recovery 819 days at a cost of 14.4% and Italy at 158th place with 1,210 days, and the cost of 29.9%.