UCLA Pacific Basin Law Journal

Nobel Prize winner Muhammed Yunus founded the Grameen Bank as an uncollateralized microcredit lender to impoverished borrowers because he thought you could trust all poor people to pay loans back. His"Grameencredit" tactics, combined with the Bank's goal of elevating the status of the poor through providing business opportunities, epitomizes the "social entrepreneurialism" intention of community economic development ("CED"). But can the borrowing practices of Grameencredit employed in Asian village communities can be successfully transferred to different environments such as the U.S.?

This paper provides a brief description of the economic, legal, and cultural factors in Bangladesh and other developing Asian countries that shaped the concept of Grameencredit, summarizes the history of microcredit within the U.S., compares the environment in developing Asian countries against the U.S., and examines why differences between the two environments present obstacles to direct transfer and successful application of the Grameencredit model.

This paper argues that many of the obstacles to transferring the Grameencredit model specifically and microcredit generally to the U.S. marketplace are not easily corrected through changes to the models alone. Barriers of competition, licensing, and threats of liability are factors that Grameencredit does not face in developing Asia, its formative environment. Simple attempts to address these barriers such as adjustments in loan size are made alter the intended use for the loan and change the nature of the financing service. Coupled with the significantly different credit needs of impoverished Americans, as compared to the borrowers in developing countries, the usefulness of microcredit as a CED program in the U.S. becomes questionable.

Globalization has increased the demand for a global legal infrastructure, but a single worldwide legal system is unlikely in the foreseeable future. A better focus of discussion is what a "reasonably harmonized" global legal infrastructure might accomplish. One major goal is the facilitation of the legitimate interests of individuals and corporations who wish to transact across borders. Clients working across borders wish to be served by lawyers with different types of substantive knowledge, but with common analytical skills, common relationship skills, and a common understanding of what it means to be a lawyer. The demand has already led to rapid changes in the global practice of law; most significantly, the emergence of multinational law firms.

The growth of multinational law firms leads to the question: what are the essential skills that should define a transnational lawyer? A lawyer should be a problem solver, one who is adept at criticizing and synthesizing legal argument, but also one who is skilled in communicating and in assessing and influencing the perspectives of the recipient of the communication.

American legal education in the twentieth century excelled in teaching legal principles, but significant progress is required to maintain its superiority in the twenty-first century. American legal education can, and should, learn from overseas experiments.

On October 22, 2008, the Peking University School of Transnational Law ("STL") was dedicated at University Town in Shenzhen, People's Republic of China ("PRC"). The ceremony was attended by jurists from around the world, including Associate Justice Anthony Kennedy of the United States Supreme Court. STL is mainland China's first Western-style law school. Over the course of the program, the students are thoroughly trained in both Anglo-American common law and civil law systems of Western Europe.

The training at STL compares with that of the best American law schools in terms of the subjects taught and the training and experience of the professors. In addition, STL students have the advantage of a background in "li", the Confucian ethical code which emphasizes collective harmony and the primacy of interpersonal relationships. In the Confucian vision, social harmony rather than justice is the symbol of the ideal society. Ideally under Confucianism disputes are settled according to what is best for social functioning and interpersonal relationships, rather than in terms of legal rights.

The combination of skills practiced at STL has the potential to create a new "breed" of lawyer. If the hallmark of the transnational lawyer in a global economy is the ability to not only critique legal argument, but also to effectively communicate and influence the perspectives of the recipient of the communication, the students at STL should be well-positioned for success.

There has been an explosion of interest in rule of law in recent decades and growing interest in middle-income countries (MICs) among economists and development specialists, including the World Bank. However, there has been relatively less work done on rule of law in MICs and the special issues MICs face in developing a functional legal system. This is preliminary attempt to understand some of issues facing MICs as they seek to establish rule of law. To keep the scope manageable given the wide diversity of MICs, I compare Eastern European MICs and China. Part II provides a brief introduction to MICs and general issues they face. Part III provides a broad empirical comparison of Eastern European countries, the Baltics and former soviet republics, and China. Parts IV to VI discuss rule of law issues in Eastern Europe, with comparisons to China, focusing on lustration issues, implementation gaps, and the very different performance of constitutional and regular courts. Part VII turns to recent debates about the role of courts in China, and the controversial crackdown on social and political cause lawyering. Part VIII concludes.