Rule of Law and Its Effects on Economic Growth

It is generally assumed that the rule of law is essential for economic growth. However, it is clearly a multidimensional concept, including a variety of discrete components. Literature has a huge amount of cross-national data claiming to measure the rule of law. Yet even the very best work in the field has not been adequately attentive to the multidimensionality of the rule of law concept. As a governance principle, it ensures the enforcement of equality in a society, in different spheres. Therefore, in a broader sense, it ensures the avoidance of arbitrariness and is interconnected with institutions and economic growth and development. The 2023 Rule of Law Report, including its 27 country chapters, examines developments across all Member States in four key areas for the rule of law: the justice system, the anti-corruption framework, media pluralism and freedom, and other institutional issues related to checks and balances. The World Justice Project developed the World Justice Project Rule of Law Index as a quantitative tool that measures the rule of law in practice. This article’s aim is to present the World Justice Project Index for Croatia and other EU countries as a helpful tool for comparative methods with another measurement of the Rule of Law, for instance, the Rule of Law Group/Pillar as apart from the Economic Freedom Index. Additionally, this article aims to present chosen research on the rule of law and institutions and its relation to economic indicators and economic growth and development. The article will present theoretical and empirical secondary data on the relationship between institutions, the rule of law, governance, and economic growth.