Legal reasoning and Latin America’s economic development

Abstract

This article discusses how a method of legal reasoning employed first by French and Spanish legislators and judges and, subsequently, by their Latin American successors hindered the economic development of their respective countries.1 It suggests that significant economic development would be possible if legislators helped enact honest, reasonable, and fair versions of successful market practices in a manner consistent with their nations' or regions' developmental goals.2 It further suggests that Latin American judges can contribute to the attainment of such goals by adopting a method of reasoning that differs from their present method. The proposed method requires that in disputes caused by the disabling effects of obsolete statutory, case, or customary law on promising new customs and practices, the judge acts as a quasi-legislator. In that capacity, he should carefully consider not only the pivotal facts of the dispute and the applicable law but also his nation's socio-economic conditions and economic development goals. Then, by placing himself in the archetypal position of a reasonable merchant, always having in mind the interest of his contractual and third-party 'others', the judge's decision should enable Justice Oliver Wendell Holmes Jr.'s 'prophecies' of what courts will decide in future cases with similar facts and legal issues.3 Thus, he will also be heeding the advice of the distinguished Mexican legal philosopher Eduardo García Máynez, who urged judges to fill the inevitable obsolete and unfair normative gaps with equitable judicial 'individual' norms.4 Finally, in updating practices and correcting injustices, the judges' methods of reasoning should be guided by a broad definition of good faith adopted by 19th-century German Civil and Commercial Codes as well as by the 20th-century US Uniform Commercial Code (UCC), as will be discussed throughout this article. In essence, it requires that legislators and judges take into account the honesty, reasonableness, and fairness of the new practice before it becomes a binding norm.