Confidence in law and foreign investors


There is no doubt that investors would not commit to a country where people lack confidence in the legal system. Meanwhile, confidence in the law stems from three distinct elements. The first component relates to the predictability of legal policy and, by extension, the nation's legislative agenda. In democratic countries, the Parliament debates and adopts proposals by a legitimate government to form legal policy. These efforts take place in a transparent manner and are open to public scrutiny. Similarly, the resulting piece of legislation is comprehensible and the spirit of the law can be identified through interpretation. As such, that the laws are passed in accordance with democratic procedure bears significant importance in terms of legal predictability. Non-democratic countries, of course, are not entirely devoid of legal predictability. Predictability in this context, however, merely refers to the fact that citizens know in advance which laws apply to a given (mis)conduct. The laws, of course, might not be quite humane in certain situations.The second element comprises of the legal system. It is the nature of laws that they consist of certain clauses which are open to interpretation - which makes it possible for them to address situations that occur after their passage. Judges exercise the authority to interpret laws and, in line with the rules of legal methodology, determine the objective of each piece of legislation to apply them to conflicts. As such, the judiciary contributes to the predictability of the law, which stems from a healthy legal policy, through accurate interpretation and proceedings. Such practices combine the people's confidence in the law with their confidence in the judiciary. It goes without saying, of course, that confidence in the law means little in the absence of confidence in the judiciary.Finally, enforcement has to be reliable. In other words, it is important for official institutions to implement legal norms, which are in accordance with healthy legal policy, and for accurate legal rulings to be implemented in an accurate and effective manner. It goes without saying that, in the absence of due power of enforcement, a legal text or the announcement of a court ruling hardly make any difference in the real world.To be fair, all three aforementioned components have experienced major setbacks over the past couple of years: Legal policy is becoming less predictable. Meanwhile, authorities take certain steps that do not exactly fit into a broader political perspective. The legislative branch seeks to address short-term needs through new laws - to such an extent that our legislators not uncommonly make multiple changes to a single piece of legislation within a year and occasionally eliminate past amendments through new changes. Such anomalies most commonly occur within the context of omnibus bills.In the aftermath of the 2010 constitutional referendum, a grave mistake by the political authority has allowed the Gülen Movement, an organization with messianic and totalitarian ideological leanings, to seize control of the nation's judiciary and made the legal system unpredictable. Ever since, conflicts have been resolved according to the movement's secretive criteria rather than legal predictability - which eliminated the democratic relationship between the necessary components of legal predictability. After all, the courts had begun to rule according to the movement's rules as opposed to the law. At the same time, legal policy developed extraordinary responses to neutralize this existential threat and legal norms have stemmed from temporary notions of threat. In response to the lurking threat within the judiciary, not only legal policy but also the enforcement of court rulings has become unpredictable. The above situation has created a serious shortage of confidence in the law and foreign investors are understandably concerned about unpredictability. The existing problem, however, reflects an extraordinary situation within the context of a broader struggle against a grave threat, and therefore deserves to be treated as a temporary phenomenon.