The Effect On The Rule Of Law

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When the rule of law has been established by societal conventions, it can be changed when the government coerces the enforcement of unfair rules. When the rule of law is established through the government, smuggling will often undermine it because the law is not being applied equally to the smugglers, and they gain an unfair advantage in the market. One can argue that the smugglers are responding to unfair tariffs that prevent the rule of law because they as importers have to a tax that domestic producers do not have to pay. If the rule of law has been established so tariffs are small, and fair, then the argument is flawed. Negative effects on the rule of law caused by the tariff will be smaller than the negative effect on the rule of law when the law does not apply equally to everyone, and smugglers bribe official to successfully import their goods so when the rule of law is well established, smuggling undermines it.
When a country does not have a well-established rule of law, then smuggling can help created a strong De Facto rule of law by encouraging equitable societal conventions. If tariffs are sufficiently high, and importation or exportation bans are comprehensive, then people stop applying the government’s rules and in turn they create a new set of societal conventions that people adhere too. When this happens, the rule of law is strengthen because smugglers avoid stifling tariffs, and the rules are applied more equitably to foreign producers, and domestic
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