I was working on the basis of wikipedia's list of characteristics that it highlighted.
But, yes, some form of rule of law is arguably a precondition for a civil society, safety, and civil rights too.
... no nation can have a strong market economy without adequate participation in an information framework that records ownership of property and other economic information. Unreported, unrecorded economic activity results in many small entrepreneurs who lack legal ownership of their property, making it difficult for them to obtain credit, sell the business, or expand. They cannot seek legal remedies to business conflicts in court, since they do not have legal ownership.
... two parallel economies, legal and extra legal. An elite minority enjoys the economic benefits of the law and globalization, while the majority of entrepreneurs are stuck in poverty, where their assets—adding up to more than US$10 trillion worldwide—languish as dead capital in the shadows of the law.
Since the fall of the Berlin Wall, responsible nations around the developing world have worked hard to make the transition to a market economy, but have in general failed. Populist leaders have used this failure of the free market system to wipe out poverty in the developing world to beat their "anti-globalization" drums. But the ILD believes that the real enemy is within the flawed legal systems of developing nations that make it virtually impossible for the majority of their people—and their assets—to gain a stake in the market. The people of these countries have talent, enthusiasm, and an astonishing ability to wring a profit out of practically nothing`.
What the poor majority in the developing world do not have is easy access to the legal system which, in the advanced nations of the world and for the elite in their countries, [b]is the gateway to economic success, for it is in the legal system where property documents are created and standardized according to law[/b]. That documentation builds a public memory that permits society to engage in such crucial economic activities as identifying and gaining access to information about individuals, their assets, their titles, rights, charges and obligations; establishing the limits of liability for businesses; knowing an asset's previous economic situation; assuring protection of third parties; and quantifying and valuing assets and rights. These public memory mechanisms in turn facilitate such opportunities as access to credit, the establishment of systems of identification, the creation of systems for credit and insurance information, the provision for housing and infrastructure, the issue of shares, the mortgage of property and a host of other economic activities that drive a modern market economy.
The Institute for Liberty and Democracy (or ILD) is a Lima-based think tank devoted to the promotion of property rights in developing countries. It was established in 1979 by Peruvian economist Hernando de Soto. The ILD works with developing countries to implement property and business rights reforms that provide the legal tools and institutions required for citizens to participate in the formal economy. ... The ILD's initiative began in 1979 when de Soto was running a group of small Peruvian mining companies headquartered in Lima and believed he was spending too much of his time grappling with red tape and climbing over regulatory barriers. He found this to be a nationwide problem, resulting from excessive government regulation. This meant that the lion's share of the Peruvian economy was an informal one.
When the Shining Path began to gain power during the 80s, the ILD started a campaign to raise awareness about "the informal sector." In 1986, de Soto published his first book, The Other Path, calling for legal reforms. ... By 1987, ILD's research had determined that the value of real estate assets that were not duly titled or could not be leveraged to generate capital was in the neighborhood of US$ 70 billion. Such "extralegal" homes could not be used in the legal market to obtain credit or produce surplus value. Therefore, for their owners, this enormous investment was "dead capital."
The ILD then drafted the "Property Registry Law", presenting it to the Peruvian parliament in 1988. Simultaneously, the ILD was conducting a national campaign to create public awareness of the issue and the advantages of integrating such a huge amount of extralegal property into the legal system, which reached its pitch when Peruvian pollsters confirmed that 80 to 90 percent of the population supported "formalization" of the poor's real estate assets.
The Peruvian parliament unanimously enacted the ILD's draft into law (Ley del Registro Predial) in November 1988. To assure that extralegal property was titled and recorded, the ILD helped to create a new organization - Registro Predial - and then proceeded to run it on behalf of the Government from 1990 until 1996. ... In February 1992, the ILD proposed to the Peruvian public and government a draft of a new law that would allow all parties in conflict the option of an arbitration procedure that would solve their problems in a quick, inexpensive, fair and predictable way. Although the ILD draft was not accepted, its provisions were included in General Arbitration Law No. 25935 in December of the same year. In addition, the agency in charge of formalizing property, COFOPRI, which was created in 1996, adopted the rules for resolving informal property border and ownership disputes from the ILD proposal and incorporated them into COFOPRI's regulations.
-- https://en.wikipedia.org/wiki/Institute ... _Democracy