In February 2023, Dr. Haddad, director of the Institute for legal transformation, joined four panels at the World government summit in Dubai. On stage, for the first time legal transformation became one of the vocal points regarding the future of law, governance and the upcoming challenges for governments.
Normative Power of the factual
While governments can define the rules a society must comply with, reality dictates the facts governments need to interact with. Currently, power is shifting towards the private sector that is shaping reality through exponential technologies, climate impact and new products that facilitate novel ways of societal interactions, i.e. through blockchain or in metaverses. If governments miss out on regulating these changes in time, legal gaps will eventually increase to a point where national states cannot guarantee to protect their citizens any longer, resulting in potential legitimacy struggles.
What happens when governments can now longer control?
During the panel, Dr. Beer raised awareness for economic shifts caused by remote work. Today, 36 million digital nomads represent the economic value of over 4 trillion dollars which already exceeds the economic power of countries like Germany for instance.
Those digital nomads do not commit to any particular state. If they do not like the regulation or life circumstances at one nation, they tracelessly leave to another. In this way, no government has any control over this large and economically powerful group of people. Thus, as governments cannot control anymore, they have to compete: Compete for economic talents which means to attract people rather than aiming to control them.
Shifts in Governance
Attracting and retaining talent, economic powers and skilled workers requires a shift from social control to social empowerment. In this way, law is going to become rather contractual in the future as digital nomads can choose where to live and which nation will profit from the economic value they provide. Frankly, they can choose where to move and where to pay taxes.
Now, if a state aims to become or remain a global leader in the future, strategies in law and governance must adapt to new realities. While most laws are yet based on societal realities from hundreds of years ago, todays reality is beyond any imagination from 1923. As the speed of change is only exellerating with the exponential development of Artificial Intelligence, Blockchain and Climate change, governments need to shift away from incremental and reactive adjustments to foresighted anticipations in lawmaking.
We need to rethink how to regulate.
As change is constant, adding more regulations will only lead to a regulatory inflation, making it hard for societies to actually know and apply the law. What we need, is a smart way of regulating, not a larger quantity of laws. Korea, for instance, has already taken actions decades ago. In his talk at the world government summit, Prof. Kim Jong Seok, Chairman of the presidential Regulatory Reform Committee of Korea, explained how Korea had terminated 50% of all its regulations in a process called regulatory guillotine. So, the question is not about „how to define new laws for new developments?“ but „how to define foresighted regulations that will remain relevant and sufficient in the future?
This is why governments are urged to think about Legal Transformation. At her panel, Dr. Haddad highlighted: “We do not need new regulations; We need smarter ways to shape them.” Thus, Legal Transformation is a methodology designed to improve the way laws are made and to guide states towards the vision they aim for.
What governments can do
At the Institute for legal Transformation, we combine foresight techniques and comparative law to anticipate change to find legal best practises for future developments. We advise governments in foresighted lawmaking by enabling them to think differently about what law is and how it can be applied to new disruptions in our legal mindset-shift program. Find out more by discovering our services for governments on our website.