The Interplay of Legal Capacity, Convergence, and Development in Insolvency Reform

The wholesale transplantation of foreign insolvency laws with minimal contextual adaptation—rule convergence—can be inimical to development in African states because it displaces the legal capacity through which insolvency systems become institutionally responsive over time. Situated within a transnational reform order shaped by overlapping developmental and market-integration logics, insolvency reform is frequently promoted through global scripts, technical assistance, and benchmarking regimes that reward rule convergence. This order and the discourse that supports it often operate within an implicit economic-growth development paradigm that treats legal development as achievable through the external supply of ‘best practice’ rules supported by enforcement capacity. This paper challenges that view, advancing a systematic conceptualisation of state legal capacity as the evolving institutional ability to formulate, adapt, interpret, implement, enforce and legitimate legal rules in response to societal legal demand. Applying this framework to corporate and insolvency reform trajectories in East and West Africa, the paper shows how rule transplantation produces capacity displacement, undermining endogenous legal development and development more broadly. Insolvency reform must therefore be understood as a project of legal capacity-building rather than of rule importation, enabling African states to act as co-producers in the evolution of global insolvency norms and models.