I burned pretty quickly through about half of the book.  It was fascinating, mostly it an historical survey of Indian, Chinese, and Middle Eastern history.  There were some fairly interesting comparisons between the regimes, and you can see how the political institutions (especially Chinese statehood) of the past have dramatically affected the political institutions of the present.

But the chapters on the rule of law have been the most exciting for me.  

There is a large literature that links the establishment of the rule of law to economic development.  This literature reflects at base an important insight, namely, that the emergence of the modern world, including the emergence of a capitalist economy, was broadly dependent on the prior existence of a rule of law.  The absence of a strong rule of law is indeed one of the principal reasons why poor countries can’t achieve higher rates of growth.

pg. 247

Interesting.  But he continues:

…it is perfectly possible to have “good enough” property rights and contract enforcement that permit economic development without the existence of a true rule of law in the sense of the law being the final sovereign.  A good example is the People’s Republic of China.  There is no true rule of law in China today:  the Chinese Communist Party does not accept the authority of any other institution in China as superior to it or able to overturn its decisions.

pg. 248-49

In other words, the more liberal / Western idea of rule of law is not needed in order for economic growth.  This isn’t to suggest that Fukuyama believes rule of law as we have it here isn’t desirable:  he notes at other points in the book that things like human freedoms and rights are often swept aside in nation’s like the PRC.  He is merely pointing out that, from an economic standpoint, it is possible to have growth without robust rule of law.

He then discusses the English Common Law, explaining why it developed in England and not in other European countries, where the civil law system was preferred.  Finally, some more interesting thoughts:

The rule of law rests on the law itself and on the visible institutions that administer it — judges, lawyers, courts, and the like.  IT also rests on the formal procedures by which those institutions operate.  But the proper functioning of a rule of law is as much a normative as an institutional or a procedural manner.  The vast majority of people in any peaceful society obey the law not so much because they are making a rational calculation about costs and benefits, and fear punishment.  They obey because they believe that law is fundamentally fair, and they are morally habituated to follow it.  They are much less inclined to obey the law if they believe that it is unjust.

pg. 259-60