Kenneth Neil Cukier

Seizing the ‘Arbitrage Opportunity’
for Legal Rights

Innovations Case Discussion:
International Bridges to Justice

The idea of innovation used to conjure up images of scientists in white lab coats
peering into microscopes. Then, what sprang to mind were buff Silicon Valley
entrepreneurs devising new business models. These caricatures sound simplistic,
but they largely held. However, a new form of innovation has emerged that forces
us to change our mental picture again. Its agent of action is the social entrepreneur,
and the method is to do for society what their forbearers did for business.

On the surface, the link between innovation and rights may not be apparent.
International Bridges to Justice’s operations seem straightforward: it promotes
legal rights around the world by partnering with governments to develop and
assist a community of public defenders. It sounds like another do-good non-gov-
ernmental organization.

But this is to severely misunderstand IBJ’s work and the method of its founder
and president, Karen I. Tse. Rather, it represents a radical approach. On one level,
IBJ cleverly turned a series of difficult obstacles into a “market opening” for its
activities. At the same time, IBJ’s initiatives effectively transform legal rights from
a political problem to an economic issue. By putting it on a different plane, a win-
dow of opportunity is opened whereby substantial, long-lasting change is possible.
The IBJ story is instructive not only because it reveals a new form of innova-
tion, but because IBJ’s approach may serve as a model for other global problems
that require many stakeholders to be brought together. Yet it embodies something
far greater, too. From its modest first step of fostering rights, where it ultimately
ends is at the audacious goal of ending state-sanctioned torture in this century. To
realize this, Ms. Tse implores, requires a change in consciousness.

It is powerful ideal. Does it simply fit the pattern of the wonderful hyperbole
that all entrepreneurs share? Or is Ms. Tse actually on the path towards achieving
this, in the footsteps of people like Mahatma Gandhi or Martin Luther King Jr. To
consider this, it is vital to understand the rich dimensions of IBJ’s innovation,
which is not obvious on the surface.

Kenneth Neil Cukier is a business correspondent at The Economist. He has written
widely on technology, public policy, and international relations. He has followed IBJ
since its founding in 2001.

© 2008 Kenneth Neil Cukier
innovations / spring 2008

135

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Kenneth Neil Cukier

EXPLOITING THE GAPS

“The entrepreneur is the innovator who implements change within markets
through the carrying out of new combinations,” the economist Joseph Schumpeter
famously wrote in 1934.1 The way this happens is that entrepreneurs identify what
in hindsight we may refer to as “opportunities,” but looks very different at the out-
set. It is a reality where something seems amiss. Entrepreneurs often spot this
where most of us do not. A way to think about it is as the “white spaces” or “holes”
on a map, not the images of land. Jean-René Fourtou, the former chief executive of
Rhône-Poulenc, called it “la vide” (emptiness).2 Sachio Semmoto, the founder of
numerous Japanese telecom firms, describes it as “the contradiction”—that is, an
inconsistency in what exists that opens up a chance for the what-can-be.3

In the case of IBJ, Ms Tse saw something special at a special time—but saw it
in a new way. She noticed that there was a gap between what countries had signed
up to do regarding legal rights and what they were actually doing. As she noted in
her essay, some 113 countries are said to practice torture, even though around 93
have signed international conventions and established domestic laws to safeguard
citizens’ rights. The difference between the public pronouncement and the practice
created a sort of “arbitrage opportunity.” There was a way to use the system itself
to plug the hole. The art of arbitrage is to capitalize on the difference that exists
between things at the same state in time. Yet what was needed was an entity to
point out the divergence and come up with a way to bridge it. Thus, “International
Bridges to Justice.”

The international dimension—the “I” in “IBJ”—is essential. The local legal
community cannot do it alone: it does not have the infrastructure, training, or
resources. In fact, trying on their own might only invite retaliation from those
whom its actions threaten—the very people, ironically, charged with upholding
the law, such as police, government officials, and even judges. (It is not uncommon
for judges in countries where IBJ operates to detain lawyers who argue that their
client was tortured.) In addition, IBJ “partners” with governments. It is welcomed
in since it sells itself as a sort of service-provider to help the country’s own reforms.
Legal rights, after all, is a foundation to all other social goals.

The IBJ method is novel. Most human rights groups take the opposite
approach. Rather than work with governments, they relish their role as outside agi-
tators. To work within the system would seem tantamount to condoning it.
Furthermore, they tend to focus on major cases and try to remedy specific abuses.
If the person gets released, they claim victory and may turn their attention else-
where. An example is Amnesty International’s classic letter-writing campaign,
which although extremely useful on the individual level, is not as effective on the
societal level. Other groups like Human Rights Watch document and expose abus-
es—itself vitally important, yet leaves the fundamental problems unaddressed.

In 2001, when IBJ was founded, no organization was working solely on the
broader plane of the long-term, practical implementation of rights in criminal law.
There are many reasons why, but the most important is because when earlier

136

innovations / spring 2008

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Seizing the ‘Arbitrage Opportunity’ for Legal Rights

groups were formed, the circumstances were not ripe for much more. But today,
almost all governments are moving in the direction of adopting global norms and
standards. It creates a market opening. For example, in 2001 China joined the
World Trade Organization and won a bid to host the 2008 Olympics—important
symbols of the country’s integration into the international community. Adhering
to global legal rules is a part of the trend.

So in this way too, IBJ bridged a gap between what other rights groups were
doing and the new area where it could act. In Schumpeter’s terms, it was the “mar-
ket” by which IBJ effectuated change through “new combinations.”

Those “new combinations” have other features. IBJ works with the existing
defender community. It is a humble approach. This makes its work more easily
accepted by the defenders as well as governments. Also, it enables the programs to
develop deep roots among the practitioners, so that IBJ’s initiatives have staying
power. Moreover, instead of aiming for immediate victories, IBJ focuses on the
long-term, by slowly developing a sustainable infrastructure for legal rights. Ms.
Tse often refers to this as creating “generational change,” that is, institutionalizing
defense rights so that it does not rely on the goodwill of any particular individuals
at any particular time, but is an inherent feature of a country’s judicial system.

Again, this is new. To think of it in parable terms, it is not a question of giving
a man a fish or teaching him to fish—the innovation here is organizing him into a
co-operative. (That is, taking fishermen and providing them with better training,
better materials, and establishing a community so that they can do what they do
better.) In so doing, IBJ does not want to stop rights abuse so much as prevent it.
In addition to being a hub for the local defender community, IBJ also acts as a
sort of “market-maker.” It establishes the environment for legal rights to take hold
by being the agent that brings parties together. IBJ found that assisting the defend-
er community only addresses one part of the problem. It is not enough if the cli-
mate in which they work is not amenable to their activity. Instead, it is necessary
to bring different parts of a judicial system together—such as the prosecutors,
police, judges, prison officials, etc.—so that defenders were not seen as hostile to
the judicial process but an essential component to it. This is not so obvious to peo-
ple from non-Western legal traditions, or countries with embryonic judicial sys-
tems. The West’s adversarial legal process otherwise looks disrespectful; defenders
are seen to antagonize other parties (whose reaction is to lash out against them).
So IBJ took on the role of market-maker by bringing these groups together.
With such a tense situation, it took an outsider to be the agent of action. IBJ was
seen as neutral. And Ms. Tse herself did not seem threatening (more “reverend”
than “lawyer” perhaps…). In many instances, the meetings among prosecutors,
defenders, police, and judges represented the first time the parties had ever met
outside a courtroom. In Ms. Tse’s spiritual facet of her work, she describes this as
a chance for their uniforms to disappear and their humanity to show through. By
connecting in this larger, spiritual way, people could empathize with each other
and learn. And from this, change. Often, in the honesty and intensity of the dia-
logue, participants found their faces moist with tears.

innovations / spring 2008

137

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Kenneth Neil Cukier

Strikingly, the most important dimension of IBJ’s innovative approach is also
its most discreet (and I disclose it with care). IBJ works on “legal rights”; the idea
of “human rights” almost never appears in its literature and is very rarely dis-
cussed. Ms. Tse publicly emphasizes that the central problem facing countries with
developing legal systems is not so much the handful of political prisoners that
already have the attention of the West, but the tens of thousands of ordinary peo-
ple who face abuse in the criminal justice system on an everyday level. Clearly the
basic legal rights of citizens—the young Cambodian boy accused of stealing a bicy-
cle, in the example from Ms. Tse’s essay—is something that everyone can sign on
to, be it government official, policeman, or prosecutor. Human rights might be
controversial; legal rights need not be.

Is the emphasis on legal rights a political calculation so that IBJ stays in the
good graces of the governments with whom it partners? What is certain is that IBJ’s
approach gives it access and therefore influence. Is the link between legal rights and
human rights close, such that concentrating on one will surely improve the other?
It is clear that creating the infrastructure for the rule of law is critical on many
dimensions, from protecting property rights and upholding contracts to ensuring
basic legal safeguards that lead to a stable society.

Ultimately, the gaps that Ms Tse encountered, and which seemed to others to
be obstacles, actually turned out to be “market openings” through which an inno-
vative approach could take hold. In this way, Ms Tse’s work sheds new light on
Schumpeter’s idea of innovation and change. Yet it required not only looking at the
issue differently but acting differently too.

TRANSFORMING THE PROBLEM

In speeches where she has sought to explain IBJ’s unique approach, Ms. Tse likes to
quote Kofi Annan, who in 2005 as United Nations Secretary-General said about
human rights: “The era of declaration is now giving way, as it should, to an era of
implementation.”4 Where in the past it was important to get countries to sign on
to accords, now that they largely have, the key is to get them to fulfill their com-
mitments in practice. That is the gap that IBJ identified as a sort of arbitrage
opportunity.

But the genius of IBJ, and the second pillar of its innovation, is in how it did
this. The work of IBJ had the effect of changing the nature of the problem.
Enforcing legal rights on a day-to-day level where it affects the lives of ordinary
people is hard. It requires making changes deep into the legal system: its institu-
tions, practices, and attitudes. (Hence, IBJ’s activities had to encompass the overall
legal environment, not simply defenders.) Still, developing a robust infrastructure
for the defense side of the docket is critical.

As Ms. Tse noted in her essay, defenders are the first line of support in a crim-
inal justice system; the sooner a person has access to an attorney, the less likely his
rights will be violated. IBJ’s work shows that when resources are put towards
informing citizens of their rights and ensuring a supply of well-trained defense

138

innovations / spring 2008

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Seizing the ‘Arbitrage Opportunity’ for Legal Rights

attorneys, the incidence of abuse is markedly reduced. But building out this infra-
structure takes time and money. Indeed, the more pragmatic the work, the more
capital intensive it is.

The implication is that IBJ’s method actually transforms the issue of ensuring
legal rights from a political problem to an economic one. Thinking about it in this
way changes its nature and creates new possibilities for change. Indeed, it becomes
possible to informally calculate the cost of legal rights. This puts a price tag on
rights abuse; a monetary sum above incalculable physical and emotional costs. In
so doing, it suggests that it may also be possible to out-finance it.

For example, based on IBJ’s experience of running programs in Asia and else-
where over the past seven years, the amount needed to provide a basic level of
rights is extremely low: perhaps only a few cents per year, per person. This encom-
passes establishing a national network of legal-aid centers, publicity of rights cam-
paigns, access to defense lawyers and case support. Thus, a country like Thailand
with 65 million people might need around $10 million to provide basic legal rights and prevent torture; for Niger’s 14 million people, around $4 million; and so on.
We may quibble about the right amount. But by transforming the problem in this
way, the IBJ method opens up a promising new avenue for it to be addressed.

This sort of informal economic analysis suggests that governments, civil-soci-
ety groups and the business community might want to rethink their approach to
fostering rights. IBJ’s initiatives that establish a creative partnership among stake-
holders seems appropriate, since the issues are larger than any one group can han-
dle on its own. New relationships between the local community and a global sup-
port-system is also crucial. Lastly, the role of the private sector is vital, since it
excels at the very on-the-ground implementation that is required. In this respect,
IBJ has forged alliances with private law firms and has tried (albeit with only lim-
ited success) to engage the business community.

One reason why IBJ has made the cost of realizing rights so low is due to its
creative use of technology. A question that IBJ’s experience raises is whether the
organization could have existed prior to the Internet. Of course, other human
rights groups existed earlier. Yet, as always, one is hostage to one’s times. Technical
limits impose invisible constraints that we only see in hindsight. Earlier rights
organizations needed to grow slowly and piecemeal, since there were limitations
on the “coordination costs” that their activities entailed. Management is difficult
when it happens over a telephone and fax machine; information is scarce and cost-
ly to share.

By contrast, one of the Internet’s key attributes is that coordination and collab-
oration is far easier, and communities can form and interact far more efficiently.
In this light, it is unsurprising that in 1997, at the dawn of the commercial Internet,
the Nobel Peace Prize was awarded to Jody Williams and the group she coordinat-
ed largely via the Internet, the International Campaign to Ban Landmines, which
had been founded only six years earlier. In the same way, IBJ is a beneficiary of
using information-technology as a cornerstone of its activities.

At its most basic level, the technology is a way to keep defenders abreast of cur-

innovations / spring 2008

139

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Kenneth Neil Cukier

rent laws and rulings. In the West, where information flows smoothly, it is easy to
take this for granted. But in developing countries, something as modest as an
Internet-enabled PC serves as a massive law library. And it is not always certain
that prosecutors and judges are familiar with the law; arming the defenders with
information is vital. The computer acts as a “neutral messenger” with which
defense lawyers can present unwelcome statutes and precedents to the court. In
some circumstances, to contradict a judge or prosecutor is considered insulting
and invites trouble. Being able to shrug one’s shoulders and point to the PC as the
source of the information depersonalizes the situation.

Additionally, computers and the Internet act as the eyes and ears of the capital
cities and international community. It also provides a voice to the defense attor-
neys. The technology is a life-line for defenders (sometimes in remote areas) to
reach the broader world to get support and advice. It also redraws the balance of
power, because judges and prosecutors are implicitly put on notice that what hap-
pens in the court room is being watched elsewhere.

Furthermore, the technology enables the defenders to form a community, in
which they can support one another, provide advice and rally for change. This
might sound banal, but it is one of the most important aspects of IBJ’s work, and
one of the biggest benefits that the Internet brings. All great movements require
communities, whether artistic groups, scientific schools of thought, political par-
ties, or social change. Invention may be a solo activity, but change happens through
groups. It takes a village. Online, people can share information and form groups
easily. For defenders in immature judicial systems, there is strength—and safety—
in numbers.

Lastly, the technology enables IBJ to scale—that is, grow larger by extending
marginally less, not more, resources. This is because the IBJ method is above all
intellectual property—and like most informational goods, developing the first one
is expensive and time-consuming, but replicating it is cheap. The magic of the IBJ
approach is that many elements of it can be easily applied to other countries and
other contexts. IBJ estimates that around 70 percent of its projects and materials,
such as the defender “toolkits” and accreditation systems, can be reused elsewhere
with only minor modification.

Importantly, the IBJ method is “iterative” or “emergent”—Silicon Valley terms
that basically mean that IBJ learns as it goes along, rather than simply executes a
preset plan. This makes the organization flexible to change depending on the cir-
cumstances. At the same time, it means that the process is inherently open to
incorporating improvements, which then can flow though all of IBJ’s activities
elsewhere almost instantaneously.

The ability for organizations to generate and share knowledge in this way, and
to learn, is what distinguishes 21st century enterprises from their 20th century
counterparts. And it is why IBJ has been successful in the handful of countries
where it has direct activities, while also being able to go global. Other NGOs adopt
a sequential approach whereby they grow through incremental steps and country-
by-country in a linear fashion. However, IBJ recognizes that the technical tools

140

innovations / spring 2008

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Seizing the ‘Arbitrage Opportunity’ for Legal Rights

now exist that let it can reach deep into legal communities around the world simul-
taneously from its base in Geneva. The IBJ model scales because it explicitly taps
into the abilities of others, while upholding the notion that to lead is to serve.

THE SPIRITUAL ELEMENT

Medieval alchemy occupied itself with turning base metal into gold. Yet this is
actually a superficial characterization: it took place in the context of religious mys-
ticism not science. At its core, it was about the spiritual transformation of the
alchemist. So, too, the journey that Ms. Tse pursues has as its apex not so much a
reform of the legal system, but a change of consciousness among individuals, so
that they share in their common humanity. The context is globalization and mar-
kets; the transformation is in awareness. Legal rights are simply the immaterial
residue that is left in its trace.

The front door of IBJ comprises formalistic things such as habeas corpus and
rules of evidence, but it leads to a place where what matters is a shift in thinking.
On one level, this is seen in the “Communities of Conscience” program, in which
defenders from developing countries and mature legal systems meet. But on
another level, it is what drives all of IBJ’s projects, particularly where different
stakeholders are brought together to empathize and learn from one another. Ms.
Tse’s unique background as both a lawyer and reverend puts her in a position to
understand this, just as it gives her credibility to speak on different levels to differ-
ent people in pursuit of her goals.

Those goals seem modest: helping governments live up to the standards they
themselves have set. Yet the ultimate destination is revolutionary: Ms. Tse’s ambi-
tion is to end state-sanctioned torture in the 21st century.

It may sound utopian, but it should not. There are parallels with the movement
to abolish slavery in the 19th century. It took many reformers from different walks
of life. It took many years. It seemed impossible at the outset; powerful interests
were entrenched. (And wasn’t it just a sad fact of life: didn’t slavery exist since time
immemorial, the argument went…) New institutions needed to be created. Yet
ultimately, it was not so much the introduction of law but a change in conscious-
ness that accounted for the success—abolition laws only followed the shift that had
already taken place in people’s hearts. Of course, incidents of slavery still crop up
today. But they are exceedingly rare, and never state-sanctioned. Most important-
ly, no one would even try to intellectually justify it.

Like slavery, state-sanctioned torture is an utter anachronism, argues Ms. Tse.
Just as the 19th century was the one that saw slavery abolished, so too the current
century can be the one in which torture is totally repudiated. In following this
path, Ms. Tse is not only carrying forward the ideals of social reformers, but also
the legacy of Schumpeter’s entrepreneurs. This is because her objective is not an
“incremental improvement” to the system (that is, trying to reduce torture), but an
“innovation” that radically upends the order of things (that is, eradicating it).

IBJ has crafted an astute formula for the times. It eschews activism in favor of

innovations / spring 2008

141

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023

Kenneth Neil Cukier

institutionalization, by using the system to change the system. It turns obstacles
into opportunities by exploiting the “arbitrage” potential of the inconsistencies. It
scales tremendously by melding local and global communities. It acts as a market-
maker by serving as a neutral platform to bring stakeholders together. Its activities
effectively transform the problem of human rights from the political to the eco-
nomic realm, thereby opening up a new avenue for the issue to be addressed. IBJ’s
destination, ending torture, is earth-shaking in its magnitude. And its work is
transformative in terms of the rule of law and the way people think.

IBJ’s approach can be usefully applied to other global issues. For instance, in
areas as diverse as climate change, public health, economic development, or con-
flict resolution, multiple stakeholders with overlapping and divergent interests
need to be brought together. Yet few of the institutions that currently exist are able
do that, particularly not at an international level; indeed, the very attempts often
lack legitimacy and create ill will. At the same time, non-profit organizations and
civil-society groups usually position themselves as an alternative to governments
rather than their partner.

What makes the IBJ model profound is the way it strives to go beyond these
artificial barriers—examples of “old solutions to new situations,” as Ms. Tse
expressed it in her essay. Instead, the IBJ method bridges the grassroots with the
highest levels of government, and speaks with authority to both. It bridges the local
community with the global one. IBJ is a model for how decentralized systems can
interact to form powerful communities for change.

In the past we honored the businesspeople that Schumpeter’s idea of the inno-
vator had in mind. As we reset our image for modern times, we can look back at
history to others who innovated for the social good, from slavery to suffrage to civil
rights. Their battle was not simply with an unjust system, but also with their peers
who failed to see that change was possible. It is something all pioneers face.
Whether the names of such leaders are etched in marble or lost to memories, to
this honored list must now be added Karen I. Tse and International Bridges to
Justice.

1. Joseph A. Schumpeter 1934: The Theory of Economic Development. An inquiry into Profits, Capital,
Credit, Interest, and the Business Cycle, Harvard University Press, Cambridge (Seventh printing,
1961).
2. Kenneth Neil Cukier 2006: “Hero with a Thousand Faces: Innovative Entrepreneurship and Public
Policy” Report of the 6th Annual Rueschlikon Conference on Information Policy, Swiss Re,
Zurich.

3. The Economist 2008: “Disruption of service.” London, Feb. 7.
4. Kofi Annan 2005: “Secretary-General’s Address to the Commission on Human Rights.” Geneva,
April 7. Online: http://www.un.org/apps/sg/sgstats.asp?nid=1388 (Last viewed May 15, 2007)

142

innovations / spring 2008

Downloaded from http://direct.mit.edu/itgg/article-pdf/3/2/135/704342/itgg.2008.3.2.135.pdf by guest on 07 September 2023
Download pdf