In Europe there is wide agreement that the rule of law â€“ along with democracy and fundamental rights â€“ is one of the core concepts of contemporary legal orders. According to Article 2 of the Treaty on European Union (TEU), respect for the rule of law is one of the values on which the European Union (EU) is founded and which is â€˜common to the Member States. It is seen as â€œthe backbone of any modern constitutional democracyâ€�, and as such one of the EUâ€™s ideological building blocks. Moreover, advancing the rule of law, democracy and fundamental rights can be described as part of the EUâ€™s raison dâ€™Ãªtre. Absent from the original Treaties, the rule of law gradually appeared in the realm of EU law and the text of the Treaties. Today, the rule of law has evolved into a â€˜constitutional principleâ€™ of the EU and plays an important role in different areas of EU law. According to Article 49 TEU, the rule of law is a prerequisite for the accession of new Member States (MS). Articles 7 and 2 TEU give legal expression to the presumption that current EU Member States respect and observe the values listed in Article 2 TEU. Lately, however, the political situation in some Member States has made prominent that there are deficiencies with respect to the rule of law so grave that their conformity with basic EU standards is seriously questioned. The fall of the Berlin Wall in 1989 marked the demise of communism in Central and Eastern Europe (C&EE) and left behind an institutional vacuum .This unique opportunity to build new political, economic, legal and social systems sparked an old debate about the relationship between law and development. Institutions, in particular the rule of law, have taken centre stage in the rhetoric of law and development scholars and in policy programmes of international institutions. The rule of law has not only become a condition for financial aid packages, but is moreover condition for membership of â€˜exclusive clubsâ€™ such as the EU. However, making accession conditional on the rule of law is problematic. The vague nature of the concept raises questions not only regarding the practicability of using the rule of law as a measure, but also regarding the efficiency and effectiveness of conditionality as a tool for legal reform. This thesis examines the effectiveness of the rule of law as condition for EU accession. It evaluates the effectiveness of rule of law reform, in particular in connection with the impact of external influences on the process of legal change in the context of EU accession and transition in post-communist countries. The research question is: how effective is the rule of law concept as condition for EU accession? By analysing the EU rule of law conditionality through the lens of New Institutional Economics (NIE) in the context of law and development studies, the research provides a new synthesis of existing theories to lend insight into processes of legal reform and institutional change. The study expands our understanding of the role conditionality plays as an incentive in the processes of EU accession and its adequacy to strengthen the rule of law. In this research, a novel multi-dimensional model of the rule of law was developed. The model provides predictions about rule of law reform in new EU Member States and aspiring Member States. It has also wider implications for a wider range of countries in the developing world which embark on externally driven rule of law reform.