Is Rule of Law an Equilibrium Without Private Ordering?

Abstract

The idea that law is fundamentally about government is pervasive in both theoretical and pragmatic work on the rule of law. We have challenged that idea in a series of papers beginning with Hadfield and Weingast (2012). In the original what-is-law paper, we propose that legal orders are characterized by centralized classification of behaviors but not necessarily by centralized enforcement by a comprehensive coercive authority. We show in that work that the distinctive attributes of legality and the rule of law generally articulated by legal philosophers--such as generality, common knowledge, neutrality, and stability--are equilibrium characteristics generated in an environment in which enforcement relies entirely on coordinating and incentivizing ordinary individuals to participate in decentralized punishment. In this paper we explore the corollary: will a regime that relies exclusively on centralized enforcement display legal attributes in equilibrium? We argue that, relieved of the necessity of incentivizing and coordinating decentralized punishment--a form of private ordering--a regime will not reliably achieve an equilibrium legal order characterized by legal attributes.