Privatizing Law: Is Rule of Law an Equilibrium without Private Ordering?

Abstract

Almost all theorizing about law, including the rule of law, begins with government. Analysts from a wide variety of perspectives make this presumption. We contest this presumption. In this paper, we ask whether rule of law is an equilibrium in the absence of private ordering. To address this question, we rely on the what-is-law model of Hadfield and Weingast (2012). Most legal theory has asserted that legal attributes are characteristic of legal orders, such as generality, clarity and neutrality. In contrast, we show that they can be derived from a minimal normative premise about what constitutes law in a setting where all enforcement is decentralized and private. That premise is that anything we want to productively define as law must, at a minimum, have the capacity deliberately to adapt the content of the rules without disrupting equilibrium. We then consider whether a regime that has the capacity deliberately to adapt the content of rules but is not dependent on private enforcement must implement the rule of law in order to secure equilibrium. We argue that it does not. We end with some implications for building rule of law in the poor and developing countries around the world that lack productive legal order.