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.