Skip to content
Licensed Unlicensed Requires Authentication Published by De Gruyter July 8, 2017

Profit, Persuasion, and Fidelity: Why People Follow the Rule of Law

Michael Ilg EMAIL logo

Abstract

This article proposes that there are three types of individual interest perception that explain adherence to the rule of law. The first level, “profit,” refers to tangible individual gain, whether in the form of economic enrichment or the accumulation of political power. The second layer of interest, “persuasion,” involves social norms and reputation. In this second level, individuals adhere to a rule not because of the threat of government sanction or reward, but rather because of intangible concerns for reputation and social status. Finally, the third layer of interest involves individuals forgoing tangible benefit for the sake of fidelity to a constitutional order or a shared set of beliefs. A potential advantage of the three-interest view is that it provides for an accessible descriptive framework that captures the broad nature of the rule of law, moving from the small bribe for a local official to the question of whether a constitution will constrain the powerful. The three-interest view also aligns well with modern developments in experimental and behavioural economics and suggests future lines of research into how individuals and groups navigate from self-interest toward cooperation and fidelity.

References

Abbot, K.W. and D. Snidal, Values and Interests: Legalization in the Fight against Corruption, 31 Journal of Legal Studies (2002).10.1086/342006Search in Google Scholar

Banerjee, A.V. and E. Duflo, The Experimental Approach to Development Economics, 1 Annual Review of Economics (2009).10.3386/w14467Search in Google Scholar

Bardhan, P., Corruption and Development: A Review of Issues, 35 Journal of Economic Literature (1997).10.4324/9781315126647-30Search in Google Scholar

Breen, T.H., George Washington’s Journey (New York: Simon & Schuster, 2016).Search in Google Scholar

Carothers, T., “The Rule of Law Revival”, in T. Carothers (ed.), Promoting the Rule of Law Abroad: In Search of Knowledge (Washington, DC: Carnegie Endowment for Peace, 2006).Search in Google Scholar

Chubb, J.E., The Political Economy of Federalism, 79 American Political Science Review (1985).10.2307/1956245Search in Google Scholar

De Soto, H., The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books, 2003).Search in Google Scholar

Ellickson, R.C., Of Coase and Cattle: Dispute Resolution among Neighbors in Shasta County, 38 Stanford Law Review (1986).10.2307/1228561Search in Google Scholar

Fisman, R. and E. Miguel, Corruption, Norms, and Legal Enforcement: Evidence from Diplomatic Parking Tickets, 115 Journal of Political Economy (2007).10.1086/527495Search in Google Scholar

Ginsburg, T., Does Law Matter for Economic Development? Evidence from East Asia, 34 Law & Society Review (2000).10.2307/3115145Search in Google Scholar

Gneezy, U. and A. Rustichini, A Fine Is A Price, 29 Journal of Legal Studies (2000).10.1086/468061Search in Google Scholar

Hart, H.L.A., Positivism and the Separation of Law and Morals, 71 Harvard Law Review (1958).10.2307/1338225Search in Google Scholar

Hart, H.L.A., The Concept of Law (2nd ed., Oxford: Oxford University Press, 1994).Search in Google Scholar

Inman, R.P. and D.L. Rubinfeld, Rethinking Federalism, 11 Journal of Economic Perspectives (1997).10.1257/jep.11.4.43Search in Google Scholar

Jayasuriya, K., “Introduction: A Framework for the Analysis of Legal Institutions in East Asia”, in K. Jayasuriya (ed.), Law, Capitalism, and Power in Asia (London: Routledge, 1999).Search in Google Scholar

Johnson, P., George Washington: Founding Father (New York: Harper-Collins, 2005).Search in Google Scholar

Kaufmann, D., et al., Governance Matters IV: Aggregate and Individual Governance Indicators, 1996–2004, World Bank Policy Research Working Paper No.3630 1 (2005).Search in Google Scholar

Klitgard, R.E., Controlling Corruption (Berkeley: University of California Press, 1988).10.1525/9780520911185Search in Google Scholar

Leff, N.H., Economic Development Through Bureaucratic Corruption, 8 American Behavioral Scientist (1964).10.1177/000276426400800303Search in Google Scholar

Lovett, S., et al., Guanxi versus the Market: Ethics and Efficiency, 30 Journal of International Business Studies (1999).10.1057/palgrave.jibs.8490068Search in Google Scholar

Marshall, J.M., National Treasure, 23 The New Yorker (May 2005).Search in Google Scholar

McKean, M.A., “Management of Traditional Common Lands (Iriaichi) in Japan”, in D. Bromley (ed.), Making the Commons Work (San Francisco: ICS Press, 1992).Search in Google Scholar

Oates, W.E., Toward a Second-Generation Theory of Fiscal Federalism, 12 International Tax and Public Finance (2005).10.1007/s10797-005-1619-9Search in Google Scholar

Ostrom, E., Governing the Commons: The Evolution of Institutions for Collective Action (Cambridge: Cambridge University Press, 1990).10.1017/CBO9780511807763Search in Google Scholar

Ostrom, E., “Rudiments of a Theory of the Origins, Survival, and Performance of Common-Property Institutions”, in D. Bromley (ed.), Making the Commons Work (San Francisco: ICS Press, 1992).Search in Google Scholar

Peerenboom, R., Social Networks, Rule of Law and Economic Growth in China: The Elusive Pursuit of the Right Combination of Private and Public Ordering, 31 Global Economic Review (2002).10.1080/12265080208422890Search in Google Scholar

Perry, A., The Relationship between Legal Systems and Economic Development: Integrating Economic and Social Approaches, 29 Journal of Law & Society (2002).10.1111/1467-6478.00219Search in Google Scholar

Qian, Y. and B.R. Weingast, Federalism as a Commitment to Preserving Market Incentives, 11 Journal of Economic Perspectives (1997).10.1257/jep.11.4.83Search in Google Scholar

Quah, J.S.T., Controlling Corruption in City-States: A Comparative Study of Hong Kong and Singapore, 22 Crime, Law & Social Change (1995).10.1007/BF01302927Search in Google Scholar

Rodden, J. and S. Rose-Ackerman, Does Federalism Preserve Markets?, 83 Virginia Law Review (1997).10.2307/1073767Search in Google Scholar

Rodrik, D., et al., Institutions Rule: The Primacy of Institutions over Geography and Integration in Economic Development, 9 Journal of Economic Growth (2004).10.3386/w9305Search in Google Scholar

Rose Ackerman, S., Corruption: A Study in Political Economy (New York: Academic Press, 1978).10.1016/B978-0-12-596350-3.50005-3Search in Google Scholar

Rose-Ackerman, S., “Reducing Bribery in the Public Sector”, in D.V. Trang (ed.), Corruption & Democracy: Political Institutions, Processes and Corruption in Transition States in East-Central Europe and in the Former Soviet Union (Budapest: Institute for Constitutional & Legislative Policy, 1994).Search in Google Scholar

Rose-Ackerman, S., Corruption and Policy Reform, 444 Yale L.& Economics Research Paper (2012).10.1017/CBO9781139600484.013Search in Google Scholar

Shapiro, S.J., “The Bad Man and the Internal Point of View”, in S.J. Burton (ed.), The Path of the Law and Its Influence: The Legacy of Oliver Wendell Holmes, Jr.(Cambridge: Cambridge University Press, 2000).Search in Google Scholar

Shapiro, S.J., What Is the Internal Point of View?, 75 Fordham Law Review (2006).10.2139/ssrn.937337Search in Google Scholar

Tanzi, V., The Future of Fiscal Federalism, 24 European Journal of Political Economy (2008).10.1016/j.ejpoleco.2008.03.001Search in Google Scholar

Tiebout, C., A Pure Theory of Local Expenditures, 64 Journal of Political Economy (1956).10.1086/257839Search in Google Scholar

Trebilcock, M.J. and R.J. Daniels, Rule of Law Reform and Development (Cheltenham: Elgar, 2008).10.4337/9781848442979Search in Google Scholar

Trebilcock, M.J. and M.M. Prado, Law and Development (Cheltenham: Elgar, 2014).Search in Google Scholar

Tullock, G., “Rent-Seeking as a Negative-Sum Game”, in J.M. Buchanan (ed.), Toward a Theory of the Rent-Seeking Society (Austin: University of Texas Press, 1980).Search in Google Scholar

Weingast, B.R., The Role of Political Institutions: Market-Preserving Federalism and Economic Development, 11 Journal of Law and Economics Organic (1995).Search in Google Scholar

Williams, T., Requiem for Microcredit? the Demise of a Romantic Ideal, 19 Banking & Finance Law Review (2004).Search in Google Scholar

Xin, K.R. and J.L. Pearce, Guanxi: Connections as Substitutes for Formal Institutional Support, 39 Academy of Management Journal (1996).10.5465/257072Search in Google Scholar

Yeung, I.Y.M. and R.L. Tung, Achieving Business Success in Confucian Societies: The Importance of Guanxi (Connections), 25 Organizational (1996).10.1016/S0090-2616(96)90025-XSearch in Google Scholar

Zakaria, F., The Rise of Illiberal Democracy, 76 Foreign Affairs, no. 6 (November/December 1997).10.2307/j.ctt2005tk7.20Search in Google Scholar

Published Online: 2017-7-8
Published in Print: 2017-9-26

© 2017 Walter de Gruyter GmbH, Berlin/Boston

Downloaded on 9.12.2022 from https://www.degruyter.com/document/doi/10.1515/ldr-2017-0015/html
Scroll Up Arrow