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Rule by law

Why Nations Fail: The Origins of Power, Prosperity, and Poverty

Rule by law describes the use of legal authority and procedure to advance or enforce the purposes of those who govern; it is not the same as the rule of law, under which law constrains the powerful and applies equally. The distinction turns on practice as much as formal rules: who can use legal remedies, whether officials and elites are bound by the same standards as others, and whether rights can be enforced against those in power.

Rule by Law and the Rule of Law

A government or legislature may pass a harsh law and invoke legal authority to enforce it. But legality alone does not make that arrangement the rule of law. In the account of the Black Act, the Whig elites could enact a repressive measure against people accused of obstructing their interests; nevertheless, the Glorious Revolution had established institutional constraints that made its implementation subject to resistance. The rule of law meant that laws could not be applied arbitrarily or selectively, and that neither elites nor ordinary people were above them.

The distinction was more than a difference in terminology. Under absolutist institutions, where political power belonged to the king and aristocracy, equal application of law was difficult to imagine: what the powerful permitted themselves could be forbidden to everyone else. The book instead links the rule of law to pluralistic institutions and broad political coalitions. When multiple groups have a voice and a share of political power, the principle that they should be treated fairly becomes politically meaningful—and the resulting legal constraints can bind those who govern.

Procedure, Access, and Unequal Enforcement

The 1724 prosecution of John Huntridge illustrates how procedure could limit the reach of a severe law. Huntridge, accused of aiding deer stealers and abetting people called Blacks, faced offenses punishable by hanging. The prosecution was initiated by the Regency Council of Lords Justices, dominated by Robert Walpole and William Cadogan; Walpole personally sought evidence from an informant. Yet, after a trial lasting eight or nine hours, the jury acquitted Huntridge, partly because of irregularities in the collection of evidence. The result was striking because the jurors were major landowners and members of the gentry, not Huntridge’s peers, and might have been expected to sympathize with Walpole.

The acquittal did not mean that the Black Act was harmless or uniformly defeated. Other people were hanged or transported to North America, and the law remained on the statute books until 1824. But Huntridge’s case showed that even a law designed to suppress resistance could encounter procedural and institutional limits. The account contrasts that constraint with the earlier Court of Star Chamber, which could act as an instrument of Stuart repression and could be shaped by monarchs removing judges whose decisions displeased them.

That contrast helps define rule by law: legal forms can serve the interests of rulers without genuinely limiting their power. Conversely, the rule of law requires more than the existence of statutes and courts. It requires that adjudication, procedure, and legal protections constrain powerful actors in practice, rather than merely furnishing instruments they can selectively deploy.

Remedies and the Protection of Power

The Mexican telecommunications example shows how a legal remedy designed to protect rights can be used to reinforce concentrated economic power. Carlos Slim built his position in an environment where entrepreneurs faced licensing costs, red tape, political obstruction, and difficulty obtaining finance. Exclusive contracts helped him secure a dominant position in telecommunications, including through Telmex, and expand into the rest of Latin America.

Challenges to Telmex’s dominance did not succeed. In 1996, long-distance provider Avantel asked the Mexican Competition Commission to determine whether Telmex held a dominant position. The commission concluded in 1997 that Telmex had substantial monopoly power in local telephony and national and international long-distance service, among other areas. Yet efforts by Mexican regulators to limit that power came to little. Telmex could invoke the recurso de amparo, or appeal for protection, to argue that a particular law did not apply to it. The remedy originated in the Mexican constitution of 1857 as a safeguard for individual rights and freedoms; in the hands of Telmex and other monopolies, it became a means of consolidating their position and a loophole in equality before the law.

The contrast between jurisdictions further shows why enforceable limits matter. In 1999, Slim’s Grupo Carso bought CompUSA. When Slim violated the terms of CompUSA’s franchise agreement with COC Services in Mexico, intending to establish his own competing chain, COC sued in a Dallas court. There was no comparable amparo available there, and Slim lost; the court imposed a $454 million fine. The episode contrasts a setting in which legal protections could be used to frustrate limits on monopoly power with one in which a court enforced the contractual rules against a powerful business actor.

Political Power, Property, and Participation

The same distinction applies to elected governments. Argentina held elections during periods of civilian rule, but the Perónist Party concentrated political power through a political machine that bought votes, distributed patronage, and exchanged government contracts and jobs for support. When Perón’s labor-movement base weakened under military repression in the 1970s and 1980s, the party turned to other voters. The system had elections but, in the book’s analysis, lacked pluralism and effective constraints on the governing party.

The account connects this concentration of power to the treatment of property rights. When President Menem faced a term limit in the 1990s, he rewrote the constitution to remove it. The Corralito later showed that an elected government could override property rights and expropriate citizens with impunity. The existence of elections and formal legal institutions, therefore, did not by itself ensure that political power was constrained or that citizens had reliable protection against it.

By contrast, the Tswana kgotla offers an example of participation limiting chiefly authority. Matters of tribal policy were discussed in an assembly of adult men, where anyone could speak; the chief and advisers could be challenged, and the assembly could overrule the chief’s wishes. This institution did not erase authority, but it made decision-making answerable to a wider group. Alongside the account of the Glorious Revolution, it demonstrates the article’s central distinction: law and institutions can either provide instruments for concentrated power or help distribute political voice and constrain those who hold it.