Glossary term
Rule of Law
Subject: Governance, Public-Sector and Institutional Governance
The rule of law is the principle that everyone, including government and officials, is bound by laws that are publicly known, applied equally and enforced by independent courts, instead of by arbitrary personal power.
Explanation
Several features are usually listed. Laws are clear, public and stable enough to be followed. They apply to rulers as well as citizens. Courts and judges are independent, and anyone can bring a dispute before them. Rights, property and contracts are protected, and the state may use force only as the law allows. Different bodies, such as the UN and the World Justice Project, state the elements in somewhat different words, and scholars debate whether the term should include human rights. It is not the same as rule by law, where a government uses statutes as a tool to control people without being bound by them. For compliance and governance, the rule of law is the base on which everything else rests. Contracts can be enforced, regulators can sanction, whistleblowers can seek protection and corruption can be prosecuted only where the legal system is predictable and fair. Investors and lenders weigh it when deciding where to operate. Rules without impartial enforcement constrain nobody.
Example
A foreign manufacturer deciding where to build a plant compares two countries. In the first, contracts are enforced by courts that rule against the government when it breaks them. In the second, licences are cancelled without explanation and judges are seen as influenced by officials. It builds in the first, and records the legal risk in its assessment.
Not to be confused with
- Rule by law
- Rule by law uses legislation as an instrument of control. Rule of law also binds the government itself to the same legal limits.