The Role of Law

Examines the role of law—the instrumental way through which groups and individuals in society use law as a means of promoting, enforcing, and institutionalizing interests or objectives. Like policy, law exists as a means by which governments codify rules about how individuals and firms should behave in order to achieve economic and social policy outcomes, particularly in the criminal, civil, and regulatory domains. Law leads to economic and social policy outcomes by (1) incentivizing behavior change through coercion or sanctions; (2) serving as a focal point for coordinating behavior; and (3) creating a culture of compliance. Law also plays the more foundational constitutive role of defining governance process and providing a means for citizens—nonelites—to challenge and contest the exercise of power. Attention to the microfoundations of laws’ effectiveness can help policy makers and citizens design laws and strategies more likely to achieve success. Spotlights how effective and equitable legal institutions emerge.