Why do Rulers Follow the Rule of Law? Thoughts on Trump, Erdoğan, and History

Post date: Jan 31, 2017 7:42:24 PM

It is astonishing how quickly the U.S. has been set on a path where the rule of law no longer exists as a cornerstone of governance. As Mark Koyama points out in an excellent post, American rule of law has proven to be way more fragile than what even experts on the subject thought possible. The ban on people from seven Muslim-majority countries entering the U.S. despite having valid green cards and work visas, along with the firing of the acting attorney general for defying an order she viewed as illegal seem like just the beginning. So how did it get to this? Is American rule of law really so fragile that it can be trampled upon so openly within a few weeks of a new presidency?

In my view, the rule of law exists when it precisely that – the law rules, and it rules for all. What this means in practice is that laws are not arbitrary, they are applied equally to all, and those imposing rules do so within the confines of the law. It is the last of these aspects that I wish to focus on here. Why do rulers in societies governed by the rule of law actually rule within the confines of the law? When their desires are contrary to the law, what is to prevent them from ruling as they wish?

These questions well pre-date politics in the era of Trump. Their answers are something I have long been interested in as an economic historian because I believe that they hold, in part, the keys to understanding where modern wealth comes from. Freedom from arbitrary rule for a broad swath of the population means that those people will have incentive to invest, trade, and more generally grow their wealth without the grabbing hand of the state taking anything more than its pre-specified cut (which may be a lot, but as long as everyone knows that going in they will be able to adjust their actions accordingly). The absence of the rule of law encourages the opposite; why should anyone except the ruler’s cronies try to enrich themselves if it is just going to make them a target of confiscation when the ruler is in a bind?

But this only answers why the rule of law affects economic outcomes. The far more important question, especially in the era of Trump, is why rulers follow the law in the first place. A famous (within economics circles) paper by Douglass North and Barry Weingast answered this question by arguing that a constitution will only promote the rule of law when it is self-enforcing. In other words, when all of the relevant players have incentive to follow the constitution’s dictates (i.e., follow the law), the rule of law will be followed. It is a nice argument (despite its detractors), and it certainly gives a sufficient condition under which the rule of law works. When there are a clearly delineated set of rules and everyone has incentive to follow them – due to the presence of checks and balances that actually have teeth – everyone will follow them. North and Weingast argue that it is a society’s institutions which delineate these rules and provide the sanctions for those who break the rules. That is, institutions provide the incentives for all of the key players to follow the law. I also buy this – the system of checks and balances in the U.S., for instance, is very much ingrained in U.S. political, legal, and even social institutions. And for the most part these institutions have served the U.S. well. Presidents from Washington to Obama tended to follow the law, and when they arguably failed to follow the law there was enough gray area where reasonable people could disagree whether what they were doing was legal (well, except maybe for Richard Nixon).

But just because these institutions worked pretty well in the past does not guarantee they will work in the future. What happens when someone comes to power via democratic election and wants to test the bounds of the rule of law, as I think it is pretty clear Trump is doing in his first two weeks in office? Here is where I think a more general framework, informed by history, for understanding political decision-making helps. And indeed, this is one of the primary themes of my forthcoming book. I think it is impossible to understand why rulers act the way they do without understanding the societal features that shape their incentives. As I mentioned in my last (and only!) post, the two primary ways that rulers stay in power are through coercion (i.e., the barrel of a gun) and legitimacy (i.e., subject believe the ruler has the right to rule).

Coercion is easy to understand: if someone controls all the guns, they can act as they please. Legitimacy is a little less obvious. What makes a ruler legitimate differs by society. For instance, in some societies religious legitimacy works well, in others it doesn’t. More generally, a society’s informal institutions, those that are shaped by the society’s beliefs, norms, ideologies, family structures, and culture, constrain the mechanisms a ruler can use to legitimize rule. In the U.S. (and most Western countries), a strong belief in democratic rule meant that ruling according to the rule of law is a powerful source of legitimacy: a president elected in a fair election who enacts laws and policies according to the law is likely to go unchallenged, at least with respect to the legitimacy of his presidency. As long as those informal institutions supporting democratically elected presidents are strong, the other formal institutions (e.g., Congressional oversight, an independent judiciary … those institutions that provide the checks on executive power) work pretty well to constrain the worst impulses of the president (or the populace). In other words, informal and formal institutions are complementary: formal institutions do not work well unless the appropriate informal institutions are working well. This is why presidents conventionally follow the rule of law. A president has incentive to follow and act consistent with beliefs supporting democratic norms because it is precisely those beliefs that got him into power in the first place (for the academics out there, this last sentence is very much a nod to Avner Greif).

Yet, to use the terminology of economics, this is an equilibrium outcome. This simply means that, given the actions of the other relevant players, none of the players we are concerned with has incentive to act any different. In other words, past presidents realized they might be constrained by the legislative or judicial branches, but this was part of the game; the game did not include an alternative set of rules where such constraints do not exist. But, again to use the terminology of economics, is it possible that there is another (multiple) equilibrium, one in which the old rules do not apply? If so, what would it look like?

If there is another equilibrium, it is key to understand that the old rules we are all used to applying do not necessarily apply. That is, the traditional set of checks and balances would be useless; a ruler who does not feel checked will not act as if they are checked. Can such an equilibrium really exist, especially in a country that has had a form of democracy for over two centuries? I believe that it can, and we need to go no further than contemporary Turkey to find a relevant example.

Murat Iyigun and I wrote a short piece in the wake of last summer’s failed coup detailing how we suspected President Recep Tayip Erdoğan would rule in the wake of the coup (and, sadly, I think we are being proven correct). Erdoğan came to power as a democratically elected Islamist, and he still is. His original source of legitimacy was largely democratic norms, a relatively new phenomenon to Turkey, existing since only the 1950s. He ran as an Islamist, but this was not his source of legitimacy – it was a policy preference of the voters (just like appeals to Christianity are not really a source of legitimacy in the U.S., but politicians make them because they win votes). Since 2010, however, Erdoğan has increasingly appealed to religious dictates and increasingly co-opted the religious establishment to legitimize his regime. Meanwhile, Erdoğan increasingly staffed the military and bureaucracy with loyalists, giving him access to the state’s coercive power. Combined, this gave Erdoğan the capacity to rule using what we called the “Ottoman blueprint” of religious legitimacy and military coercion as the two central pillars of rule. Such a blueprint largely ignores the rule of law (unless it suits the ruler), suppresses dissent, and undermines democratic norms. It is possible to rule this way in Turkey because its informal institutions permit it – especially the Turks’ long pre- Atatürk history of accepting religious legitimacy. While many Turks do not accept religion as a source of legitimacy, particularly in cosmopolitan cities such as Istanbul, a large enough share of the population accepts religious legitimacy to make it tempting for a wanna-be autocrat to employ.

A ruler like Erdoğan therefore may want to attempt to undermine democratic norms and the rule of law when two conditions hold. First, the ruler’s desired laws and policies must (mostly) not be achievable under the prevailing set of formal and informal institutions. If they are, and the ruler is in power due to democratic election, there would be no need to undermine the norms. Indeed, those norms would help him/her achieve their desires. Second, the ruler must have an alternative source of legitimacy and/or coercion. If it is democratic norms and the rule of law that originally provided the primary source of a ruler’s legitimacy, that ruler will not last long unless they have another means of staying in power. This is why Erdoğan has so far been successful in his transition to autocrat. He cultivated alternative sources of power – religious legitimacy, military loyalty, with a sprinkling of democratic legitimacy – that permitted him to undermine what got him to power in the first place.

Where does this leave us with respect to the U.S.? The optimistic take is that Trump is no Erdoğan. By this I mean, most importantly, that Trump does not have an obvious alternative source of legitimacy outside of democratic norms (and all that entails, including following the rule of law). It’s not just that Trump does not have religious legitimacy available to him – this is not really something that the informal institutions of the U.S. permit. It is more that Trump, from all I can tell, has not cultivated an alternative source of legitimacy. Granted, many of Trump’s supporters will support him no matter he does. But it would not take a large share of his current supporters eventually viewing him as illegitimate to embolden those working within the confines of the rule of law – i.e., the GOP establishment – to ouster him. I also see little chance that Trump co-opts the military, which would be one of the first steps in the playbook of an erstwhile autocrat. That said, Trump has already done incredible damage to the norms that uphold the U.S. political system, especially those based on the rule of law. I suspect the damage will only deepen the longer he is permitted to stay in office. Time will tell if the damage is irreversible, but on that front I am not optimistic. Culture and beliefs – those things so vital to our informal institutions – tend to be pretty sticky.