A Theory of Equality Before the Law∗
A Theory of Equality Before the Law Daron Acemoglu Alexander Wolitzky MIT MIT September 11, 2020 Abstract We propose a simple model of the emergence of equality before the law. A society can support effort (“cooperation”, “pro-social behavior”) using the carrot of future cooperation or the stick of coercive punish- ment. Community enforcement relies only on the carrot and involves low coercion, low inequality, and low effort. A society in which elites control the means of violence supplements the carrot with the stick, and involves high coercion, high inequality, and high effort. In this regime, elites are privileged by both laws and norms: because they are not subject to the same punishments as non-elites, norms are also more favorable for them. Nevertheless, it may be optimal– even from the elites’perspective– to establish equality before the law, where all agents are subject to the same coercive punishments and norms are more equal. The key mechanism is that equality before the law increases elites’effort, which improves the carrot of future cooperation and thus encourages even higher effort from non-elites. Equality before the law combines high coercion and low inequality. Factors that make equality before the law more likely to emerge include limits on the extent of coercion, greater marginal returns to effort, increases in the size of the elite group, greater political power for non-elites, and under some additional conditions, lower economic inequality. Keywords: rule of law, social norms, repeated games, community enforcement, coercion, inequality. JEL Classification: D70, P16, P51, K10, C73. We thank Bob Gibbons, Gillian Hadfield, Rachel Kranton, Suresh Naidu, Jean Tirole, John Wallis, the anonymous referees, and seminar participants at Georgetown, MIT, Northwestern, the 2018 NBER Organizational Economics meetings, and the 2019 CIFAR Institutions, Organizations, and Growth meetings for useful discussions and comments.
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