Published by Encyclopedia of Law and Economics
This entry explores the role of the rule of law in a market economy. The emergence of the rule of law is a precondition of not only political and economic liberty but also economic growth and overall human progress. The presence, or lack thereof, of the rule of law determines whether human interaction will be positive-sum or negative-sum in nature. We explore first the fundamental attributes to the rule of law in relation to property rights and entrepreneurship. Second, we discuss in detail three attributes to the rule of law that generate this productive entrepreneurial process: (1) generality, (2) predictability, and (3) equality.