This entry explores the connection between the rule of law and economic performance. First, we analyze the role of interjurisdictional competition, and how the rule of law emerged as a by-product of this competitive process, initially in Western Europe. Second, we discuss the role of intrajurisdictional competition between interest groups, which reinforced the emergence of the rule of law within states. Finally, we discuss the mechanism by which the rule of law successfully or unsuccessfully became established in Western offshoots, particularly in Africa and the Americas, affecting the long-term economic performance of these areas.