Rule of Law against the Odds: Overcoming Poverty and the High Cost of Compliance in the Developing World

The sociolegal compliance literature, which suggests that compliance is motivated by fear, duty, or social license pressure, relies on assumptions that are often specific to the developed world. Are developing world conditions, including low state capacity, not conducive to regulatory compliance? Along the open India–Nepal border, I examine variation in compliance with wood‐taking regulations in contiguous conservation areas located in different countries. I find that widespread poverty, which makes the cost of compliance for large swaths of the population extraordinarily high, significantly reduces compliance rates. I go on to show that there are policies that even cash‐strapped, weakly‐institutionalized states can adopt that make compliance more affordable. These policies, and the resulting programs, are associated with much higher levels of compliance.