Rule of Law is the basic rule of society where all individuals and entities are equally subject to the supremacy of the written law.  This term emerged from the Anglo-Saxon ‘common law’ tradition, which required even the sovereign to be subject to the law. The rule of law is comprised of two parts: the constitution of a state providing the basis of its laws, but also includes a judicial system and citizens' rights. You know in advance whether your action is legal or not, i.e. the operation of the judicial system is not arbitrary. Upholding this rule of law is necessary for a sound economy.