The institutional technologies needed to sustain the rule of law, such as systems of property rights, corporate governance structures and judicial systems, are relatively well-known but most developing countries have proven resistant to the rule of law and good governance in general. This paper addresses the paradox through a framework that divides today’s societies into two different types of social orders: (1) the natural state, which solves the problem of violence through rent-creation and granting powerful individuals/groups valuable rights and privileges so that they have incentives to cooperate rather than fight, and (2) the open-access state, which relies on competition, open access to organizations, and institutions to control violence, and is characterized by rent-erosion and long-term economic growth. Most developing countries fall within the first category and the paper argues that such states cannot create the rule of law by simply adopting certain institutions and government structures of open-access states. Instead, natural states must begin a complete transition to open-access orders. The transition is partly institutional and involves the creation of institutions to establish the law and a set of credible commitments that protect them. Such a transition ensures that political actors have an incentive to honor constitutional rules, which in turn ensures that, to exist, state institutions are independent of those who create them. Historically, the shift from limited to open access orders has proven difficult and only a little over two dozen states have succeeded in the transformation, with most clustered in Europe.