India no longer gets an easy ride as the world's largest democracy. Spectacular terrorist attacks on its Parliament and places of worship, communal riots of unprecedented ferocity, lingering separatist insurgency and violent caste conflict in impoverished regions have combined to cause a closer appraisal of India's capacity to sustain the rule of law. This book shows how the processes and power of governance are strong when people follow the rules of transaction, derived from binding custom, legislation, administrative practices or the constitution. The key question that underpins this analysis is why do some people sometimes follow rules and not others? This study finds answers to this central question by looking at analytical narratives of governance in six Indian regional states, surveys of social and political attitudes and in-depth interviews with regional elites. It shows how, by drawing on the logic of human ingenuity, driven by self-interest rather than mechanical adherence to tradition and ideology, political elites can design institutions and practices that enhance governance.