Chapter 2 presents the book’s theory of wartime institutional change, which accounts for why civil war is a site of institutional transformation, conceptualizes different wartime institutional logics, and elaborates the causal process through which undermining rules evolve amid conflict. It argues that the perceived escalation of the insurgent threat within civil war unsettles prevailing institutional arrangements and empowers political and military elites who, as the architects of counterinsurgency, possess high levels of decision-making discretion. Under the pretext of combatting the “internal enemy,” this counterinsurgent elite introduces alternative rules of the game, which correspond to its narrow interests. The latter half of the chapter tackles why undermining rules persist within and beyond conflict. Where counterinsurgent leaders can knit together a broader set of interests with a stake in the wartime procedures and successfully co-opt new peacetime political and economic spaces, the undermining rules are more likely to survive. By contrast, shifting postwar elite alignments generate chronic instability, disrupting the institutional status quo.