The Master said, "If the people be led by laws, and uniformity sought to be given them by punishments, they will try to avoid the punishment, but have no sense of shame. If they be led by virtue, and uniformity sought to be given them by the rules of propriety, they will have the sense of shame, and moreover will become good." –The Analects

According to Confucius, why is being led by a good leader better than being led by laws?

People do not obey laws; they only obey leaders.
People want to avoid being punished by a good leader.
People do not feel shame when following a good leader.
People will follow not only a good leader’s rules, but also his example.