Judiciary

1
Judiciary

• Analysis is a bit different than usual because
  judges have atypical incentives.
• If judges are shielded from economic and
  political influences, then their welfare is
  unaffected by the way they decide cases.
• Intrinsic values and beliefs matter.
• So too does the nature of their decision problem.

2
Judicial Independence and Politics

• Private bargaining is facilitated by a
  trustworthy, consistent judiciary.
• Legislative bargaining is also facilitated by an
  independent judiciary.
• Empirical studies suggest that constitutional
  amendments substitute for judicial independence.

3
Is Legislative Intent an oxymoron?

• 3 paradigms of legislation
• 1. Arena for interest group politics (bargaining)
• 2. Arena for social choice (Arrow)
• 3. Leviathan--bureaucracy as dominant interest
  group (Niskanen)

4

• Legislative intent makes sense under first
  paradigm using contract and market concepts.
  Court can look at history of bargain, groups
  supporting, contributions, etc., to determine
  interest.

5

• Under second paradigm, legislative intent is
  nonsense. It may be possible to explain how
  legislation was passed, but outcomes cannot be
  cloaked in mantle of collective preference.
• Arrow Legislature cannot intend anything!

6
How Many Judges?

• Observation Number of judges on panel increases
  with the authority of the court.
• Is this efficient?
• Answer depends on what you think judges do.

7

• One alternative judges form opinion about best
  law by whatever standard.
• Arrow suggests a preference aggregation problem
  and intransitivities. Very bad outcome.

8

• Another view judges make 0/1 decision--is law
  consistent with precedent or not.
• Now increasing numbers makes sense since
  enlarging the panel increases the likelihood that
  it will arrive at the right answer.
• Existence of objective reality is important to
  this view.

9
Efficient Common Law

• Judges adjust laws over time. Will these
  adjustments lead to efficiency?
• Economic analysis of common law suggests much
  efficiency (e.g., contract and property).

10

• Interesting that judges seldom mention efficiency
  in decisions. Is there an invisible hand pushing
  judges toward efficiency?
• Economists have searched for ways that litigation
  increases efficiency.

11

• Litigation shares many features of a market. It
  is an investment, it is competitive, and it
  reallocates value.

12

• Inefficient laws cause more litigation than
  efficient ones, so they are examined more
  frequently (e.g., under-precaution).
• Disputes caused by inefficient laws are more
  difficult to settle than ones caused by efficient
  laws (e.g., vague laws).

13

• Winners win more than losers lose from correcting
  inefficiency, so money spent challenging an
  inefficient law exceeds money spent defending it.
• Judges are part of society and embody social
  mores.

14
Judicial Bargaining
Civil Rights
Case Property Rights
State Power
D gt P
P gtgtgt D
D gt P
Liberal
D gt P
P gtgtgt D
D gt P
Libertarian
P gtgtgt D
Conservative
D gt P
D gt P
15

• With no bargaining, D wins all 3.
• With bargaining, P wins all 3.
• Bargaining restores efficiency.
• Evidence that bargaining occurs in U.S.