This week’s Law and Economics Workshop featured Professor Matthew Stephenson and his paper, Judicial Review and Democratic Failure (co-written with Professor Justin Fox), available at http://www.law.uchicago.edu/node/2618.
What It’s About
Suppose a society wants its politicians to vote in a way that reflects voter preferences faithfully. In this supposed world, much like in the real world, there is a mix of competent and incompetent politicians. Incompetent politicians vote for an “ordinary” policy 100% of the time, knowing that an ordinary policy is right for the situation most of the time. But once in a while, an extraordinary situation comes up. Competent politicians will recognize such situations and adjust by adopting extraordinary policies. Incompetent politicians won’t adjust and continue backing the ordinary policy.
Sadly, this state of the world can’t last long. Voters will catch on that competent politicians come up with all the “extraordinary” policies while the incompetent ones don’t, and this will tempt incompetent politicians to masquerade as competent politicians by coming up with deviant policies of their own. Pretty soon, voters won’t be able to tell which of the unusual policies are actually good ideas. Is there anything the judiciary can do to sift out the good from the bad?
Professor Stephenson’s model offers a few predictions: Judges will be passive (i.e., defer to the legislature in everything) if the probability of incompetent politicians proposing extraordinary policies is below a certain threshold. Judges will be strict (i.e., strike down all extraordinary policies) if the probability of incompetent politicians proposing extraordinary policies is above a certain threshold. In the interval in between the thresholds, judges exercise their own judgment. The size of this zone of “judicial activism” can increase based on the judge’s belief in his/her own competence. Judge Hercules, confident in his ability to distinguish between right and wrong, will have a wider interval where he believes he can maximize payoffs by exercising his judgment. Judge Socrates, on the other hand, wise only to the extent that he realizes he knows nothing, defers to the legislature’s expertise most of the time, so he has a narrower interval.
But the really interesting part happens when politicians and voters begin reacting to judges’ decisions. Will politicians treat judges as a “bailout” plan? Politicians may pick bad shortsighted policies, knowing that they can capture the short-term popularity gains while relying on judges to save them from the long-term consequences. Will voters take their support away from politicians that are always getting their policies struck down? Judicial disapproval can signal incompetence and give “legitimation” incentives for politicians to refrain from proposing bad policies. Because Professor Stephenson’s model is abstract, it is an open question whether the bailout effect would outweigh the legitimation effect. If the bailout effect is stronger, having competent judges may actually exacerbate the problem of democratic failure: politicians may feel liberated enough to pick bad but popular policies, knowing that judges are competent enough to provide a safety net, but the public may face a net loss because the rate at which politicians introduce bad policies may outweigh the rate at which judges can correct them.
What Was Discussed
Several workshop participants questioned what relevance the model had to actual judicial behavior. Some noted that the judges in this model are acting more like a Council of Revision or another political agent, rather than as a structural check. One participant elaborated that judges in our system are probably not concerned about democratic slippage; it seemed more probable, to him, that judicial review serves the function of protecting minorities from the tyranny of the majority and preserving the outer bounds of what is constitutionally permissible. If judges only exercise independent review in such situations (where the whole point of judicial review is to be antimajoritarian), then it would follow that Professor Stephenson’s model (where judges are exercising independent review in order to uphold majoritarian preferences) would apply to a null set of situations. Professor Stephenson acknowledged that his model does not account for judicial behavior where judges are being governed by constitutional/structural/legal rather than political considerations. However, he contended that many scholars are of the opinion that the judiciary acts like a policymaking agent, and to the extent that it does, his model is relevant.
Another set of comments explored whether the standard of judicial review or predetermined constraints on permissible reasoning might impede the judiciary’s ability to signal to the public that a policy is stupid. For example, a judge who upholds a law under rational basis review may reveal less to the public about the merits of a policy than a judge who upholds the law under strict scrutiny. Another example: if a predetermined ordering schema requires the judge to decide on issue A before reaching issue B, the public will get limited information about issue B’s merits (e.g., if the case is dismissed on jurisdictional grounds, or if the analysis on issue B is path-dependent based on how the judge decides issue A).
The discussion concluded with Professor Stephenson’s description of what kind of end result one could expect from his model. He raised the possibility that his model does not settle on a stable equilibrium state, because politicians adjust to judges. This may result in cyclical shifts (if judges are passive, incompetent politicians will be emboldened to introduce more deviant policies; if judges respond by becoming active, incompetent politicians adjust again and introduce fewer deviant policies; judges adjust again and become passive, etc.), or it may result in “rational unpredictability” where some level of randomization in judicial outcomes (whether intentional or natural) serves a socially useful purpose by maintaining an equilibrium.
At least for me, the model made a lot of sense in theory; the results are intuitive, and the reasoning seems consistent and easy to follow. The difficult part was in staring hard enough at the model to recognize the real world in it, and I still struggle to see it.
First, it seems strange to define competent and incompetent judges based on how well they identify correct policy choices. While judges probably do have to make policy judgment calls, it’s hard to say if that’s what society values about the judicial role. In other words, what if smart judges aren’t always the ones who exercise their judgment? What if smart judges tend to defer? What if competent judges are more concerned about fit and justification, navigating within boundaries and making workable precedent for the long run, than in the outcome of the average case? If that’s what judges care about, and that’s what voters (or at least the sophisticated interest groups that have the greatest incentive to disseminate the information to voters) expect, then the judge’s ability to communicate clues to the public about the politician’s competence may be very limited.
Second, competent and incompetent politicians aren’t discrete, and neither are good and bad policies. It may be that the competent politician’s job isn’t so much to pick the best policy that matches the situation, but to create suboptimal policy compromises that allow a politically diverse nation to get along. If any given bill requires a coalition of competent and incompetent politicians to pass, there may be too much noise in the system for voters to recognize a pattern of competence or incompetence.
Several workshop participants seemed sympathetic to the need to limit the model’s variables—one needs to cut out the noise to observe a useful phenomenon. Yet others remained skeptical on whether the fundamental assumptions of the narrow model are realistic enough for the model to say something true about the real world. As the paper develops, hopefully it will become clearer what a simple political model has to tell us about a complex legal world.