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.