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Judicial Review as a Response to Political Posturing
Abstract
We use an agency model to analyze the impact of judicial review on the incentives of elected leaders to “posture” by enacting bold but ill-advised policies. We find that judicial review may exacerbate posturing by rescuing leaders from the consequences of unwise policies, but may also discourage posturing by alerting voters to unjustified government action. We further find that judges will defer to the decision of elected leaders unless posturing is sufficiently likely. We then show how judicial review affects voter welfare, both through its effect on policy choice and through its effect on the efficacy of the electoral process in selecting leaders. We also analyze how the desirability of judicial review is affected by characteristics of the leaders and the judges.
... In addition to our paper, some other papers also consider institutional checks and balances. Fox and Stephenson (2011) is closest to ours. They examine the effect of judicial review on political decisions as our paper does, especially by focusing on a political leader's incentive to posture, which is similar to anti-pandering. ...
... We also argue that the separation of powers has the static correction effect and the dynamic replacement effect on social welfare, and show that the correction effect is always positive, while the replacement effect can be negative in the sense that the separation of powers can lower the probability that a competent politician is elected, especially when the legal sanction is harsher. In Fox and Stephenson (2011), the correction effect can be either positive or negative, because they assume that the judge has a noisier signal than the competent politician unlike in our model. ...
... Besides Fox and Stephenson (2011), Fu and Li (2014) also investigate the effect of institutional checks and balances on a politician's incentive to posture when she is subject to reputation concerns. However, they consider the case that the institutional overseer commits to a rule ex ante, whereas Fox and Stephenson (2011) and our paper consider the case that the overseer strategically decides ex post whether to uphold or strike down a politician's decision. ...
In this paper, we show that a politician has an incentive of anti-pandering behavior to look competent and that anti-pandering not only prevents an efficient policy choice but also increases the possibility that the incompetent one is re-selected. Our main focus in this paper is to consider the separation of powers as a remedy to prevent anti-pandering behavior. We show that the separation of powers itself encourages anti-pandering rather than discourage it due to the bailout effect, but the judicial power can reduce anti-pandering by increasing the size of the sanction, although it cannot eliminate it completely. We also argue that the separation of powers has the correction effect and the replacement effect on social welfare, and show that the correction effect is always positive, while the replacement effect can be negative in the sense that the separation of powers can lower the probability that a competent politician is elected, especially when the legal sanction is harsh enough to discourage anti-pandering thereby dispensing with a separating equilibrium.
... For a variety of reasons, we might question both the motivations and ability of courts to strike unconstitutional laws (Helmke 2005). Furthermore, the threat of review may fail to induce legislatures and executives to act constitutionally (Vanberg 2001;Fox and Stephenson 2011). Notably, many of these theoretical arguments demonstrate how variation in the process of judicial review affects both the judicial and legislative behavior and their normative implications for constitutional review (Elkins, Ginsburg and Melton 2016;Krehbiel 2016;Vanberg 2001) It is difficult to empirically interrogate these theoretical accounts due to data limitations. ...
... In them, purely policy-focused legislators should strategically only pass laws that can withstand judicial review, and therefore be judged constitutional by the court. But, as Fox and Stephenson (2011) show, legislators that are not exclusively policy-focused may adopt more unconstitutional laws in anticipation of judicial review than they would otherwise. The electoral incentive to pass laws that may be reversed can exceed the policy-based incentive to pass laws that are not reversed. ...
... 3 The standard purely policy-motivated veto player model predicts no relationship or reversals happening more often with post-implementation review. A theoretical generalization of Fox and Stephenson (2011) that incorporates time till review, Ward and Gabel (2019, henceforth "W-G"), predicts reversals to happen more frequently under preimplementation review. This evidence allows us to draw inferences about how judicial review influences the legislative process, and, in particular, the likelihood of a legislature to produce unconstitutional law. ...
A growing theoretical literature identifies how the process of constitutional review shapes judicial decision-making, legislative behavior, and even the constitutionality of legislation and executive actions. However, the empirical interrogation of these theoretical arguments is limited by the absence of a common protocol for coding constitutional review decisions across courts and time. We introduce such a coding protocol and database (CompLaw) of rulings by 42 constitutional courts. To illustrate the value of CompLaw, we examine a heretofore untested empirical implication about how review timing relates to rulings of unconstitutionality (Ward and Gabel 2019). First, we conduct a nuanced analysis of rulings by the French Constitutional Council over a 13-year period. We then examine the relationship between review timing and strike rates with a set of national constitutional courts in one year. Our data analysis highlights the benefits and flexibility of the CompLaw coding protocol for scholars of judicial review.
... 5 In contrast, our argument 5. More generally, previous work has highlighted how oversight impacts incentives for politicians to pander in electoral settings (Fox and Stephenson 2011) or to acquire information (Dragu and Board 2015), and induces more ideologically desirable policy (Wiseman 2009), as well as the invaluable insight provided by previous work examining signaling dynamics and their effect on substantive policy choice (see, e.g., Boehmke et al. 2006;Carpenter and Ting 2007;Gailmard andPatty 2007, 2013a; Krehbiel 1987, 1989;Gordon and Hafer 2005;Patty 2009;Stephenson 2006;Ting 2008). Finally, see Bueno de Mesquita and Stephenson (2007), Stephenson (2006) and Turner (2017b) for recent work that highlights the ways in which oversight impacts effort incentives. ...
... This deterrence effect is qualitatively similar to the "bail out effect" provided by judicial review identified in previous theoretical work (e.g. Bueno deMesquita and Stephenson 2007;Fox and Stephenson 2011;Turner 2017b). ...
We develop a theory of policymaking between an agent and an overseer, with a principal whose welfare is affected by agent-overseer interactions. The agent can increase the quality of policy outcomes through costly capacity investments. Oversight and agent bias jointly determine optimal agent capacity investments. We show that when oversight improves agent investment incentives the principal always benefits from an agent with biases opposite the overseer. Competing agent-overseer biases translate into higher quality policy outcomes than the principal could induce were she monitoring the agent. Effective oversight is necessary for these incentive effects. The results imply that political principals ought to consider the nature of the broader policymaking environment when appointing agents to make policy on their behalf and when designing managerial strategies aimed at motivating agents. (JEL D73, D82, H11)
... Our paper also contributes to the growing literature on policy gambles, starting with Majumdar and Mukand (2004). Similar settings are used in Fox and Van Weelden (2010), Fox and Stephenson (2011), Fu and Li (2014), Buisseret (2016), Cheng and Li (2018) and Dewan and Hortala-Vallve (2019). All these papers commonly assume that policy making involves inherent risks that are decreasing in the privately observable abilities of the politicians. ...
... Besides,Fox and Van Weelden (2010),Fox and Stephenson (2011) andFu and Li (2014) study how certain institutions affect the policy choice by an exogenously given officeholder. In contrast to the present paper, however, they do not model political selection. ...
We study how policy choice and political selection are affected by the concentration of political power. In a setting with inefficient policy gambles, variations in power concentration give rise to a trade-off. On the one hand, power-concentrating institutions allocate more power to the voters’ preferred candidate. On the other hand, they induce the adoption of more overly risky policies and decrease the voters’ capability to select well-suited politicians. We show that full concentration of power is optimal if and only if the conflict of interest between voters and politicians is small. Otherwise, an intermediate level of power concentration is optimal.
... The decrease in privacy and the concomitant increase insecurity agency"s surveillance powers are other important CT policies adopted by various liberal societies [19]. Regardless of the security justification for such CT measures, the political incentives that drive these policy interventions are well understood: (i) The legislators need to alleviate public fears and respond to citizens' demands to do something about terrorism, especially in the wake of major terrorist attacks [17,22] and (ii) Perhaps, and most importantly, public officials need to insure themselves against the political and electoral costs that would be borne when another terrorist attack takes place, should they oppose draconic CT measures in times of crisis [13,14]. Notwithstanding the political motive behind any libertyreducing CT measures (to increase the cost of terrorism), the empirical pattern of curtailing or suppressing free speech protections and other rights of the citizenry when bombs goes off, raises a critical fundamental security question: how does the policy of reacting to terrorist attacks with restrictions on free-speech protection and other fundamental rights and liberties of the citizenry affect the likelihood of terrorism? ...
... Proof of Proposition-6: Differentiating equation (22) with respect to ( ) gives ...
The freedom of expression, universally acknowledged as both a fundamental and foundational human right, is not only the cornerstone of democracy but indispensable to a thriving civil society. Indeed, the freedom of expression is considered the “foundational human right” of the greatest importance; hence its suppression on the advent of any CT measure cannot be overlook in any liberal society. However, since the event of the bombing of the World Trade Centre in USA in September 11th 2001 by the Al-Qaida terrorist organization, most democratic governments have responded to terrorist attacks with such CT measures that curtail or suppress the freedom of expression and other fundamental rights and liberties of its citizenry; all in the guise of countering terrorism. The decrease in privacy and the concomitant increase in security agency’s surveillance powers are other important CT policies adopted by various liberal societies. How this policy of reacting to terrorist attacks with restrictions on free-speech protections affect the likelihood of terrorism and CT measures, has dominated front burners of public discourse over the last decades. In this study, we develop a two-person two-period dynamic game-theoretic analysis of an interaction between security agency and terrorist organization; to study the possible security implications of adopting policies that curtail or suppress free-speech protections and other fundamental rights of citizens as CT measure. The study shows that in a world in which democratic governments respond to major security threat such as terrorism with restrictions on freedom of expression and other fundamental rights and liberties of its citizens, such policies seems to have serious moral vulnerability and boomerang effect of endangering government effort at preventing terrorism and thus engender more terrorist attacks by garnering undue support for the terrorist. The analysis suggests that a commitment to “respecting the fundamental rights and liberties” of the citizenry in times of duress can be of immense security-advantage. That is, if liberal societies would remain faithful to their fundamental values in the aftermath of terrorist attacks and other security threat, such a strategy possibly has the propensity to decreasing the probability of further terrorist attack, reduce cost of CT measure and hence a boost to government CT measures.
... Importantly, we assume that mistakes (as 12 While judges are not part of the executive branch, we use the label "bureaucrat" for simplicity. The modeling of judges in the literature is consistent with our approach (e.g., Fox and Stephenson, 2011). parametrized by κ) depend only on eligibility, not on the exact distance between the applicant's v and the standard v. ...
Recent years have seen a surge of politicians campaigning on policies that aim to deter asylum applicants. We present a game-theoretic model in which foreign nationals consider applying for asylum and bureaucrats decide their case if they apply. We show that while policies that make the asylum application less attractive decrease the probability that foreign nationals apply, they also endogenously raise the credibility of applicants’ claims to political persecution and, therefore, may not decrease the number of admitted refugees. Investigating how these competing effects shape asylum policy-making, we show how policy choices depend on bureaucrats’ leniency and politicians’ objectives. Our analysis speaks to the causes of restrictive asylum policies and their limited effectiveness in reducing immigration.
... These expectations are at the core of our theory of repeals but play no role in the aforementioned papers. 8 Fox and Stephenson (2011) and Ashworth and Shotts (2010) add a partially informed and benevolent judiciary and newspaper, respectively, to a standard model of pandering. They investigate whether a benevolent watchdog can improve policy making, and show that in some cases, its presence can be detrimental to the voter. ...
... For example, the unelected department aides were cued by Dominic Cummings to support the no-deal Brexit regardless of whether this is a good idea 1 . Even judges are no exceptions; they may rule creatively or defer to elected officials in order to signal competence or congruence (Levy, 2005;Fox and Stephenson, 2011). To minimize the policy risk associated with reform decisions, we ask: how to cure a decision maker's distorted incentive to acquire information arising from career concerns? ...
Complex reform decisions hinge crucially on precise policy-relevant information. Yet, when decision makers care about their reputation, they may be reluctant to collect information for fear of implementing good policies that are bad for future careers. I model the endogenous information acquisition in the delegated reform decision-making, allowing the public to constrain the decision maker's policy discretion. I show that the public almost ubiquitously benefits from eliminating or penalizing policies that are ex ante plausible. The public finds it optimal to ban the extreme but ex ante noncongruent policy to motivate information acquisition when 1) the decision maker is less likely to be congruent; 2) the appropriate policies are less likely to be extreme; 3) the scale of reform becomes more radical.
... A parallel literature studies the role played by institutional checks and balances, such as judicial review (e.g., Dragu et al., 2014). Fox andStephenson (2011), Fu andLi (2014), and Stephenson and Nzelibe (2010) study judicial review as a remedy to the proposer's tendency to take bold but unwarranted actions. As these models study institutional checks and balances, veto players are unaccountable to voters and accountability only affects the behavior of the proposer. ...
Political checks and balances are debated desiderata in the evaluation of democratic systems. We suggest a framework where the pros and cons of checks and balances are respectively the reduction of type-I errors and the increase of type-II errors in policy decision-making. Political checks and balances are less desirable for intermediate levels of competence of the political class when accountability is high. In policy areas where the effects of reforms are harder to evaluate and accountability is low, political checks and balances are always desirable. Positive constitutional design reveals the possibility of constitutional traps, with politicians choosing less desirable regimes.
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... Although several formal models investigate the effects of elections on the president's strategic behavior (e.g., Fox and Stephenson 2011;Groseclose and McCarty 2001;Howell and Wolton 2018;Judd 2017;Persson, Roland, and Tabellini 1997;Stephenson and Nzelibe 2010), these models focus on informational asymmetries between the president and a single representative voter and the role of the separation of powers in dispelling voters' uncertainty about the president. 4 Therefore, public opinion cannot serve as an independent constraint if the representative voter is not informed about whether the president is desirable. ...
I develop a formal model that investigates conditions under which the president acts unilaterally to establish a given policy. The key innovation is that unilateral action is considered a costly tool for voter mobilization. Presidential unilateral action activates voters' constitutional concerns, which increases the cost of voting and leads the president's supporters to abstain. However, it also provides extra expressive benefits of voting to the president's supporters who deeply care about the policy established by the unilateral action. Hence, the president acts unilaterally to establish the policy only if its mobilizing effects outweigh its demobilizing effects. This result implies that the president's unilateral action acquires popular support that can compensate for the lack of its constitutionality. I discuss the possibly benign effects of unilateral action that are conducive to an effective government and argue that it is necessary to account for these effects when making normative judgments about unilateral action.
... 2. Fox and Stephenson (2011) approach the role of judicial review from a different perspective and argue that the possibility of judicial intervention may lead executives to engage in "posturing," in which they enact bold yet unwise policies in an effort to project competence. ...
... Then, when the law is declared (rightly) unconstitutional, elected officials can simply blame the Court. Fox and Stephenson (2011) call this "political posturing," and there is some evidence (Amar and Amar 2002) of exactly this problem. 6 ...
... According to Amnesty International and Human Rights Watch, in the first six months of the year 2013 alone, 950 men were unlawfully detained by the Nigerian government [26][27][28][29]. If and when, these men make it out of detentions or prisons alive (many die of disease, starvation or torture); their animosity against the government usually increased and they became easy targets for Boko Haram's recruitment efforts. ...
Terrorist propaganda, like contagious diseases are produced and spread by few disgruntled members of the society who misconstrued and distort governments socio-economic ideologies, opinions and policies; with the sole aim of wining political goals through violence. Fear and intimidation, the common strategies of both terrorist and
security agencies often influenced the decisions of the whole population. Most government’s measures to prevent the spread of terrorist propaganda involve aggressive military crackdown on suspected propagators. This paper presents a dynamic model of “how the policy of preventing the spread of terrorist propagandas may impact on the ideological evolution of the population and as well as the propensity to advance the spreading of the propaganda”. The construct is a simple differential equation model of the propagandist evolutional dynamics; whose variables are parameters of six sub-populations. Analytical techniques used to study the solution paths of the model yielded three equilibrium points and their respective local stability criteria are discussed. The result shows that government’s sensitization campaigns, arrest, imprisonment and rehabilitation measures may help to depopulate the fanatics and strengthen the conscious and repented populations. However, this may accelerate the fanatic’s persuasion of the virgin population to follow their cause. Also the subsequent future decline in the size of the repented population insinuates that ideal intervention measures must incorporate efforts to identifying and solving the root causes of terrorism. Otherwise, with high rate of illiteracy, poverty, increase stigmatization and rejection of
the repented population by their host communities may eventually ensnare them to becoming a cheap target for terrorist recruitment opportunity. High worsening effect of arrest and detention, even though may depopulate the semi-fanatical and the fanatical populations at the long run, will initially rise to a critical level before reaching zero.
This has the implication of not only advancing their persuasion of the virgin population to support terrorist cause but could also provoke “blowback” actions in the susceptible population. Even among the unarrested members, this could increase their sympathy for their colleagues, and hence the temerity to be more active in spreading their propaganda. Hence, government must tread with caution, while preventing the propagation of terrorist ideologies.
... A fundamental reason for this is that there is no clean separation between substance and law in judicial evaluation of legislation. 9 See also Banks and Weingast (1992), Rogers (2001), Bueno de Mesquita and Stephenson (2007), Fox and Stephenson (2011), Cameron and Kornhauser (2012), Clark and Carrubba (2012), Beim, Hirsch, and Kastellec (2014), Fox and Vanberg (2014), and Dragu and Board (2015) for important treatments. 10 The similarity is that the governor and Crown in my model map to the low and high courts (respectively) in theirs. ...
In the colonial period of American history, the British Crown reviewed, and sometimes nullified, acts of colonial assemblies for “repugnancy to the laws of England.” In this way, Crown review established external, legal constraints on American legislatures. I present a formal model to argue that Crown legislative review counteracted political pressure on imperial governors from colonial assemblies, to approve laws contrary to the empire’s interests. Optimal review in the model combines both legal and substantive considerations. This gives governors the strongest incentive to avoid royal reprisal by vetoing laws the Crown considered undesirable. Thus, review of legislation for consistency with higher law helped the Crown to grapple with agency problems in imperial governance, and ultimately achieve more (but still incomplete) centralized control over policy. I discuss the legacy of imperial legislative review for early American thinking about constitutional review of legislation by courts.
... In contrast, my welfare results are likely to be reversed when the electorate harbours heterogeneous policy preferences, thus exacerbating the importance of selection. Similarly, one important class of models in which the normative conclusion would not hold are models of political posturing, in which politicians take extreme rather than moderate actions to signal their type (e.g., Fox and Stephenson, 2011;Kartik and Van Weelden, 2017). Even then, this paper stresses that scholars should examine the whole strategic interactions between the electorate, politicians, and outlets before passing judgement on the danger or benefit of certain media environments. ...
This article assesses the normative and positive claims regarding the consequences of biased media using a political agency framework that includes a strategic voter, polarized politicians, and news providers. My model predicts that voters are always better informed with unbiased than with biased outlets even when the latter have opposite ideological preferences. However, biased media may improve voter welfare. Contrary to several scholars' fears, partisan news providers are not always bad for democracy. My theoretical findings also have important implications for empirical analyses of the electoral consequences of changes in the media environment. The impact of left‐wing and right‐wing biased outlets depends on the partisan identity of officeholders. Empirical findings may, thus, not be comparable across studies or even over time within a study. Existing empirical works are unlikely to measure the consequences of biased media, as researchers never observe and can rarely approximate the adequate counterfactual: elections with unbiased news outlets.
... See, for example,Almendares and Le Bihan (2015),Ashworth (2005Ashworth ( , 2006, Bueno de Mesquita (2006, 2008),Banks and Sundaram (1993),Besley (2006),Besley and Burgess (2002),Besley and Prat (2006), Canes-Wrone, Herron, and Shotts (2001),Coate (2004),Daley and Snowberg (2011), Eggers (2017),Fox and Jordan (2011), Fox and Stephenson (2011, Van Weelden (2010, 2012),Gehlbach (2007),Gordon, Huber, and Landa (2007),Lohmann (1998),Maskin and Tirole (2004),Myerson (2006), andPersson and Tabellini (2000).2 These shocks typically take the form of either natural disasters(Abney and Hill 1966;Achen and Bartels 2004;Bechtel and Hainmueller 2011;Chen 2013;Cole, Healy, and Werker 2012;Gasper and Reeves 2011;Healy, Malhotra, and Mo 2010;Huber, Hill, and Lenz 2012) or economic shocks originating outside of the local economy(Ebeid and Rodden 2006;Kayser and Peress 2012;Leigh 2009;Wolfers 2002). ...
An important empirical literature evaluates whether voters are rational by examining how electoral outcomes respond to events outside the control of politicians, such as natural disasters or economic shocks. The argument is that rational voters should not base electoral decisions on such events, so evidence that these events affect electoral outcomes is evidence of voter irrationality. We show that such events can affect electoral outcomes, even if voters are rational and have instrumental preferences. The reason is that these events change voters' opportunities to learn new information about incumbents. Thus, identifying voter (ir)rationality requires more than just identifying the impact of exogenous shocks on electoral fortunes. Our analysis highlights systematic ways in which electoral fortunes are expected to change in response to events outside incumbents' control. Such results can inform empirical work attempting to identify voter (ir)rationality.
... Third, with respect to policy making, the accountability framework typically considers the policy choice problem of a single office holder in isolation, but the paradigm must be extended to capture interaction among multiple political office holders, as in Alesina and Rosenthal (1996); more recently, Cho (2009) analyzes a model of political representation in a single-member district system, and Fox and Van Weelden (2010) and Fox and Stephenson (2011) consider the effect of a veto player in the electoral accountability framework. This is essential to better understand the effects of division of powers on long run policy outcomes, for the comparison of different political systems, and the study of constitutional design issues introduced in formal modeling by Persson, Roland, and Tabellini (1997) and Laffont (2000). ...
We survey the literature on dynamic elections in the traditional settings of spatial preferences and rent seeking under perfect and imperfect monitoring of politicians. We define stationary electoral equilibrium, which encompasses notions used by Barro (1973), Ferejohn (1986), Banks and Sundaram (1998), and others. We show that repeated elections mitigate the commitment problems of politicians and voters, and that a responsive democracy result holds under general conditions. Term limits, however, attenuate the responsiveness finding. We also touch on related applied work, and we point to areas for fruitful future research, including the connection between dynamic models of politics and economics.
... For instance, Human Rights Watch and the press reports have documented that FBIinvolved agents orchestrated several well-known terror plots of the last decade, including the the Miami Seven, the Washington DC Metro bombing plot, the New York City subway plot, and the attempt to blow up Chicagos Sears Tower, among others. 20 In the case of the "Newburgh Four," for example, who were accused of planning to blow up synagogues and attack a U.S. military base, a U.S. District Judge said, "I believe beyond a shadow of a doubt that there would have been no crime here except the government instigated it, planned it and brought it to fruition." 21 Unsurprisingly perhaps, government officials have cited such foiled terrorist plots as evidence that liberty-reducing antiterrorism measures are effective. ...
How does a policy of reacting to terrorist attacks with restrictions on free speech protections affect the likelihood of terrorism in the first place? In this paper, I develop a dynamic model of an interaction between a security agency and a terrorist organization to study the dynamic consequences of adopting policies that curtail free speech protections and other rights when terror strikes. The paper shows that in a world in which democratic governments respond to major terrorist attacks with restrictions on freedom of expression and other rights and liberties, such policies have perverse effects on the pre-attack incentives of terrorism prevention/occurrence, which can make a terrorist attack more likely. The analysis suggests that a commitment to respecting fundamental rights and liberties in times of duress can be security-beneficial: if liberal societies were to remain faithful to their fundamental values in the aftermath of terrorist attacks, such a strategy can decrease the probability of a terrorist attack in the first place.
In this article, I study the effect of endogenous challenger entry on electoral accountability in the presence of adverse selection. To this end, I analyze a two-period electoral agency model wherein a potential challenger freely chooses whether to run for office. The effect of endogenous challenger entry on policy decisions in this model is ambiguous: depending on model parameters, it can worsen or ease policy distortions. Analogously, marginally increasing the cost of running for office can deepen or reduce these distortions. This uncertainty regarding the effect of endogenous challenger entry on policymaking leads to equally ambiguous welfare implications. Nonetheless, I identify conditions under which endogenous challenger entry improves policymaking and voter welfare. This suggests that, in some circumstances, imposing higher barriers to entry in elections can improve policymaking and voter welfare.
Informal, ‘notice-and-comment’, rulemaking is the prototypical mechanism employed by US regulators. However, agencies frequently claim their actions exempt from the process, and courts typically agree. Agencies thus face an important strategic choice between informal rulemaking and avoidance. To study this choice, we analyze a model of rulemaking with exemption and empirically analyze agency avoidance. Our model implies that more biased agencies engage in less avoidance, as they face more skepticism from the courts and, thus, require support from group comments to have their rules upheld. Empirically, we find support for this prediction. As for policy implications, we show it is more beneficial to allow exemptions when the agency is more biased.
System failure in the digital welfare state: Exploring parliamentary and judicial control in the Dutch childcare benefits scandal
In recent years, there have been multiple policy fiascos (large-scale policy failures) in the digitalized enforcement of social security across welfare states. Besides similarities in outcomes, these cases have exposed far-reaching consequences of ‘rule of law system weaknesses’ in the form of deficits in parliamentary and judicial control. While there has been increasing attention for the vulnerability of benefit recipients in the digital welfare state, the importance of parliamentary and judicial control and the problematic nature of deficits in these control mechanisms has remained largely overlooked. This article takes a first step towards an understanding of this issue. It (a) examines the linkages between parliamentary and judicial control and policy failure and (b) analyses the role of deficits in these control mechanisms in the Dutch childcare benefits scandal. The results demonstrate the combined relevance of a variety of control deficits related to the legislative process, parliamentary scrutiny and judicial review. Moreover, interdependencies between parliamentary and judicial control highlight the importance of holistically analysing their combined influence. All in all, the article facilitates a deeper understanding of system failure in the digital welfare state and provides recommendations for future research.
The Condorcet Jury Theorem and subsequent literature establish the feasibility of information aggregation in a common-value environment with exogenous policy options: a large electorate of imperfectly informed voters almost always selects the correct policy option. Rather than directly voting for policies, citizens in modern representative democracies elect candidates who make strategic policy commitments. We show that intermediation by candidates sometimes improves policy choices and sometimes impedes information aggregation. Somewhat paradoxically, the possibility of information aggregation by voters encourages strategic conformism by candidates. Correlated information or partisan biases among voters can mitigate the political failure we uncover. We also discuss possible institutional solutions.
Separation of powers with checks and balances (SP) is usually regarded as a key institution complementing elections in the control of elected officials. However, some analysts and many politicians also warn that excessive checks on the executive in the presence of polarization may lead to political inaction. We analyze the interaction between elections and SP, and study under what circumstances they complement each other. We first introduce a political agency model with ideological parties where citizens and politicians care about rents (a valence issue) and policy (a positional issue). Then, we analyze the impact of SP on the effectiveness of elections to discipline and select politicians. We demonstrate that SP unambiguously raises a majority of voters’ welfare in highly polarized non-competitive political environments, because it strengthens both discipline and selection without causing political gridlock. SP also raises voters’ welfare if elections are very effective at disciplining first period incumbents. Nevertheless, SP may reduce voters’ welfare if most rents go undetected and reform is not a first-order issue.
Contrary to stylized accounts of policy making in democracies, it is routine for presidents, governors, and other chief executives to issue directives such as decrees and executive orders to make law on their own. This article evaluates what political scientists have learned about presidential unilateral power. In our view, while a quarter century of scholarship on the topic has yielded a variety of theoretical predictions, the empirical record offers conflicting and perhaps unreliable evidence to substantiate and adjudicate between them. We review the dominant theoretical perspectives, which focus largely on constraints related to the separation of powers and political accountability. We then evaluate the evidence supporting these arguments and conclude with recommendations for conceptual, theoretical, and empirical advancement.
Expected final online publication date for the Annual Review of Political Science, Volume 24 is May 11, 2021. Please see http://www.annualreviews.org/page/journal/pubdates for revised estimates.
The Canadian reference power allows governments to ask appellate courts for an advisory opinion without a live dispute. Reference cases have been an important element of Canadian federalism since their creation in 1875 but have not been subject to a comprehensive analysis. Shifting the focus to understanding government decisions to rely on the courts to navigate federalism, this article has two objectives. First, through analysis of an original dataset of Canadian appellate reference cases from 1875 to 2017, the article provides an examination of how references have been used by governments, with particular attention to issues related to federalism. Second, the article considers how the reference power can be employed as a political strategy by governments. The reference power demonstrates clear support for the blame avoidance and credit-claiming thesis and provides compelling evidence on how the dynamics of intergovernmental relations can shape a government’s decision to delegate decision-making to the courts.
Judicial protection of disfavored minorities against oppressive legislation in majoritarian separation-of-power systems raises a puzzle: Why don’t legislative majorities enacting discriminatory legislation curb judicial power when judges use their power to protect minorities and stymie the legislation? We answer this question by showing that judicial protection of disfavored minorities can emerge as an unintended by-product of majoritarian politics. We develop a model that includes the two aspects of judicial review Alexander Hamilton discusses in The Federalist No. 78: Judicial protection of disfavored minorities against hostile popular majorities, and judicial protection of majority interests against legislative depredation. It is the institutional linkage between these functions that induces popular majorities, within limits, to side with judges against legislatures even when those judges protect minorities that popular majorities want to oppress.
Circuit splits, or conflicting rules across multiple U.S. Courts of Appeals, have important policy implications and dramatic effects on Supreme Court case selection, yet we know little about the incentives ideological lower courts face when deciding whether to initiate conflict. This article develops a formal model of a judicial hierarchy where lower court judges are subject to review by a high court with distaste for unresolved conflict, termed “split‐intolerance,” and with uncertain preferences over policy. Lower courts may compete by investing costly effort in legal quality to make their rules more attractive. In equilibrium, lower courts may initiate conflict even when the odds of success before the high court are remote. Surprisingly, lower courts grow more likely to create conflict as the high court's split‐intolerance increases; however, split‐intolerance can also incentivize greater lower court effort. I present qualitative evidence illustrating the model's explanatory power.
Are people conservative (liberal) because they are Republicans (Democrats)? Or is it the reverse: people are Republicans (Democrats) because they are conservatives (liberals)? Though much has been said about this long-standing question, it is difficult to test because the concepts are nearly impossible to disentangle in modern America. Ideology and partisanship are highly correlated, only growing more so over time. However, the election of President Trump presents a unique opportunity to disentangle party attachment from ideological commitment. Using a research design that employs actual “conservative” and “liberal” policy statements from President Trump, we find that low-knowledge respondents, strong Republicans, Trump-approving respondents, and self-described conservatives are the most likely to behave like party loyalists by accepting the Trump cue—in either a liberal or conservative direction. These results suggest that there are a large number of party loyalists in the United States, that their claims to being a self-defined conservative are suspect, and that group loyalty is the stronger motivator of opinion than are any ideological principles.
Computational models have been underutilized as tools for formal theory development, closing off theoretical analysis of complex substantive scenarios that they would well serve. I argue that this occurs for two reasons, and provide resolutions for each. First, computational models generally do not employ the language or modes of analysis common to game‐theoretic models, the status quo in the literature. I detail the types of insights typically derived from game‐theoretic models and discuss analogues in computational modeling. Second, there are not widely established procedures for analysis of deductive computational models. I present a regularized method for deriving comparative statics from computational models that provides insights comparable to those arising from game‐theoretic analyses. It also serves as a framework for building theoretically tractable computational models. Together, these contributions should enhance communication between models of social science and open up the tool kit of deductive computational modeling for theory building to a broader audience.
This article provides a theoretical and empirical analysis of how politicians allocate their time across issues. When voters are uncertain about an incumbent's preferences, there is a pervasive incentive to "posture" by spending too much time on divisive issues (which are more informative about a politician's preferences) at the expense of time spent on common-values issues (which provide greater benefit to voters). Higher transparency over the politicians' choices can exacerbate the distortions. These theoretical results motivate an empirical study of how Members of the US Congress allocate time across issues in their floor speeches. We find that US senators spend more time on divisive issues when they are up for election, consistent with electorally induced posturing. In addition, we find that US house members spend more time on divisive issues in response to higher news transparency. © 2017 by the Southern Political Science Association. All rights reserved.
The prevention of terrorist attacks is an important concern for many governments. In democracies, officials also fear the electoral consequences of successful attacks. As a result, counterterrorism policy-making and electoral concerns are tightly intertwined. To understand the implications of this link, I develop a game-theoretic model and show that left-wing incumbents respond to terror threats more aggressively than their right-wing counterparts in order to convince voters that they can be trusted in fighting terrorism. Terrorist attacks improve right-wing incumbents’ reputation, while they worsen the reputation of left-wing incumbents. When the terrorist threat is high, voters ignore right-wing incumbents’ reputation, reelecting them independently of their performance. Finally, I consider the strategic consequences of maintaining counterterrorism policies hidden from the public eye.
What institutional arrangements allow veto players to secure maximal welfare when all agree on both the need for and the direction of policy change? To answer this question, we conduct a mechanism design analysis. We focus on a system with two veto players, each with incomplete information about the other's policy preferences. We show that the unique welfare-maximizing mechanism is the mechanism that implements the preferred policy of the player whose ideal policy is closer to the status quo. We provide examples of institutional structures under which the unique equilibrium outcome of this two-player incomplete information game is the policy outcome implemented by this mechanism, and argue that our result can be used as a normative benchmark to assess the optimality of veto player institutions.
This article explores an agency model in which voters learn about both an incumbent and an opponent. They observe the incumbent’s policy record and update their beliefs about his opponent via a campaign. Although the former is relatively more informative, it can be costly for the voter to learn about the incumbent from her policy record. This is because policy reforms, which allow a voter to learn an incumbent’s ability, are risky and can leave the voter worse off. Then the voter may prefer the incumbent to take safer actions. The efficient level of reform – the one preferred by the voter – balances the value of learning with the expected policy costs/benefits. In a world where the opponent’s campaign is uninformative, reform can be too low due to the incumbent’s fear of failure . Or it can be too high: the incumbent may gamble on success . This article shows that the presence of an opponent who can reveal information via a campaign exacerbates these inefficiencies. An incumbent who anticipates the effect of an opponent’s campaign on voter beliefs is more likely to make inefficient policy choices. Further, such campaigns can lead to an overall welfare loss when they reveal little about the opponent’s ability and yet have an impact on the incumbent’s policy choice.
Ex post review is a common feature of policymaking institutions. We consider a simple environment in which an expert agent makes a policy recommendation, which can then be accepted or rejected by a principal whose policy goals differ from those of the agent. The theory offers testable predictions about policy recommendations and the principal’s acceptance or rejection of these recommendations. The theory suggests that behavior and institutional design incentives are sensitive to both actors’ preference alignment and the importance of and uncertainty inherent to the policy area in multiple ways, some expected and some less obvious. We characterize the types of situations in which ex post review creates incentives for the agent to make pathological policy choices. In these situations, ex post review can reduce the accountability of the agent to the wishes of the principal and ultimately create an incentive for the principal to forego review entirely.
The lion’s share of policy in the United States is made by administrative agencies. Agencies not only make policy choices, they must also implement policy effectively. Oversight institutions play an integral role in the policymaking process by monitoring, through review of agency policy actions, both policymaking tasks. Through analysis of a formal model I develop a theory of policymaking between agencies and courts and show that review can impact agency effort choices even when bureaucratic subversion is not a concern. At times the court has no impact on this effort and the agency is unconstrained. However, when the agency’s effort dictates whether or not the court defers to the agency’s actions judicial review does affect effort decisions. In this setting, review can either strengthen or, counter-intuitively, weaken agency effort incentives. Implications for executive and congressional oversight are discussed in light of these results.
Can Supreme Court rulings change Americans’ policy views? Prior experimental and observational studies come to conflicting conclusions because of methodological limitations. We argue that existing studies overlook the media’s critical role in communicating Court decisions and theorize that major decisions change Americans’ opinions most when the media offer one-sided coverage supportive of the Court majority. We fielded nationally representative surveys shortly before and after two major Supreme Court decisions on health care and immigration and connected our public opinion data with six major television networks’ coverage of each decision. We find that Court decisions can influence national opinion and increase support for policies the Court upholds as constitutional. These effects were largest among people who received one-sided information. To address selection concerns, we combined this observational study with an experiment and find that people who first heard about the Court decisions through the media and through the experiment responded in similar ways.
This paper considers an electoral model in which an incumbent and a challenger have ideological policy preferences that are private information. The incumbent may bias pre-electoral policies to signal preferences to the electorate with the aim of affecting the outcome of the election. When the two candidates are of completely different types, such a policy bias can occur only in a moderate direction. However, when their possible types overlap, a policy bias can be created in either a moderate or an extreme direction.
A central challenge in the modern regulatory state is rationalizing and coordinating multiple, overlapping, and interdependent public and private enforcement mechanisms. To that end, recent years have seen mounting calls to vest administrative agencies with litigation "gatekeeper" authority across a range of regulatory areas, from environmental protection and civil rights to antitrust and securities. Agencies, it is said, can use their expertise and synoptic perspective to weigh costs and benefits and determine whether private rights of action should lie at all. Alternatively, agencies might be given the power to evaluate lawsuits on a case-by-case basis, blocking bad cases, aiding good ones, and otherwise husbanding available private enforcement capacity in ways that conserve scarce public resources for other uses. Yet despite the proliferation of such calls, there exists strikingly little theory or evidence on how agency gatekeeper authority either should or would work in practice. This Article aims to fill that gap by offering a systematic account of this often-invoked but under-theorized role for agencies. Drawing on theories of agency behavior and empirical analysis of the gatekeeper regimes currently in existence, this Article sketches the case for and against vesting agencies with litigation gatekeeper authority across a range of regulatory contexts and elaborates some functional design principles that policymakers can use to weigh competing models or determine whether agency gatekeeping makes sense at all. There are other payoffs as well. Anatomizing agency gatekeeping allows us to reimagine the agency role in some of our most consequential regulatory regimes, among them a system of job discrimination regulation that seems especially ripe for revision following the Supreme Court's decision in Wal-Mart v. Dukes. More broadly, this Article makes a novel contribution to the otherwise oceanic literature on "litigation reforms" and reorients scholarly debate around optimal regulatory design and the contours and purposes of the administrative state itself by exploring the increasingly blurred boundary between administration and litigation.
In recent years, a growing chorus of commentators has called on Congress to vest agencies with litigation "gatekeeper" authority across a range of regulatory areas, from civil rights and antitrust to financial and securities regulation. Agencies, it is said, can rationalize private enforcement regimes through the power to evaluate lawsuits on a case-by-case basis, blocking bad cases, aiding good ones, and otherwise husbanding private enforcement capacity in ways that conserve scarce public resources for other uses. Yet there exists strikingly little theory or evidence on how agency gatekeeper authority might work in practice. This Article begins to fill that gap by offering the first systematic study of an often invoked but little studied example: Department of Justice (DOJ) oversight of qui tam litigation brought pursuant to the False Claims Act (FCA). Using an original dataset encompassing some 4000 qui tam lawsuits filed between 1986 and 2011, this Article offers evidence on numerous issues that have occupied recent judicial, scholarly, and popular debate, including the extent to which DOJ utilizes its various oversight tools, the mix of factors that drives DOJ intervention decisions, and whether DOJ's seemingly powerful impact on case outcomes can be ascribed to its merits-screening or merits- making role. The analysis mostly rejects heated claims that DOJ decisionmaking has a partisan political cast or is unconnected to case merit. At the same time, however, it uncovers substantial evidence that DOJ makes case decisions strategically, separate and apart from pure merits considerations, in response to simple resource constraints, judicial threats to its ability to police collusive relator-defendant settlements, and the identity (and corporate power) of the defendant. These findings have important implications for judicial evaluation of qui tam suits as well as leading FCA reform proposals. More broadly, the analysis opens up new theoretical and empirical avenues for thinking about optimal regulatory design at the border of litigation and administration, with applications well beyond the FCA.
We develop a model of political accountability with sequential policymaking. When a bureaucrat's actions are transparent, his overseer faces a political time inconsistency problem-she is tempted to revise her retention rule in the middle of the policymaking process. As a result, the bureaucrat's equilibrium behavior overemphasizes later tasks. If the overseer knows the technology by which policies translate into outcomes, then she can eliminate these distortions using task-specific budget caps. However, if the overseer is uncertain about this technology, such budget caps introduce ex post inefficiency. When uncertainty is sufficiently large and consequential, the overseer prefers an institutional environment with a fungible budget and no transparency. Such an environment allows the overseer to exploit the bureaucrat's expertise, though at the cost of weaker overall incentives.
Constitutional theorists usually assume that minority-protective judicial review leads to outcomes more favorable to the protected minority and less favorable to the majority. Our analysis highlights an indirect effect of judicial review that complicates this conventional wisdom. Without judicial review, pro-majority and pro-minority leaders adopt different policies. Because judicial review limits the degree to which pro-majority leaders can adopt anti-minority policies, it becomes easier for pro-minority leaders to “mimic” pro-majority leaders by adopting the most anti-minority policy that the judiciary would uphold. Furthermore, if judicial invalidation of anti-minority policies is probabilistic rather than certain, pro-majority leaders may propose even more extreme anti-minority policies in order to deter pro-minority leaders from mimicking. These effects can sometimes nullify, or even reverse, the assumed relationship between minority-protective judicial review and pro-minority outcomes. When such reversal occurs, majoritarian democrats should favor minority-protective judicial review, while those concerned with protecting unpopular minorities should oppose it.
Frank Michelman believes that the Supreme Court is "moving noticeably towards a reformalization of regulatory-takings doctrine." He criticizes this development, believing that the Court should instead engage in balancing. To him "balancing-or, better, the judicial practice of situated judgment or practical reason-is not law's antithesis but a part of law's essence." I argue in this Article that Michelman is wrong on both counts. Part I demonstrates that the Court does not appear to be articulating consistent formal principles in the takings area. Part II argues that it should try to do just that. Whatever the merits of ad hoc balancing in other areas of law, it has special difficulties in the takings area because of the important role of investment-backed expectations. Nonetheless, Michelman is correct in saying that the formal pattern he discerns is an undesirable one. Thus, Part III suggests a way to think about the takings question that unifies physical and regulatory takings and provides a way to distinguish between government actions that require compensation and those that do not. Nevertheless, even a very imperfect, but clearly articulated, formal takings doctrine is likely to be superior to open-ended balancing.
This paper provides an evaluation of the substantive corporate governance mandates of the Sarbanes-Oxley Act of 2002 that is informed by the relevant empirical accounting and finance literature and the political dynamics that produced the mandates. The empirical literature provides a metric for evaluating the mandates' effectiveness, by facilitating identification of whether specific provisions can be most accurately characterized as efficacious reforms or as quack corporate governance. The learning of the literature, which was available when Congress was legislating, is that SOX's corporate governance provisions were ill-conceived. The political environment explains why Congress would enact legislation with such mismatched means and ends. SOX was enacted as emergency legislation amidst a free-falling stock market and media frenzy over corporate scandals shortly before the midterm congressional elections. The governance provisions, included toward the end of the legislative process in the Senate, were not a focus of any considered attention. Their inclusion stemmed from the interaction between election year politics and the Senate banking committee chairman's response to suggestions of policy entrepreneurs. The scholarly literature at odds with those individuals' recommendations was ignored, while the interest groups whose position was more consistent with the literature - the business community and accounting profession - had lost their credibility and become politically radioactive. The paper's conclusion is that SOX's corporate governance provisions should be stripped of their mandatory force and rendered optional. Other nations, such as the members of the European Union who have been revising their corporation codes, would be well advised to avoid Congress' policy blunder.
An availability cascade is a self-reinforcing process of collective belief formation by which an expressedperception triggers a chain reaction that gives the perception increasing plausibility through its rising availability in public discourse. The driving mechanism involves a combination of informational and reputational motives: Individuals endorse the perception partly by learning from the apparent beliefs of others and partly by distorting their public re-sponses in the interest of maintaining social acceptance. Availability entrepre-neurs--activists who manipulate the content of public discourse-strive to trig-ger availability cascades likely to advance their agendas. Their availability campaigns may yield social benefits, but sometimes they bring harm, which suggests a need for safeguards. Focusing on the role of mass pressures in the regulation of risk associated with production, consumption, and the environ-ment, Professors Timur Kuran and Cass R. Sunstein analyze availability cas-cades and suggest reforms to alleviate their potential hazards. Their proposals include new governmental structures designed to give civil servants better in-sulation against mass demands for regulatory change and an easily accessible scientzfic database to reduce people S dependence on popular (mis)perceptions.
This volume's sample of contemporary political theory draws on the rational choice paradigm in general and game theory in particular, and reveals several facts. First, applications of game theory extend beyond the adaptations of those games made familiar by introductory texts—Prisoner's Dilemma, Chicken, and simple majority-rule voting games. Second, although the usual domain of research employing the mathematical tools has been elections and legislatures, international relations is now an especially fertile area of inquiry. Finally, because the contributions treat elections, legislative processes, and international relations, we see contemporary theory as an integrated subject. Specific models may employ different assumptions about the structure of strategic interaction, but the logic of game theory is a thread that unites them all.
In this Madison Lecture, Chief Judge Posner advocates a pragmatic approach to constitutional decisionmaking, criticizing constitutional theorists who conceal their normative goals in vague and unworkable principles of interpretation. After discussing specific constitutional theories as well as the legal academy's increasing reliance on theory in general, Posner demonstrates the ineffectuality of constitutional theory, using the Supreme Court's decisions in United States v. Virginia and Romer v. Evans as examples. He argues not that these cases were necessarily wrongly decided, but that the opinions lack the empirical support that is crucial to sound constitutional adjudication. Posner urges law professors to focus their scholarship on forms of inquiry that will actually prove useful to judges and concludes by asking that judges themselves recognize and acknowledge the limitations of their empirical knowledge.
Human reason is limited. Given the scarcity of reason, how should the power to make constitutional law be allocated among legislatures, courts and the executive, and how should legal institutions be designed? Law and the Limits of Reason denies the widespread view, stemming from Burke and Hayek, that the limits of reason counsel in favor of judges making "living" constitutional law in the style of the common law. It questions what's behind the curtain of "settled practices" or "legal rules" and asks to what extent are these in fact a constellation of less-than-rational judgments? The book proposes and defends a "codified constitution"-a regime in which legislatures have the primary authority to develop constitutional law over time, through statutes and constitutional amendments. Law and the Limits of Reason contends that precisely because of the limits of human reason, large modern legislatures, with their numerous and highly diverse memberships and their complex internal structures for processing information, are the most epistemically effective lawmaking institutions.
In this Article, Einer Elhauge analyzes whether interest group theory justifies various proposals to change constitutional review, antitrust law, or statutory interpretation in order to make courts less deferential to the political process. He begins by demonstrating that interest group theory cannot identify instances where interest group influence is disproportionate without using implicit normative baselines that reflect substantive conclusions about the merits of political outcomes. Because such substantive conclusions are contestable, he concludes that interest group theory can provide no reliable grounds for collective condemnation of the political process. He then argues that, even if one stipulates a normative baseline, interest group theory does not demonstrate that the litigation process has a comparative advantage over the political process. Nor can one justify more intrusive judicial review on the ground that it increases the transaction costs of interest group capture. More intrusive judicial review can sometimes decrease such transaction costs, and increasing transaction costs can perversely encourage interest group activity, increase the relative advantage of interest groups, and retard legal changes that benefit the general public. In a final section, the Article offers parallel reasons for rejecting the claim that decision theory also justifies more intrusive judicial review.
This article develops a simple signaling game in which a Legislature and a Court interact in seeking their own policy goals. The Legislature faces two sources of uncertainty when legislating. First, it knows only probabilistically whether the Court's preferences converge or diverge from its own on the proposed law. Second, its knows only probabilistically the true state of the world and, hence, does not know with certainty whether the law will reasonably achieve its intended outcome if enacted. For institutional and sequential reasons, the Court has more information regarding the actual consequences of an enacted law than the Legislature did when initially considering it. As a result, the Court's exercise of the judicial veto may (but not necessarily will) be informationally productive. The possibility of informative judicial review affects the quantity and informational quality of legislation enacted by the Legislature relative to legislation that would be enacted in the absence of judicial review. Further, an informational component to judicial review alters the incentive that the Court has to act strategically relative to incentives for strategic behavior in purely distributive models of legislative-judicial interaction. Finally, because of the possibility of informative judicial review, the model accounts endogenously for the creation and maintenance of an independent judiciary by a Legislature that solely values achieving its preferred policy outcomes.
This Essay states the general case against judicial review of legislation clearly and in a way that is uncluttered by discussions of particular decisions or the history of its emergence in particular systems of constitutional law. The Essay criticizes judicial review on two main grounds. First, it argues that there is no reason to suppose that rights are better protected by this practice than they would be by democratic legislatures. Second, it argues that, quite apart from the outcomes it generates, judicial review is democratically illegitimate. The second argument is familiar; the first argument less so. However, the case against judicial review is not absolute or unconditional. In this Essay, it is premised on a number of conditions, including that the society in question has good working democratic institutions and that most of its citizens take rights seriously (even if they may disagree about what rights they have). The Essay ends by considering what follows from the failure of these conditions.
U.S. v. Carolene Products footnote four is "the great and modern charter for ordering the relation between judges and other agencies of government." Under the footnote, the rigor of judicial review is selected in response to whether a statute's enactment reflects or affects "ordinary" majoritarian processes. Often neglected, however, is that the process criterion did not originate with the Fourteenth Amendment concerns of the footnote, but originated in the early tax and commerce jurisprudence of the Supreme Court. Drawing upon the jurisprudence in these precedents, a simple game theoretic model is developed of the footnote's suspect legislative incentive structure. Doing so illuminates several controversies surrounding the footnote's doctrine and application: the majoritarian basis for the Court's countermajoritarian prerogative and the type of "discrete and insular" minority groups that qualify for heightened judicial review. It also corrects the common misconception that the footnote excludes economic regulations from heightened judicial scrutiny.
This article critiques the prevailing constitutional doctrine applied in cases of state regulation of democratic politics. Instead of the conventional individual rights versus state interests approach, Professors Issacharoff and Pildes construct a less formulaic and more functional theoretical framework by borrowing from the last generation of academic thought in private law. In particular, corporate-law scholarship has increasingly shifted from a focus on specifying first-order fiduciary duties to emphasizing second-order considerations involving proper construction of the background "market for corporate control." This article seeks a similar transformation in public-law thought. It argues for a shift away from the conventional first-order focus on defining rights and equality and toward an emphasis on the proper construction of background "markets for partisan control" in the arena of democratic politics. Oftentimes, state regulations that purportedly reflect state interests in "stability" or the "avoidance of factionalism" can be seen as tools by which existing parties seek to raise the cost of defection and entrench existing partisan forces more deeply into office. When, but only when, political arrangements work in this way, this article suggests that courts or other institutions should play the role of destabilizing these arrangements and restoring a more competitive partisan political environment. The article offers comparative perspectives from German constitutional law and revisits questions involving the original constitutional conception of democracy in its efforts to move legal assessments of politics toward ensuring robustly competitive partisan political environments that avoid insider lockups of democratic politics.
This Article argues that courts can, and often should, implement constitutional guarantees by crafting doctrines that raise the costs to government decisionmakers of enacting constitutionally problematic policies. This indirect approach may implement a kind of implicit balancing of interests, in which the damage to constitutional values is weighed against the strength of the government's interest in the challenged policy, more effectively than alternative approaches. When the government has better information than the reviewing court about the effect of the challenged policy on constitutionally relevant interests, heightened enactment costs act as a kind of screening device: if the government would still enact a given policy in the face of substantial additional enactment costs, the probability that the policy serves significant government interests is likely to be higher. This Article first develops the theoretical argument as to how (and under what conditions) doctrines that manipulate legislative enactment costs may be more effective tools for judicial implementation of the Constitution than doctrines that require direct judicial assessment of the relative strength of the competing interests. The Article further contends that the federal judiciary already has the capacity to fashion doctrines that function in this way, and indeed current doctrine influences legislative enactment costs more than has generally been appreciated.
Although good information is critical to effective decision making, public agents' private incentives to invest in gathering information may not align with the social interest in their doing so. This Article considers how legal-institutional design choices affect government decisionmakers' incentive to invest in information, as well as how to manage the inevitable trade-off between promoting efficient use of information ex post and stimulating efficient acquisition of information ex ante. Using a simple theoretical framework, the Article considers a range of techniques for incentivizing information gathering, with particular attention to the structure of public institutions and public law.
Political scientists have long classified systems of government as parliamentary or presidential, two-party or multiparty, and so on. But such distinctions often fail to provide useful insights. For example, how are we to compare the United States, a presidential bicameral regime with two weak parties, to Denmark, a parliamentary unicameral regime with many strong parties? Veto Players advances an important, new understanding of how governments are structured. The real distinctions between political systems, contends George Tsebelis, are to be found in the extent to which they afford political actors veto power over policy choices. Drawing richly on game theory, he develops a scheme by which governments can thus be classified. He shows why an increase in the number of "veto players," or an increase in their ideological distance from each other, increases policy stability, impeding significant departures from the status quo. Policy stability affects a series of other key characteristics of polities, argues the author. For example, it leads to high judicial and bureaucratic independence, as well as high government instability (in parliamentary systems). The propositions derived from the theoretical framework Tsebelis develops in the first part of the book are tested in the second part with various data sets from advanced industrialized countries, as well as analysis of legislation in the European Union. Representing the first consistent and consequential theory of comparative politics, Veto Players will be welcomed by students and scholars as a defining text of the discipline.
In countries and supranational entities around the globe, constitutional reform has transferred an unprecedented amount of power from representative institutions to judiciaries. The constitutionalization of rights and the establishment of judicial review are widely believed to have benevolent and progressive origins, and significant re-distributive, power-diffusing consequences. "Towards Juristocracy" challenges this conventional wisdom. Drawing upon a comprehensive comparative inquiry into the political origins and jurisprudential consequences of the recent constitutional revolutions in Canada, Israel, New Zealand, and South Africa, the book shows that the trend toward constitutionalization is hardly driven by politicians' genuine commitment to democracy, social justice, or universal rights. Rather, it is best understood as the product of a strategic interplay among hegemonic yet threatened political elites, powerful economic stakeholders, and judicial leaders. This self-interested tripartite coalition determines the timing, extent, and nature of constitutional reforms. This book demonstrates that whereas the constitutionalization of rights may promote procedural justice and negative liberties, it does little if anything for advancing progressive notions of distributive justice. At the same time, judicial empowerment through constitutionalization has a transformative effect on political discourse. From foundational collective identity and nation building quandaries to restorative justice and regime change controversies, constitutional courts have become crucial fora for dealing with the most fundamental questions a democratic polity can contemplate. The global trend towards juristocracy is part of a broader process, whereby proponents of powerful social and economic interests, while they profess support for democracy, attempt to insulate policy-making from the vicissitudes of democratic politics. Given this dramatic development, the traditional neglect of the study of comparative law and politics is becoming harder to justify. An informed, genuinely comparative, problem driven research agenda will not only help to bridge the traditional gap between grand constitutional theory and real-life constitutional politics worldwide; it is also likely to yield novel insights concerning the origins and consequences of the ever-accelerating transition to juristocracy.
While the standing doctrine is one of the most widely theorized and criticized doctrines in U.S. law, its origins remain controversial. One revisionist view espouses that New Deal progressive justices purposely invented the standing doctrine to insulate administrative agencies from judicial review. Yet existing support for this “insulation thesis” is weak. Our Article provides the first systematic empirical evidence of the historical evolution of standing. We synthesize the theory and claims underlying the insulation thesis and compile a new database of every standing issue decided, along with all contested merits votes, by the Supreme Court from 1921-2006. To overcome conventional problems of haphazard case selection, we amass, read, and classify over 1,500 cases cited in historical treatments of the doctrine, assembling a database of all standing issues contested. With modern statistical methods and this new dataset – comprised of 47,570 votes for 5,497 unique issues and 229 standing issues – we find compelling evidence for the insulation thesis. Before 1940, progressive justices disproportionately deny standing to plaintiffs in cases that largely involve challenges to administrative agencies. After 1940, the political valence of the standing doctrine reverses: progressives uniformly favor standing. Justices Douglas and Black, in particular, track this evolution (and valence reversal) of the standing doctrine. Our results challenge legal inquiries of what claims are traditionally amenable to judicial resolution and highlight the unintended consequences of judicial innovation.
Convention holds that the Supreme Court, because of its special constitutional role, can confer an element of legitimacy on a policy simply by endorsing it. In this study, we conducted an experiment to test the legitimacy-conferring effect of Court rulings on public opinion in two policy areas—affirmative action and regulation of phone rates. We found that in both cases, the Supreme Court had an impact on policy agreement and behavioral intentions that was moderated by other important variables. We conclude that the Supreme Court plays an important role in shaping public opinion and political behavior.
We develop an informational theory that analyzes conditions under which a reelection-seeking executive will act in the public interest. The theory considers factors such as executive competence, challenger quality, and the likelihood that voters will learn the consequences of policy decisions before an upcoming election. We find that an executive who has information suggesting that a popular policy is contrary to voters' interests may or may not pander to voters by choosing it; under certain conditions, the executive can actually increase his probability of reelection by choosing an unpopular policy that is in the public interest. However, we also show that an executive will sometimes face electoral incentives to enact a policy that is both unpopular and contrary to voters' interests. Our theory is illustrated with examples involving President Abraham Lincoln, California Governor Earl Warren, and President Gerald Ford.
This book examines whether the mechanisms of accountability characteristic of democratic systems are sufficient to induce the representatives to act in the best interest of the represented. The first part of the volume focuses on the role of elections, distinguishing different ways in which they may cause representation. The second part is devoted to the role of checks and balances, between the government and the parliament as well as between the government and the bureaucracy. The contributors of this volume, all leading scholars in the fields of American and comparative politics and political theory, address questions such as, whether elections induce governments to act in the interest of citizens. Are politicians in democracies accountable to voters in future elections? If so, does accountability induce politicians to represent citizens? Does accountability limit or enhance the scope of action of governments? Are governments that violate campaign mandates representative? Overall, the essays combine theoretical discussions, game-theoretic models, case studies, and statistical analyses, within a shared analytical approach and a standardized terminology. The empirical material is drawn from the well established democracies as well as from new democracies.
We develop an informational model of judicial decision-making in which deference to precedent is useful to policy-oriented appellate judges because it improves the accuracy with which they can communicate legal rules to trial judges. Our simple model yields new implications and hypotheses regarding conditions under which judges will maintain or break with precedent, the constraining effect that precedent has on judicial decision-making, the voting behavior of Supreme Court Justices, the relationship between a precedent's age and its authority, the effect of legal complexity on the level of deference to precedent, the relative stability of rules and standards, and long-term patterns of legal evolution. Perhaps most importantly, we demonstrate that “legalist” features of judicial decision-making are consistent with an assumption of policy-oriented judges.
We argue that the standard methodology for assessing the impact of Supreme Court decisions on public opinion, which relies on national surveys to measure public attitudes before and after relevant Court decisions, fails, among other grounds, to account for the fact that the overwhelming majority of Court decisions speak to particular constituencies only.We assess the impact of the Supreme Court's decision in Lamb's Chapel v. Center Moriches on the geographic constituencies involved in the case. We interviewed a random sample of residents in the town of Center Moriches and in the surrounding county of Suffolk, New York, before and after the decision. Consistent with the elaboration likelihood model of persuasion (Petty and Cacioppo 1986), we find that high levels of information about the decision increases support for the Court's decision among those for whom the decision is relatively less salient.
We use an agency model to analyze the impact of judicial review on democratic performance. We find that judicial review may increase "democratic failure" by rescuing elected officials from the consequences of ill-advised policies, but may also decrease democratic failure by alerting voters to unjustified government action. We further find that judges will defer to the decision of elected leaders unless the level of democratic failure is sufficiently high. We then show how judicial review affects voter welfare, both through its effect on policy choice and through its effect on the efficacy of the electoral process in selecting leaders. We also analyze how the desirability of judicial review is affected by characteristics of the leaders and the judges. Our welfare analysis establishes general conditions under which judicial review serves majoritarian interests—and thereby arguably increases the "democratic" character of political outcomes, despite the non-democratic nature of judicial review itself.
Modern scholars tend to assume that judicial review is a good thing. And it might be. But an assumption is not an argument. This paper examines the institution of judicial review and asks this question: Is judicial review on balance good? The question, "good relative to what" is first answered, then the costs of judicial review are considered relative to the institution's benefits. This analysis is preliminary, so no definitive answer is attempted (let alone actually provided). Nonetheless, the possibility exists that judicial review can create a "moral hazard" problem that can debilitate democratic citizenship as well as the legislative process and outcomes. .
A new judicial politics of legal doctrine has the potential to resolve foundational dilemmas and reconcile long-standing and counterproductive scholarly divisions by bringing together legal concerns and political science priorities. This doctrinal-politics approach highlights a relatively new formal apparatus known as the case-space model, and it invokes close ties between theoretical and empirical work and between the study of judicial behavior and actual legal practices and institutions. The case-space model is an adaption of standard policy-space modeling, tailored for the distinguishing features of judicial policy making. It allows for ideological differences between judges while expressing those differences in terms of legal rules that partition fact-filled legal cases into different dispositions. I explore the intellectual origins and primary contributions of the approach, focusing on how legal policy is affected by collegiality (the multi-member nature of appellate courts) and hierarchy (the multi-level division of court systems).
Recent empirical scholarship that shows that judges decide cases in a manner that is consistent with their political biases has motivated a stream of proposals for reform, including judicial term limits, limitations on judicial review of statutes and agency actions, revision of the judicial appointments process, and mandatory mixed party representation on judicial panels. However, these proposals incorrectly assume that judicial bias is necessarily harmful, and do not fully consider the costs to other values even when reduction of judicial bias is justified. To evaluate proposals for reform, one needs a theory of judicial review, one that explains how bias and other characteristics of judicial behavior result in socially good or bad outcomes. This paper supplies such a theory, drawing on rational-choice accounts of the role of the judiciary in the legislative process. It argues that judicial bias is not harmful in a broad range of circumstances, and that the merits of the reform proposals depend on many factors, including, among others, the degree of supermajoritarianism of the legislative process, the magnitude of legislative bargaining costs, judicial competence, and the extent to which the judicial appointments process and party competition result in an ideologically diverse judiciary.
Recently, many respected business leaders have voiced concern that corporate governance in American public companies has moved toward CEO primacy or a dictatorship of the CEO, and away from traditional notions of shareholder primacy. This article shows that this concern is well-founded. The current system of corporate governance tends toward management indulgences. This is clearly reflected in key legal elements of corporate governance, which embrace increasing laxity. New empirical evidence also suggests that the trend of corporate governance is away from more demanding standards that seem to reduce agency costs and enhance financial and economic performance. The model that best explains corpo-rate governance dynamics are economic models of special interest influence rather than any largely mythical race to ever more optimal corporate governance standards. This article concludes that the sub-optimality of corporate governance is crisis prone and subject to challenge from competing nations. Therefore as currently constructed the system is unsustainable.
In 2003, for the first time, more wiretap orders were issued in the United States under the Foreign Intelligence Surveillance Act of 1978 (FISA) than for all law enforcement actions. This Article provides a thorough analysis of the history and theory of the U.S. system of foreign intelligence surveillance law, and provides proposals for reform. Part I of the Article explains the history of national security surveillance up until passage of FISA in 1978, including discussion of the surveillance abuses revealed by the Church Committee and other Watergate-era revelations. Part II explains the new legal procedures created by the 1978 law. The procedures reflect a constitutional compromise between claims of executive discretion and civil libertarian arguments for prior judicial involvement. Part III discusses the evolution of the law from 1978 until passage of the USA-PATRIOT Act in 2001. Part IV explains the legal changes triggered by the attacks of September 11, 2001. These include: major changes to foreign intelligence surveillance law in the USA-PATRIOT Act; shifts in Attorney General surveillance guidelines; and the first publicly-released decisions by the secret courts created by FISA. Part V discusses the theoretical underpinnings of the current legal regime for foreign intelligence surveillance, including an analysis of the extent to which "everything has changed" since the September 11 attacks. Part VI presents proposals for reform. First, the Article proposes limits on the recently expanded powers to use FISA for records and other tangible objects. In particular, the Article sets forth a new argument for how other legal approaches can replace the "gag rule" that criminalizes disclosure when a FISA order has been served. Second, the Article proposes an alternative approach to the issue of whether there should be a "wall" between law enforcement and foreign intelligence activities. The approach here focuses specifically on the foreign intelligence value of proposed surveillance, rather than inquiring whether an order is sought initially for law enforcement or foreign intelligence purposes. Third, the Article suggests a number of ways to improve the procedures of the foreign intelligence surveillance court system. Fourth, the Article proposes possible new oversight mechanisms that can compensate in part for the necessarily classified nature of these surveillance activities. The law and practice in this area has changed greatly since 2001. Important aspects of the USA-PATRIOT Act are scheduled to sunset at the end of 2005. This Article seeks to create a more informed basis for considering how to achieve national security goals in this area consistent with the rule of law.
How is it that the countermajoritarian difficulty became the central frame for constitutional theory for the last fifty years? That is the question taken up in this, the last installment of the history of the countermajoritarian difficulty. The piece explains in successive sections that the countermajoritarian problem so prominent in legal scholarship is neither the same as the occasional criticism leveled at courts engaged in controversial exercises of judicial review, nor necessarily related to the task of political theory of explaining the legitimacy of any branch of government in a democracy. Rather, the academic obsession with the countermajoritarian difficulty was born out of historically contingent circumstances present at the middle of the twentieth century, circumstances that haunt us still - though they need not. The criticism that courts are acting contrary to the will of the majority has been heard throughout history, but it was most prominent during the Progressive Era. It made sense then, as courts were striking down legislative enactments of recent vintage with a strong democratic pedigree. At mid-century, however, popular criticism of the Supreme Court sometimes included this countermajoritarian claim, and sometimes did not, depending precisely on what the Court was doing. Nonetheless, academics became fixated on the problem, even when the public was far less concerned and the criticism inapt. Why did this happen?It is important to recall that the countermajoritarian problem emerged in the course of justifying judicial review, not criticizing it. After the Realists had exploded the myth that constitutional standards were determinate, academics at mid-century struggled to define a role for courts that justified aggressive judicial review in defense of individual liberty and equality. Their concern about this judicial role was expressed in countermajoritarian terms, not because those terms were apt, but because they echoed the Progressive Era battle cries of their most honored teachers - Thayer, Holmes, Hand and Frankfurter. The problem these academics struggled with was unique to political liberals, who - at that time - supported both halves of the countermajoritarian equation: they approved of the work of the Warren Court, but believed in popular democracy as well. Unlike their predecessors, these academics had come to need the Court, but struggled with their inheritance of skepticism about judicial review.Today, liberal academics are more concerned with criticizing the Court than with justifying its work. Yet, echoing Progressive Era critics, these scholars are attacking the Court by raising concerns about its democratic pedigree. These two projects sound similar, but they are very different. Constitutional "theory" flip-flops between attacking the Court and justifying it, depending primarily on who is sitting on the Supreme Court bench and the agenda they are pursuing. It should not be thus; we need a constitutional theory that is less historically contingent and more enduring. The historical perspective offered here can help us see this.
Frederick Schauer has written a very interesting article (http://ssrn.com/abstract=779386) suggesting that judges who announce rules in the course of adjudicating cases are subject to cognitive biases that interfere with their ability to craft sound rules. In particular, the immediacy of a particular dispute may make the facts of that dispute appear more representative of the classes of facts covered by a rule than they actually are. I agree with Schauer's insight. However, I suggest in a brief reply that certain practices traditionally associated with the common law help to counteract the biases that affect judges. The doctrine of precedent exposes judges to a wider range of fact situations, as well as to the reasoning of past judges. So-called analogical reasoning also greatly increases the range of cases judges consider in designing prospective rules. Both these practices are of questionable value as direct means of deciding cases, but can be valuable as indirect strategies to improve judicial rulemaking. As a result, common law rules may suffer less from distortion than Schauer's theory predicts. However, the traditional practices on which my analysis is based depend on judicial habits that have eroded over time.
By "lay justices" I mean justices of the Supreme Court of the United States who are not accredited lawyers. Currently the number of lay justices is zero, although there is no constitutional or statutory rule that requires this. Commentators who urge that the Supreme Court should be diverse on all sorts of margins - methodological diversity, ideological diversity, and racial or ethnic or gender diversity - say little or nothing about professional diversity on the Court. I argue that the optimal number of lay justices is greater than zero. In the strong form of the argument, an historian, economist, doctor, accountant, soldier or some other nonlawyer professional should be appointed to the Court. In a weaker form of the argument, we should at least appoint dual-competent justices - lawyers who also have a degree or some other real expertise in another body of knowledge or skill.
Drawing upon an analysis of the political vectors behind constitutional reform in Israel (1992), Canada (1982) New Zealand (1990), and South Africa (1993), the article suggests that the trend toward constitutionalization in culturally divided polities has not been adequately delineated by extant theories of constitutional transformation. An examination of the political origins of these four constitutional revolutions suggests that judicial empowerment is in many cases the consequence of a conscious strategy undertaken by threatened political and economic elites seeking to preserve their hegemony vis-a-vis the growing influence of “peripheral” groups in crucial majoritarian policymaking arenas. In response to perceived threats by peripheral groups, elites who possess disproportionate access to and influence upon the legal arena often initiate a constitutional entrenchment of rights in order to insulate policymaking from popular political pressure. Power is transferred from majoritarian decision-making arenas to national high courts, where they assume their policy preferences will find greater support. This process of conscious judicial empowerment is likely to occur (a) when the judiciary's public reputation for political impartiality and rectitude is relatively high and (b) when the courts are likely to rule, by and large, in accordance with the cultural propensities and policy preferences of the traditionally hegemonic elites.
We examine the welfare effects of partisanship in a model of checks and balances. An executive makes a policy proposal and an overseer then decides whether or not to veto the executive's proposal. Both the executive and the overseer have private information as to the correct policy to pursue, and both are motivated by the desire to appear competent. A partisan overseer is one who, in addition to seeking to promote her own reputation, cares how her decision will impact the executive's reputation. Our main result is that partisanship can improve the efficacy of an oversight regime, as the distortions caused by a partisan overseer's desire to affect the executive's reputation can offset the distortions caused by her desire to enhance her own. Our results provide a new rationale for divided government, as partisan considerations are often necessary to prevent the overseer from rubber stamping all executive proposals.
Elections sometimes give policy makers incentives to pander, i.e., to implement a policy that voters think is in their best interest, even though the policy maker knows that a different policy is actually better for the voters. Pandering incentives are typically attenuated when voters learn, prior to the election, whether the policy chosen by the incumbent truly was in their best interest. This suggests that the media can improve accountability by reporting to voters information about whether an incumbent made good policy choices. We show that, although media monitoring does sometimes eliminate the incumbent's incentive to pander, in other cases it makes the problem of pandering worse. Furthermore, in some circumstances incumbent incentives are improved when the media acts as a “yes man”—suppressing some information that indicates the policy maker made the wrong choice. We explain these seemingly paradoxical results by focusing on how media commentary affects voters' tendency to apply an asymmetric burden of proof to the incumbent, based on whether she pursues popular or unpopular policies.
We develop a model of decision-making when managers have private information about their abilities. With no private information about ability, managers ‘herd’. However, with sufficient private information, managers inefficiently ‘anti-herd’. The model potentially illuminates recent empirical work on career concerns.
This essay reviews Eric Posner and Adrian Vermeule’s Terror in the Balance: Security, Liberty, and the Courts, which I consider the most serious, sustained, and thoughtful effort to defend the Bush administration’s aggressive tactics in the war on terror yet written. That the book is ultimately deeply flawed only underscores the failure of the Bush administration’s approach. Where most historians view with regret the excesses of past security crises, from the criminalization of speech during World War I to the internment of Japanese Americans during World War II, Posner and Vermeule advance the contrarian view that the system worked exactly as it should have, because in each instance, executive officials took aggressive action in response to perceived security threats, and courts and Congress deferred to or approved of the executive’s initiatives. In Posner and Vermeule’s view, there is no reason to believe that government officials will overreact during times of crisis, and no basis for judging what executive officials have done, because they have the expertise and access to information that the rest of us lack. I argue that Posner and Vermeule’s argument for deference to the executive is misguided for three reasons. First, their assumption that there is a necessary and “straightforward tradeoff between liberty and security” is far too simplistic. Executives often sacrifice liberty without achieving an increase in security. Security may be advanced in a variety of ways without infringing on liberty. There is no reason to assume that sacrificing liberty is necessary to further security or that such sacrifices are warranted simply because the executive chooses to make them. Second, Posner and Vermeule’s account of the political dynamics of emergency periods fails to take into account significant factors that predictably contribute to overreaching by the executive, infringement of human rights, selective targeting of disempowered minority groups, and institutionalization of authorities that last well beyond the emergency itself. Once these factors are properly considered, there are strong reasons not to defer to executive power, especially in emergencies.Third, the authors’ argument that the executive is best situated to balance liberty and security in emergencies fails to consider the full range of qualities that one might want in an agency tasked to strike such a balance. Precisely because we rely so heavily on the executive to maintain our security, we should be skeptical of its ability to give sufficient weight to the liberty side of the balance. Judicial review plays an essential role in achieving an appropriate balance; deference to the executive undermines that role.
We analyze the interaction between electoral accountability and separation-of-powers as mechanisms for reducing political agency slack. We compare three stylized regimes: a “Unilateral Authority” setting in which the President has exclusive authority over some policy decision; a “Mandatory Checks and Bal-ances” regime in which the President cannot enact the policy unless Congress approves; and an “Opt-In Checks and Balances” system in which the President may seek congressional authorization, but may also act unilaterally. The analysis generates three principal insights. First, voters respond to the risk of politi-cian bias by making the political rewards and punishments for policy success or failure asymmetric. Vot-ers rely less on this instrument, however, when internal checks screen out some undesirable policies. Second, the addition of a veto player need not alter the ex ante likelihood of policy change. Third, voter welfare is highest under the Opt-In Checks regime and lowest under the Unilateral Authority regime.
This paper examines individual decision making when decisions reflect on people's ability to learn. The authors address this problem in the context of a manager making investment decisions on a project over time. They show that, in an effort to appear as a fast learner, the manager will exaggerate his own information but ultimately he becomes too conservative, being unwilling to change his investments on the basis of new information. The authors' results arise purely from learning about competence rather than concavity or convexity of the rewards functions. They relate their results to the existing psychology literature concerning cognitive dissonance reduction. Copyright 1996 by University of Chicago Press.
Political constitutions are incomplete contracts and therefore leave room for abuse of power. In democracies, elections are
the primary mechanism for disciplining public officials, but they are not sufficient. Separation of powers between executive
and legislative bodies also helps to prevent the abuse of power, but only with appropriate checks and balances. Checks and
balances work by creating a conflict of interest between the executive and the legislature, yet requiring both bodies to agree
on public policy. In this way, the two bodies discipline each other to the voters' advantage. Under appropriate checks and
balances, separation of powers also helps the voters elicit information.
This inductive study offers an examination of 23 cases in which informants from firms engaged in large-scale global projects reported unforeseen costs after failing to comprehend cognitive-cultural, normative, and/or regulative institutions in an unfamiliar host societal context. The study builds on the conceptual framework of institutional theory. The findings, which include propositions and a generic narrative model, contribute to theoretical knowledge of how institutional exceptions arise, how they are resolved, and how they typically involve three general phases: ignorance, sensemaking, and response. The findings also articulate the kinds of institutional transaction costs that an entrant incurs in each of the three phases, and the conditions that lead to the growth of these costs. Journal of International Business Studies (2008) 39, 562–588. doi:10.1057/palgrave.jibs.8400370
Lochner v. New York, 198 U.S. 45 (1905), stands as one of the Supreme Court's most reviled decisions. We challenge the critical consensus against Lochner and provide a defense, albeit a contingent defense, of unprincipled judicial activism. To do so, we develop a game-theoretic model of judicial-legislative interaction. We use the model to compare outcomes generated in a system of legislative supremacy to outcomes generated in a system in which judicial review is provided by a legally unprincipled, activist judiciary. We show that judicial review, even when provided by an activist, politicized judiciary, can promote important constitutional values and improve legislative quality relative to a deferential judiciary. In doing so, we identify an important passive component to the effect that judicial review has on legislatures and on legislation. Finally, we demonstrate that the addition of other institutions and constraints on judicial behavior amplify the beneficial effects that judicial review provides to the legislative process.