Legal Realism for Economists

Abstract

Economists have made great progress in understanding the incentives and behavior of actors who operate outside of traditional economic markets, including voters, legislators, and bureaucrats. The incentives and behavior of judges, however, remain largely opaque. Do judges act as neutral third-party enforcers of substantive decisions made by others? Are judges "ordinary" policymakers who advance whatever outcomes they favor without any special consideration for law as such? Emerging recent scholarship has started to explore more nuanced conceptions of how law, facts, and judicial preferences may interact to influence judicial decisions. This work develops a perspective on judging that can usefully be understood as the modern manifestation of American Legal Realism, a jurisprudential movement of lawyers, judges, and law professors that flourished in the early twentieth century. The purpose of this essay is to introduce, in simplified form, the Realist account of judicial decision making; to contrast this view with alternative theories about law and judging; and to sketch out how a more explicit integration of the Realists' conceptual insights about law and judicial behavior might enrich the rapidly expanding economic work in this field.

Courts in a transition economy: Case disposition and the quantity–quality tradeoff in Bulgaria

“…In the absence of judge or case level data, which would allow us to paint a more nuanced picture of the functioning of courts, we offer a conjectural explanation and leave a more detailed analysis of this issue for future research. Our argument builds on legal realists' premise that judges, like everybody else, trade off work for leisure (Posner 1993, Beenstock and Haitovsky 2004, Stephenson 2009). In order to increase leisure, incumbent judges may therefore rationally choose to decrease their work effort, and hence productivity, in response to new judicial appointments (Beenstock and Haitovsky 2004: 366).…”

Overcoming institutional voids via arbitration

“…There are at least two dimensions: (1) the amount of the outcome (specified in dollars or performance) and (2) the costs of the resolution process (court, administrative, and lawyer costs) (Stephenson, 2009). Setting the costs for BICA will be one of the first scheduled decisions by the arbitrators or may be assessed by a standing body prior to the formation of the arbitral tribunal (Heuman, 2003;Redfern et al, 2009).…”

Quantitative Analysis of Judicial Voting

“…As we saw in the introduction, an alternate model of judicial decision-making is the so-called "legal" model (Segal and Spaeth 2002;Posner 2008;Stephenson 2009). A judge in deciding whether to uphold a strike by a union may vote differently if the constitution includes a specific right to strike versus a right to association versus no mention of such a right at all.…”

“…How the law is actually applied in the context of specific fact situations may also be important (Cameron and Kornhauser 2017;Stephenson 2009). Cameron and Kornhauser (2017) argue that there is a need to expand on the attitudinal model by developing models and datasets that identify 'case space', situating cases based on their facts and the law.…”