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Wednesday, November 30, 2011

The Pursuit of Justice: The Law and Economics of Legal Institutions

Public Choice analysis is the application of economic reasoning—principally the idea that human action is primarily self-interested—to questions drawn from politics and government. It was famously described by James Buchanan as “politics without romance.” To date most Public Choice research has focused on the behavior of political actors. Less attention has been paid to the behavior of (arguably) less political figures, such as judges, juries, prosecutors, and police. As a result Public Choice has delivered on the promise of “politics without romance” but has not done as much to show us “law without romance.” The Pursuit of Justice addresses this shortcoming by demonstrating how Public Choice theory can help us better understand our law and legal institutions.

In his introductory essay editor Edward López states the core idea advanced in the book: “[I]f we want to understand why the legal system sometimes fails to perform up to our ideals and expectations we must analyze the incentives available to actors in the legal arena and the institutions that set the ‘rules of the game.’” This focus raises the question of whether Public Choice analysis differs from the “economic analysis of law” advanced by Ronald Coase, Richard Posner, and others. López maintains that while “there is little fundamental difference between” the two on methodological grounds, there seems to be a difference “in the character of the reforms they recommend.” According to López, Public Choice emphasizes constraining political actors while the economic analysis of law emphasizes “arranging institutions to minimize transactions costs.”

Benjamin Barton’s chapter on the “lawyer-judge hypothesis”—which might be the marquee contribution to this volume—argues that “if there is a clear advantage or disadvantage to the legal profession in any given question of law, judges will choose the route that benefits the profession as a whole.” Barton offers a number of examples drawn from numerous areas of the law that support the hypothesis. Charles Keckler’s outline of recent changes in the cy pres doctrine that enable judges to award unclaimed funds from class actions to “law related entities such as law schools” fits squarely within this analysis.

The other nonquantitative contributions deal with more familiar topics. Nicholas Curott and Edward Stringham do a nice job retelling the story of Anglo-Saxon law as a spontaneous order that focused on victim compensation and how it was replaced by a centralizing Norman legal order after 1066. Ilya Somin takes dead aim at the use of eminent domain by local governments bent on “economic development,” and John Bratland argues that “just compensation” in cases of government takings fails as an ethical matter. Adam Summers recounts the case against government licensure of lawyers and argues for market-based alternatives.

Three chapters that use numerical data and summary statistics all include suggestions for reform. Roger Koppl offers a strong critique of the current use of forensic science in criminal justice administration. Government-run forensic laboratories make mistakes in testing crime scene evidence—television dramas to the contrary notwithstanding. Testing at multiple labs simultaneously would reduce the number of mistakes, but money for multiple testing is unlikely to be sought by the law enforcement bureaucrats who handle the laboratories’ budget requests—in part because the bureaucrats are likely more interested in maximizing the number of convictions than in the disinterested pursuit of truth. Koppl argues for triplicate testing of fingerprint evidence on the grounds of cost savings; his most conservative estimate is that $9 million in extra testing would save taxpayers $61 million in prison costs by “eliminating over 98 percent of the false felony convictions” caused by errors in fingerprint analysis.

Jeffrey Hammond explains class-action litigation as a vehicle for rent extraction, using the government lawsuits against the tobacco companies as a strong example.

The book’s three chapters that use regression analysis all find fault with the election of judges at the state level. Russell Sobel, Matt Ryan, and Joshua Hall suggest nonpartisan elections as an alternative. They also relate overly aggressive prosecutions to the election of public prosecutors. Adrianna Cordis finds that judicial elections contribute to government corruption, but does note a 2008 article by Alt and Lassen that finds the contrary to be true. Aleksandar Tomic and Jahn Hakes explain judicial sentencing of criminals as a function of whether the judges face political pressure. While all three papers will doubtless enter the long-running debate over state judicial selection, they are unlikely to provide a knockout punch to the supporters of judicial elections.

In all, this book is an excellent contribution to the Public Choice literature.