Economic Analysis and the Design of Constitutional Courts

Abstract

Though nominally exercised on behalf of citizens, constitutional judicial review also performs an insurance function for politicians who see themselves losing power in future elections. This paper discusses the various dimensions of institutional design of constitutional courts and argues that the extent and power of judicial review should increase with political uncertainty at the time of constitutional design. The paper then develops a simple empirical test of this hypothesis using data from Eastern Europe, regressing measures for various aspects of court design on the strength of the largest party in the legislature. The paper shows that the design of constitutional courts reflects the interests of dominant political parties, and that more independent and powerful courts are associated with situations of divided or deadlocked politics.