The Law and Economics of Entrenchment

Abstract

Should law respond readily to society’s evolving views, or should it remain fixed? This is the question of entrenchment, meaning the insulation of law from change through supermajority rules and other mechanisms. Entrenchment stabilizes law, which promotes reliance and predictability, but it also frustrates democratic majorities. Legal scholars have long studied this tension but made little progress in resolving it.

This Article considers the problem from the perspective of law and economics. Three arguments follow. First, majority rule can systematically harm society—even when voters are rational (i.e., not passionate) and no intense minority is present. This is because of a collective action problem created by transition costs. Second, entrenchment is unnecessary when bargaining is easy, but it offers a second-best solution when bargaining is hard. This helps explain why some laws are entrenched but not others. Third, the optimal degree of entrenchment depends on a distinction existing scholarship ignores: whether the transition costs associated with a change in law are variable or fixed. Given variable costs, the argument for entrenchment is even stronger than scholars realize. But given fixed costs, the argument weakens. To overcome fixed costs, outdated laws require major change, but entrenchment encourages only minor change. This mismatch relates to an age-old question: when, if ever, should judges update entrenched law through interpretation? In one sense, judges can beneficially update in a way that democracy cannot.

These ideas cast doubt on work by originalists, living constitutionalists, and others. They have implications for legal design and constitutional law, and they plant seeds for a new and fruitful field: the law and economics of entrenchment.

Keywords: entrenchment, constitutional amendment, constitutional design, legal stability, originalism, judicial updating