An Economic Theory of Court Performance: Evidence from the Court of Justice of the European Union
39 Pages Posted: 29 Sep 2019
Date Written: September 11, 2019
We propose and test a new theory of court performance. Unlike most previous research on the economic performance of courts, we develop a simple formal model that emphasizes the existence of a trade-off between decision-making speed and quality. Drawing on neoclassical consumer choice theory, we presuppose that judges and courts derive utility from delivering quality decisions quickly while facing a budget constraint. We hypothesize that both quality and speed decrease as a consequence of growing backlogs, whereas the opposite effect should be observed if courts' resources increase. We apply an instrumental variable approach to disentangle the simultaneous determination of quality and speed and we estimate the effect of backlog and resources on both using an original dataset comprising the entire universe of cases brought before the Court of Justice of the European Union. We find robust evidence of a negative effect of backlog on both speed and quality but the theorized positive impact of increasing resources is less robust. We also find that the creation of new courts did not have the desired positive effect on speed but it did lead to an increase in quality.
Keywords: Court performance, Court of Justice, European Union, Instrumental variable approach, Judicial Speed, Reforms, Quality
JEL Classification: C23, D24, K41, O52
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