An Economic Theory of Court Performance: Evidence from the Court of Justice of the European Union

39 Pages Posted: 29 Sep 2019

See all articles by Timothy Yu-Cheong Yeung

Timothy Yu-Cheong Yeung

KU Leuven

Michal Ovadek

KU Leuven

Nicolas Lampach

KU Leuven - Centre for Legal Theory and Empirical Jurisprudence

Date Written: September 11, 2019

Abstract

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

Suggested Citation

Yeung, Timothy Yu-Cheong and Ovadek, Michal and Lampach, Nicolas, An Economic Theory of Court Performance: Evidence from the Court of Justice of the European Union (September 11, 2019). Available at SSRN: https://ssrn.com/abstract=3451889 or http://dx.doi.org/10.2139/ssrn.3451889

Timothy Yu-Cheong Yeung

KU Leuven ( email )

Tiensestraat 45
Leuven, 3000
Belgium

Michal Ovadek

KU Leuven ( email )

Belgium

Nicolas Lampach (Contact Author)

KU Leuven - Centre for Legal Theory and Empirical Jurisprudence ( email )

Tiensestraat 41
Leuven, B-3000
Belgium

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