Effective Property Rights and Legal Conflict

Catherine Hafer (NYU)
Hannah K. Simpson (IAST and Texas A&M)

Abstract : A large literature assumes that when an impersonal property regime with clear rules and enforcement power exists, trades will be enforced by this authority according to the specified rules. This abstracts away from the fact that property regimes are not omniscient, and thus cannot achieve this allocation; rather, they allocate property according to a second set of rules that prescribe the means by which rights may be asserted in litigation. We build a simple game-theoretic mode to examine the implications of the fact that, even in societies whose property regimes have clear rules and substantial enforcement capacity, effective property rights are determined by conflict. The model treats as active choices whether to attempt to trade, whether to cheat, whether to litigate, and how much to expend in the effort to win the case. Beyond the anticipated result that these regimes are vulnerable to the same distortions that exist in “states of nature,” we obtain novel results: We find that economic specialization improves a property regime’s effectiveness in correctly allocating disputed resources, decreasing property expropriation. This suggests that effective property regimes not only promote specialization, but may actually require some level of specialization to develop. We further find that factor markets may relate to each other in unexpected ways: Rather than all markets benefiting from a more effective property regime, as is conventionally assumed, an increase in a labor market’s efficiency may undermine efficiency in other factor markets by making conflict over capital resources more appealing. Thus the relationship between a state’s property regime and its markets may be more nuanced than previously thought.

Judiciary’s Achilles Heel: Executive Control Via Appointment Power

Sultan Mehmood (Paris Dauphine PSL University)

Abstract : To what extent does the presidential appointment of judges impact judicial decision making? We document a substantial increase in judicial independence as a result of a 2010 judicial selection reform in Pakistan which changed the selection procedure of the judges from the presidential appointment of the judges to the selection of judges by a judicial commission (consisting of peer judges). Using mandatory retirement age as an instrument for new appointments, we estimate the causal effect of the change in appointment procedure on judicial independence. We present evidence against key threats to identification. Analysis of the contents of the cases reveal that better enforcement of laws regulating land disputes with government agencies is a key mechanism driving these results. We find evidence consistent with the selection mechanism where the judges appointed by the judicial commission are significantly less likely to be politically active prior to their appointments compared to the judges appointed by the president. We also find that the regions where more judges are appointed by the judicial commission have higher investments in the housing industry. This is consistent with the anecdotal accounts that suggest that the new selection reform lowered the risk of land expropriation, particularly in the housing sector.

Filibuster Change and Judicial Appointments

Jonathan R. Nash (Emory University)
Joanna Shepherd (Emory University)

Abstract : We consider the effects of filibuster change on judicial appointments, judicial voting, and opinion drafting. The filibuster effectively empowers a minority of forty-one Senators by requiring sixty votes to break off debate on a nomination. We develop a game-theoretic model that explains that the elimination of the filibuster changed the relevant “pivotal Senator” whose support was necessary to secure a nomination. Freed of the power of the minority of Senators, Presidents ought to exercise freer rein in naming judicial nominees closer to their preferred ideology. Moreover, sitting judges who seek elevation to a higher court ought to alter their “signal” that they would be good candidates to match the preferences of the newly-relevant pivotal Senator. To test our hypotheses empirically, we use the 2013 elimination of the filibuster in the U.S. Senate for lower federal court judicial nominations as a natural experiment. Looking before and after the change in filibuster rule, we find statistically significant support for shifts in the characteristics of judges appointed, the voting of sitting judges, and the language used by sitting judges in politically-charged cases.

Political Polarization and Policy Expertise: Theory and Evidence from State Supreme Courts

Tinghua Yu (London School of Economics and Political Science)
Elliott Ash (ETH Zurich)
Bentley MacLeod (Columbia University)

Abstract : We provide theory and evidence on how political polarization at the mass level affects politicians' policy decisions in common value issues. In the model, politicians representing two groups of voters with divergent ideologies compete for office. Voters have limited information about policy as well as politicians' competence in policy making. After observing the incumbent's policy choice, voters make voting decisions. We study two variations of election. First, there is a majority group and a minority group in the society. Second, society is composed of two competitive groups. In both variations, we show that in a society with a high level of polarization, the incumbent politician is more likely to exercise her expertise regarding common value issues. We take these predictions to data in the context of state supreme courts. We find that under partisan elections, judges who joined the court when polarization was high write higher-quality decisions (receiving more citations from other judges) than judges who joined when polarization was low.