Law and Economics.

• Author: Jolls, Christine
• Position: Program Report

The Law and Economics Program emphasizes economic analysis of processes within courts, legislatures, and government agencies, as well as of the effects and causes of substantive legal rules in the foundational legal subjects of property law, criminal law, contract law, and tort law. Program members meet twice annually, once at a midyear program meeting and again at the NBER Summer Institute.

This article first describes recent research on legal processes and in the foundational legal subjects. It then examines work on the causes and effects of substantive legal rules in the additional areas of consumer financial protection, corporate law, and workplace law.

The Operation of Legal Processes

The operation of legal processes, particularly in courts, is a core emphasis of the program. The operation of these processes in criminal cases in particular has been a focus in recent years as concerns with racially disparate effects of the criminal justice system have grown. Research by David Arnold, Will Dobbie, and Crystal Yang examines the impact of criminal defendants' race on the decisions of judges charged with setting bail requirements. (1) The researchers find that Black defendants are 3.6 percentage points more likely to have to post bail than their non-Black counterparts. Moreover, among defendants required to post bail, bail judges require Black defendants to post amounts that are $9,923 greater on average than those required of non-Black defendants. As Arnold, Dobbie, and Yang note, it is sometimes suggested that racially disparate bail amounts may reflect underlying differences in the risk of misconduct across different groups. The researchers find, however, that marginally released non-Black defendants are 22.2 to 23.1 percentage points more likely to be arrested for pretrial misconduct than marginally released Black defendants. Given this finding, the greater stringency of bail judges' treatment of Black defendants is not well explained by reference to higher misconduct within this group of defendants.

Judges on state supreme courts have been a consistent focus of the program. In recent research, Elliott Ash and W. Bentley MacLeod examine the effects of nonpartisan as opposed to partisan state supreme court judge selection on judicial quality, as measured by forward citations to judges' written opinions. (2) In contrast to federal judges, who are appointed via presidential nomination and confirmation by the US Senate, state supreme court judges are often elected, at times in partisan elections. Ash and MacLeod identify quality effects of nonpartisan selection of state supreme court judges by means of changes in many states, over the course of the second half of the twentieth century, from partisan judicial elections to nonpartisan...