Constitutional Judicial Review and Political Insurance

Abstract

Considering constitutional judicial review of policy, the power of courts to annul legislation, as a political insurance mechanism to protect against losses from adverse election outcomes, the paper analyzes three questions: First, under what circumstances a political ruler, who wins an election and the right to propose measures of policy, subjects those measures to the checking powers of an independent judiciary. Second, the net expected gains of a political ruler from granting binary choice to the reviewing judiciary rather than open choice. Third, the equilibrium degree of policy review power granted to the judiciary. Differences in the policy preferences of competing politicians, the judiciary and the status quo, the probability of winning an election and the probability that the judiciary confirms legislation passed by the incumbent emerge as the main determinants of judicial review and its political independence.

Keywords: D72, D74, D78, K40, K41

JEL Classification: judicial dispute resolution, constitutional judicial review, judicial independence, political insura