This is the first paper to investigate whether the number of high courts in a country has systematic effects both on the quality of its legal system and on its level of economic development more generally. It is theorized that due to the division of labor and a higher degree of specialization, high courts might be advantageous in terms of court productivity. Yet, they might also be disadvantageous in terms of a less coherent legal system. It is empirically tested whether the positive or the negative effects prevail. Results show that a larger number of high courts never has any positive effect; indeed, with regard to some dependent variables, a greater number of high courts is correlated with worse outcomes.Voigt opens the paper by explaining that,
The various effects of different legal origins have been the subject of intense debate in the field of economics for about a decade. The number of courts or, more precisely, the number of complete court hierarchies (sequence of courts, stages of appeal, “vollständige Instanzenzüge” in German) is one difference often attributed to different legal origins. For example, in their book, The Civil Law Tradition, Merryman and Pérez-Perdomo (2007), have a chapter entitled “The Division of Jurisdiction” in which they explain that the typical common law system has a unified court system that might be represented by a pyramid, whereas matters would be quite different in the civil law world (ibid., 86): “There it is usual to find two or more separate court hierarchies, each with its own jurisdiction, its own hierarchy of tribunals, its own judiciary, and its own procedure, all existing within the same nation.”The basic question Voigt is interested in is : What is the optimal number of court hierarchies? Issues that can be thought about include: Does the number have consequences for the (perceived) quality of the judicial system and its effectiveness? What are the implications for broader issues, such as the protection of political rights and civil liberties? Voigt goes on the say,
This paper tests whether the division of judicial decision-making has systematic (economic) consequences. In economic terminology, choosing the optimal number of courts can be thought of as the result of a tradeoff. On the one hand, a higher number of specialized courts allows judges to become experts in specific legal areas, thus allowing them to arrive at decisions faster (i.e., be more productive) and to produce better decisions. This is conjectured to reduce court delay and reduce the number of decisions that are appealed; in short, a higher number of courts is correlated with a higher quality of the judicial system.His conclusions:
Yet, the division of courts into many different legal areas could also have disadvantages. Judges at “single issue” courts could be somewhat removed from the more general developments in judicial decision-making. In the long term, this could lead not only to inconsistencies in judicial decision-making across various legal areas, but also to “narrow” decision-making in which specialized judges keep only “their” legal area in mind, neglecting the effects of their decisions on the more general legal development and also, and of particular interest here, on economic development.
The results show that a high number of court hierarchies never has any positive effect on total factor productivity, civil liberties, or confidence in the legal system. Indeed, some results point in the opposite direction: both the number of court hierarchies and the number of specialized courts explicitly mentioned in the constitution are negatively correlated with political rights as well as with civil liberties. Among particular court hierarchies, high administrative courts are at least marginally detrimental to both total factor productivity and confidence in the legal system. Among the specialized courts mentioned in the constitution, religious, labor, impeachment, and military courts have negative effects on some of the dependent variables tested here.Anyone thinking about making changes to their court system would be advised to consider such results.