Journal of Legal Analysis 

About: Journal of Legal Analysis is an academic journal published by Oxford University Press. The journal publishes majorly in the area(s): Supreme court & Common law. It has an ISSN identifier of 1946-5319. It is also open access. Over the lifetime, 128 publications have been published receiving 2294 citations. The journal is also known as: JLA.

Distributionally weighted cost-benefit analysis: welfare economics meets organizational design

Abstract: Approaches to cost–benefit analysis (CBA) derived from social welfare maximization conclude that it ideally should include distributional weights. Agencies using CBA, however, do not maximize welfare. They perform specialized tasks. Approaches that assume agencies should maximize welfare cannot be used to determine the design of those tasks. This article considers the design of CBA, including the pursuit of distributional goals by mapping optimal distributive systems to tasks performed by specialized agencies. It concludes that regulatory agencies using CBA cannot make distributional adjustments consistent with desirable distributive policies. Therefore, CBA should not include distributive weights.

International Soft Law

Abstract: Although the concept of soft law has existed for years, scholars have not reached consensus on why states use soft law or even whether “soft law” is a coherent analytic category. In part, this confusion reflects a deep diversity in both the types of in ternational agreements and the strategic situations that produce them. In this paper, we advance four complementary explanations for why states use soft law that describe a much broader range of state behavior than has been previously explained. First, and least significantly, states may use soft law to solve straightforward coordination games in which the existence of a focal point is enough to generate compliance. Second, under what we term the loss avoidance theory, moving from soft law to hard law generates higher sanctions that both deter more violations and, because sanctions in the international system are negative sum, increase the net loss to the parties. States will choose soft law when the marginal costs in terms of the expected loss from violations exceed the marginal benefits in terms of deterred violations. Third, under the delegation theory, states choose soft law when they are uncertain about whether the rules they adopt today will be desirable tomorrow and when it is advantageous to allow a particular state or group of states to adjust expectations in the event of changed circumstances. Moving from hard law to soft law makes it easier for such states to renounce existing rules or interpretations of rules and drive the evolution of soft law rules in a way that may be more efficient than formal renegotiation. Fourth, we introduce the concept of international common law (ICL), which we define as a nonbinding gloss that international institutions, such as international tribunals, put on binding legal rules. The theory of ICL is based on the observation that, except occasionally with respect to the facts and parties to the dispute before it, the decisions of international tribunals are nonbinding interpretations of binding legal rules. States grant institutions the authority to make ICL as a way around the requirement that states must consent in order to be bound by legal rules. ICL affects all states subject to the underlying rule, regardless of whether

Creditor Control and Conflict in Chapter 11

Abstract: We analyze a sample of large privately and publicly held businesses that filed Chapter 11 bankruptcy petitions during 2001. We find pervasive creditor control. In contrast to traditional views of Chapter 11, equity holders and managers exercise little or no leverage during the reorganization process. 70 percent of CEOs are replaced in the two years before a bankruptcy filing, and few reorganization plans (at most 12 percent) deviate from the absolute priority rule to distribute value to equity holders. Senior lenders exercise significant control through stringent covenants, such as line-item budgets, in loans extended to firms in bankruptcy. Unsecured creditors gain leverage through objections and other court motions. We also find that bargaining between secured and unsecured creditors can distort the reorganization process. A Chapter 11 case is significantly more likely to result in a sale if secured lenders are oversecured, consistent with a secured creditor-driven fire-sale bias. A sale is much less likely when these lenders are undersecured or when the firm has no secured debt at all. Our results suggest that the advent of creditor control has not eliminated the fundamental inefficiency of the bankruptcy process: resource allocation questions (whether to sell or reorganize a firm) are ultimately confounded with distributional questions (how much each creditor will receive) due to conflict among creditor classes.

Legal Origin or Colonial History

Abstract: Economists have documented pervasive correlations between legal origins, modern regulation, and economic outcomes around the world. Where legal origin is exogenous, however, it is almost perfectly correlated with another set of potentially relevant background variables: the colonial policies of the European powers that spread the “origin” legal systems through the world. We attempt to disentangle these factors by exploiting the imperfect overlap of colonizer and legal origin, and looking at possible channels, such as the structure of the legal system, through which these factors might influence contemporary economic outcomes. We find strong evidence in favor of non-legal colonial explanations for economic growth. For other dependent variables, the results are mixed.

Are Judges Overpaid?: A Skeptical Response to the Judicial Salary Debate

Abstract: The public debate over the need to raise judicial salaries has been one-sided. Sentiment appears to be that judges are underpaid. But neither theory nor evidence provides much support for this view. The primary argument being made in favor of a pay increase is that it will raise the quality of judging. Theory suggests that increasing judicial salaries will improve judicial performance only if judges can be sanctioned for performing inadequately or if the appointments process reliably screens out low-ability candidates. However, federal judges and many state judges cannot be sanctioned, and the reliability of screening processes is open to question. An empirical study of the high court judges of the fifty states provides little evidence that raising salaries would improve judicial performance. 1. the sAlAry debAte Chief Justice John Roberts says that the pay increases that his colleagues have received over the past two decades are so inadequate as to create a “constitutional crisis” (Year-End Report 2007). Justice Kennedy says that “[because of inadequate judicial pay] the nation is in danger of having a judiciary that is no longer considered one of the leading judiciaries of the 1 Faculty at NYU, Duke, and Chicago law schools respectively. Thanks to Jonathan Baker, Scott Baker, Prea Gulati, Kimberly Krawiec, Jayanth Krishnan, David Levi, Raleigh Levine, Richard McAdams, Ann McGinley, Richard Posner, Jeff Rachlinski, Greg Shafer, David Snyder, Jeff Stempel, Joshua Teitelbaum, Un Kyung Park, and participants at seminars and workshops at the University of Chicago, Loyola University of Chicago, Cornell University, Duke University, Ohio State University, the University of Nevada-Las Vegas, the University of North Carolina, American University, and the William Mitchell Law School for comments. Thanks also to the judges who gave us good-natured albeit highly critical feedback. For research assistance, thanks to Jai Damle, John Niles, Craig Porges, Nathan Richardson, Lauren Tribble, Reed Watson, Jennifer Wimsatt, and Matthew Wolfe. Finally, thanks to Mark Ramseyer and an anonymous referee for their review and comments. Winter 2009: Volume 1, Number 1 ~ Journal of Legal Analysis ~ 47 1 48 ~ Choi, Gulati & Posner: Are Judges Overpaid? world” (Hearing 2007a). Justice Alito warns that “eroding judicial salaries will lead, sooner or later, to less capable judges and ultimately to inferior adjudication” (Hearing 2007b). Justice Breyer “believe[s] that something has seriously gone wrong with the judicial compensation system” (Hearing 2007a). Lower court judges, lawyers, public intellectuals, and law professors agree (Parker 2007). One hundred and thirty law school deans signed a letter urging judicial pay increases (Letter 2007). The American College of Trial Lawyers endorses a salary increase (American College of Trial Lawyers 2007). So does Paul Volker, the former Federal Reserve Board Chairman (Volker 2007). The complaints are not new—Chief Justice Rehnquist made them as did his predecessor, Chief Justice Burger (Frank 2003; Holt 2006). And they are not limited to federal judges. State judges and their supporters have been complaining equally loudly about inadequate pay (Schotland 2007; Sherwin 2007; Wise 2008). Judith Kaye, the Chief Judge of the highest court in New York, went so far as to file suit against the legislature and the governor, asserting that the legislature’s and governor’s refusal to provide adequate salary increases for judges was undermining judicial independence and effectiveness (Stashenko & Wise 2008). Are these complaints plausible? How does one tell whether someone—a judge, or someone else—is underpaid? The judges cite data showing that they are paid less than (some) foreign judges and (some) practicing lawyers in the United States and some law professors, but why are these people the relevant comparison? What if these people are overpaid? To evaluate the argument that judges are underpaid, one needs a theory of wage compensation and empirical evidence. However, so far neither theory nor evidence has played a large role in the public debates. The purpose of this article is to generate a debate over the proper theoretical and empirical foundations for determining the optimal level of judicial compensation. Setting out a simple theoretical model of judicial behavior, we demonstrate that the case for increasing the salaries of federal judges is weaker than recognized. However, the case may be stronger for state judges subject to a meaningful risk of job loss. We make several points. First, judicial pay cannot be evaluated in isolation. Pay is but one aspect of judicial compensation—which includes status, tenure, pensions, and the satisfaction derived from doing justice, affecting policy, and wielding power—and working conditions in general, which 2