The quality of a state's judicial system is an important determinant of economic growth and vitality. The decisions made within state judicial systems affect the degree to which private property rights are well-defined and enforced, which is an essential building block for entrepreneurial activity and economic growth. The key link between free-market institutions, such as secure property rights, and entrepreneurial activity has been demonstrated by Kreft and Sobel (2005) and Ovaska and Sobel (2005). Bad court decisions often infringe on the individual liberties and freedoms that are essential underpinnings for civil society and a well-functioning market economy (see Dorn 1985 and others in that special issue of the Cato Journal on this general topic).
In addition, decisions made within state judicial systems also have important effects on the cost of doing business in a state. Poor liability rules reflected in state judicial decisions have been blamed for high medical malpractice rates, high workers" compensation rates, and high automobile insurance rates in many states. Judicial decisions also impact the costliness of mandates and other regulations faced by businesses. Thus, it is clear that the judicial system is important for economic activity, and thus so is the selection mechanism that is used to determine the membership of state courts.
States use different methods for the selection of judges. In 29 states, the governor or legislature appoints judges, while in 21 states popular elections are used to select judges. (1) Among those states that elect judges, 8 rely on partisan elections, in which the judicial candidates run as a member of a particular political party, while the 13 other states use nonpartisan elections. (2)
The extremely politicized nature of partisan elections casts some doubt on their ability to efficiently select unbiased judges. The 2004 state supreme court election in West Virginia provides a good example. This was the most expensive judicial election in the nation in 2004, with the Democratic incumbent spending $376,000 to the opponents $540,000. In addition, this spending was dwarfed by the spending on political advertisements and publicity by other groups in the state. One pro-incumbent group spent more than $1 million by itself, while the largest anti-incumbent group spent $2.5 million. The organized labor union interests in the state took the incumbent's side while the business associations supported the challenger. The candidates themselves ran on political platforms reflecting their party affiliation. The incumbent, well known for his reputation of deciding cases for labor interest and against business interests, stressed this reputation in his media ads, while the challenger outwardly vowed to decide cases in a more business friendly manner if he were to be elected.
In partisan election states, citizens are used to this political bias in judicial elections, and there is no veil of judicial decisions being unbiased. Public opinion polls from these partisan election states confirm this claim. Geyh (2003) cites polls from Texas and Ohio that find more than 80 percent of adults believe that campaign contributions to judges running for election have a significant influence on subsequent judicial decisions they make.
If an unbiased and fair judicial system is important, it is clear that having judicial candidates run for office on political platforms, with heavy support from labor or business groups, works contrary to this goal. In this article, we focus on two issues related to the determinants of judicial quality. Do states using partisan elections have lower judicial quality? If so, do states with partisan judicial elections have judicial outcomes that clearly differ depending on which political party controls the court?
The article proceeds by first reviewing the previous literature on judicial appointment versus judicial election. We then continue by presenting data on the quality of state judicial systems and on other measures of judicial outcomes, and attempt to uncover the impact of partisan elections, and of specific party control. …