One of the most prominent explanations of the creation and maintenance of independent judiciary is the "insurance theory" that proposes a positive relationship between political competition and judicial independence. But, does intense political competition inevitably lead to higher levels of judicial independence across all types of democracies? Conducting a large-N cross-country analysis over 97 democratic countries, this study shows that as democratic quality across countries changes, the impact of political competition on judicial independence changes as well. The empirical findings reveal that while in advanced democracies high levels of political competition enhances judicial independence, in developing democracies political competition significantly hampers the independence of the courts.
Ajudiciary that is insulated from legislative and executive influence as well as from other private interests is not only the fundamental principle of the rule of law but also the central precondition for good governance and consolidation of democracy. Independent courts serve as an effective mechanism that controls and constrains the operation and power of the legislature and executive. Independent judges, for instance, have the power to punish political authorities who abuse or misuse their position. On the other hand, through judicial review independent courts can declare legislative acts or government policies unconstitutional. Being insulated from electoral accountability and other political interferences, an independent judiciary may also produce counter-majoritarian decisions. But then why do the elected representatives of democratic countries construct an independent judiciary in the first place and try to maintain it even when the courts do not render decisions in conformity with their interests or policies?
According to the insurance logic of judicial independence, the politicians who face the possibility of losing power seek to limit their opponents by supporting judicial independence. This logic posits that the ruling elites, who expect to fall into minority status after elections, might want to strengthen the courts in order to protect their own rights and liberties once they become political minorities (Ginsburg 2003). In other words, the advocates of the insurance theory emphasize that in the long-run the incumbents may have long-term benefits under an independently performing judicial system. Independent courts are perceived by these incumbents as a mechanism that would protect them from the opposition's attack after future electoral change (Finkel 2008; Ginsburg 2003) or ensure that legally enacted policies continue to be implemented even after they leave office (Landes & Posner 1975). As a result, the proponents of the insurance theory argue that politicians offer independent courts when political competition is intense and incumbents' expectation of winning the future elections is low (Finkel 2008; Ginsburg 2003; Landes and Posner 1975; Ramseyer 1994; Stephenson 2003). Thus, attributing high levels of judicial independence to intense political competition, the advocates of this theory appear to envision a positive relationship between these two aspects.
Although the underlying logic of the insurance theory is quite appealing, it does not explain why we do not see high levels of judicial independence in all democratic countries with high levels of electoral competition. I argue that the cost-benefit analysis that the rational political elites have to undertake while choosing their judicial policies would reflect different trends across advanced and developing democracies. Hence intense political competition would not inevitably lead to high levels of judicial independence across all democratic countries. Thus we should not expect a similar impact of political competition both in advanced and developing democracies.
By advanced democracies I mean regimes where democratic values are fully consolidated and political processes are successfully institutionalized. …