Judicial Auditing MATT SPITZER and ERIC TALLEY 20101020 1 - - PowerPoint PPT Presentation

20101020 1

Judicial Auditing

MATT SPITZER and ERIC TALLEY

報告人：黃君華

2

Background

• The entire judicial branch of government

could be viewed as a delegated decision maker for legislative and executive entities.

• There are some problems of delegation.
• Causes of institutional conflicts :
• 1) imprecision, due to limited information.
• 2) Differences of ideologies
• Combination of the two problems above

3

Chief goal

• Tease out how error costs and agency costs

interact with one another within a judicial system, and how they affect the nature of oversight exercised by upper‐echelon actors on their lower‐level counterparts.

• Using a game‐theoretic model of judicial review

to illustrate how the dual concerns of (1) imprecision and (2) ideological bias affect equilibrium auditing strategies employed by upper‐echelon actors.

4

Main Conclusion

• It leads to a prediction that strategies turn on

which concern tends to predominate.

• If imprecision predominates, upper actors will

tend to adopt an even‐handed (one‐sided) policy

• f intervention. –has few things to do with

precise content of the lower courts’ decision.

• If the concern over political bias predominates,

higher actors will decide whether to review or what intensity to review depending on the conclusion of lower actors.

• Finally, a benefic flows from political differences

between lower‐ and upper‐echelon courts.

5

Road Map

• Section II, game‐theoretic model of judicial

decision making within a two‐tiered hierarchy.

• (which might represent various relationships)
• Section III provides some applications.

6

• II. A Model of Judicial Auditing
• An institutional model of hierarchical judicial

review— which characterizes the equilibrium strategy of the higher actors in auditing, and its relationship to both ideological differences and measurement error within the lower actors.

7

Assumptions

• Rational actor models
• Law‐creating actors have well‐specified

preferences regarding outcomes and that they act in a way that is strategically calculated so as to satisfy these preferences.

8

The Players and Regulatory Environment

• H : the higher actor; L : the lower actor
• H and L interact in a strategic, hierarchical choice

mechanism

• Outcome : a policy, represented as Υ, and the

degree of contractual autonomy accorded to market participants (over the selection of passive restraints for passenger vehicles).

• Υ = ‐∞ means no autonomy; Υ = ∞ means infinite

autonomy

• Binary choice faced by both players: the status quo

ante the law&a “new” regulation

9

• Y₀: status quo, current law; Y₁: the “new” law
• Y₀ = ‐1; Y₁ = 1
• the shift from Y₀ to Y₁represents deregulatory

change (such as NHTSA rescinded a motor vehicle safety requirement).

• L: must review the change and its holding is YL

(overturn or uphold), and YL = Y₀ or Y₁

• H: to or not to review L’s decision; the cost for

auditing is between $0～$1 (distributed uniformly)

• Final outcome: YH (if H reviewed YL); YL (if not

being reviewed)

10

Judicial Preferences (in this model)

• Judicial decision makers’ concerns:
• 1. a legal outcome consistent with their own policy

preferences

• 2. to avoid the administrative costs of reviewing
• thers’ decisions
• It follows that L and H attempt to minimize the

expected sum of (1) the expected squared distance between the final legal outcome YF and their respective ideal points; (2) administrative costs bore personally.

11

• The “ideal point” in Y‐space depends on an

existing state of the world.

• The state of the world represents any

empirical determination relevant to policy choice by judges.

• For example, it might embody scientific

evidence about the marginal net benefits of increasing the autonomy of participants over the selection of safety restraints.

( Ideal points and the state of the world )

12

• The relevant characteristics of the state of the

world is represented by a one‐dimensional random variable X, whose realized value x could be any point on the real line between ‐∞ and ∞.

• x = ‐∞ denotes extremely small net benefits
• f autonomy; x = ∞ denotes the opposite.

13

• 1. Both players begin with identical prior beliefs that X is

distributed according to a normal distribution, with mean 0 and variance 1.

• 1. Figure 1 depicts the classic bell‐shaped structure of

the standard normal probability density.

14

• Given the state of the world, each player’s

ideal point is assumed to be governed by a correspondence between a realized state of the world (x) and a legal outcome (Y).

• For instance, players who value personal

liberty would require a strong evidence to convince them to approve constraints.

• Assuming that player H possess an ideology as

“centrist”, which is represented as y = x, and L’s ideal point is represented by x + θ .

• When θ> 0, L’s is more libertarian that H’s.

15

• 1. Y denotes legal outcomes. Υ = ∞ means infinite autonomy
• 2. x denotes the state of the world.x = ∞ means extremely large net

benefits of autonomy.

• 3. H’s ideal point is represented by y = x
• 4. L’s ideal point is x + θ, and θ = 1,

which means L is more unlikely to constrain individual autonomy.

16

Informational Environment

• The information used to know the state of the world for

players to hear a case can be understood as “a signal”.

• A random variable Z represents the signal received by L
• Z :(true state of the world )+ (some additional noise);

drawn from a normal distribution with a mean equal to the true state of the world (x) and variance equal to 1/ϒ ≥ 0. The precision of L’s signal is ϒ>0 .

• ϒ is the precision parameter; ϒ close to 0 means that

the signal is uninformative.

17

• 2 stages of H’s decision: 1) whether to review

L’s decision; 2) decide the case.

• Stage 1—observe L’s final decision, YL
• Stage 2—observe “Z” (the evidences) directly,

and H gets a second signal “V”.

• V: normally distributed independent of Z, with

mean x and and precision σ ≥ 0.

• “σ”can be interpreted as H’s marginal

accuracy advantage over L.

• “σ” close to 0 means H’s decision not better

than L’s decision.

18

• Figure 3 shows the Interaction between L and H.
• X is about the benefit brought by autonomy.
• Z is about the factual information L receives.
• L’s decision is ‐1 or 1. (ante status quo or new regulation)
• H gets a signal Z or V, and make a decision to uphold or

reverse, which is also equal to ‐1 or 1.

19

Equilibrium Behavior

Concentrate on:

• 1. ideological differences between L and H

(embodied by a value of θ that differs from 0)

• 2. imprecision of L relative to H (embodied by

a value of σ that differs from 0)

20

Three circumstances to observe equilibrium behaviors: Case 1

• Case 1: Auditing for Pure Imprecision (θ=0,

σ =1, ϒ=1/2)

• L would support the new regulation Y₁ when

she observed a relatively high signal (Z), and conversely support Y₀ when observing low signal.

• H would favor Y₁ when the combined signals

are sufficiently high.

21

• 1. L’s Model: Z = 0 is cutting point.
• 2. L’s decision is based on Z to judge the state of the world (x), since L

shares the same ideology as H.

• 3. H’s Model: employ a similar decision‐making heuristic, and tend to

audit only if the expected value of the additional information ≥ the costs of auditing ($0.18).

• 4. The probability that H audits either type of holding is 18%.
• 4. H makes its holding based on Z and V.

22

• The (unconditional) probability that H

reverses L is symmetric and equal to approximately 3.3%

• When the dominant reason for auditing is

imprecision, H tend to adopt a two‐sided auditing procedure.

• H’s information advantage (σ) is positively

related to auditing rate: if σ = ½, auditing rate would fall to less 5% and reversal rate to less than 1%; if σ = 2, the rates would be 36% and 6.7%

23

Three circumstances to observe equilibrium behaviors: Case 2

• Case 2: Auditing for Pure Ideology (θ≠0, σ is

small relative to ϒ) (suppose that θ = 1; σ = 0,ϒ = 1/2 )

• L has a more deregulatory ideology than H.
• High signal leads to supporting the new

regulation; low signal leads to the opposite.

• L needs stronger factual information to uphold a

new regulation (Y₁).

• H would perceive L’s holding as a biased

distortion of the signal.

24

• 1. L’s deciding Model: L would favor the new regulation

(Y₁) only if the evidence from the case strongly support regulation (Z < ‐2.9)

• 2. H’s auditing strategy (one‐sided strategy): not to

review when yL = Y₀ = ‐1 , but more suspicious when yL = Y₁ = 1 (with an auditing rate of 65%)

• 3. H makes its own holding based on the same signal Z

but with different intensity.

25

Three circumstances to observe equilibrium behaviors: Case 3

• Auditing for Mixed Motives (θ≠0, σ is large

relative to ϒ)

• Auditing strategies depend on the incentive

the most dominant.

• The behavior is moving between Case 1 and

Case 2.

26

• Auditing rate in Column 2 is lower than column 1 and

column 3.

• It shows that ideological differences may be beneficial for

upper‐echelon actors.

• As the discussion demonstrates, empirical auditing and

reversal rates need not bear a systematic relationship to political differences when there is variable precision within lower courts.

27

Robustness 1

• The model assumes that there is no cost

imposed by H’s reversal on L.

• If L tends to avoid the cost, L would decide a

case in a manner consistent with H’s ideology, and it allows H to adopt an two‐sided strategy.

• Thus, the reversal costs will tend to dampen

the predicted differences between pure ideology and pure imprecision.

28

Robustness 2

• The model assumes that L has no choice but

hear a case.

• But even in the circumstances that L has some

discretion, the model need not to be nullified.

29

Applications: One‐sided review in legal doctrine

• to reconcile the model with the three levels of

hierarchy

• I. Review of Administrative Decisions : a single

standard adopted for both regulatory and deregulatory actions?

• Motor Vehicle Manufacturers’ Association v.

State Farm Mutual Automobile Insurance Company (a deregulatory case)

30

• NHSTA and the court of appeals : one‐sided

strategies (different standard from regulatory cases)

• the Supreme Court : two‐sided strategies (the

same rigorous standard with regulatory cases)

• Ideology dominant in this case
• Respective Ideologies : Conservative (NHSTA

and the Supreme Court), liberal (the judge of the court of appeals)

• It fits the developed model above

31

Applications: One‐sided review in legal doctrine

• II. Equal Protection Doctrine : single or dual

standard for benign and evil racial classifications

• 1. Metro Broadcasting, Inc. v. Federal

Communications Commission

• The majority of the Supreme Court have

distinct ideology from the government and the lower court—adopt one‐sided strategy

• But the model is least able to predict centrists’

choices.

32

• 2. Adarand Constructors, Inc. v. Pena
• The court’s opinion changed, but still fit the

model.

• The ideological preferences of the

government didn’t shift substantially, so that the strategies of most judges didn’t shift either.

• Moderate judges might slightly change their

strategies as the slight change of state politics.

33

Applications:

Empirical Predictions Based on Competence

• To predict who would be the judges with high

reversal rates.

• As the lower court’s precision falls, the higher

court will move to two‐sided auditing.

• Those lower courts judges with reputation for

lack of precision should face higher empirical reversal rates partly because higher courts move to two‐sided auditing.

• Who will start with a reputation for being

imprecise? Judges appointed for political payoff

• r those ranked by ABA as less qualified.

34

Applications: Deciding Like Cases Alike

• Use the model to explain some breaches of the

principle—deciding like cases alike.

• Two circuits in figure 4:
• The status quo ante is very liberal, and identical

cases come up simultaneously before LC₁ and LC₂.

• LC₁ and LC₂ have different ideologies but

identical precision.

• AC₁ and AC₂ have the same ideology and

precision.

35

• 1. LC₁ (liberal) based on signal Z (conservative)

makes a conservative decision supporting “New Reg”.

• AC₁ (conservative) adopt one‐sided auditing

for LC₁, so that AC₁ would not audit this decision of LC₁.

• 2. LC₂ (conservative)

36

• 1. LC₁ (liberal) based on signal Z (conservative) makes

a conservative decision denoted “New Reg”.

• AC₁ (conservative) adopts one‐sided auditing for LC₁,

so that AC₁ would not audit this decision of LC₁.

• 2. LC₂ (conservative) based on signal Z (conservative)

makes a conservative decision denoted “New Reg”.

• AC₂ (conservative) adopts two‐sided auditing for LC₂,

so AC₂ reviews LC₂.

• However, AC₂ gets a signal V (liberal) to convince AC₂

to reverse LC₂.

• Finally, AC₂ based on the signal V reinstate the status

quo ante (liberal decision).

37

• The case in circuit 1 turns out an outcome of New

Regulation, but the identical case in circuit 2 gets an

• utcome of Status Quo.
• Outsiders might mistakenly criticize that the courts

deciding like cases unlike.

38

Independence and Accountability

• The judiciary has been described as

simultaneously independent of and accountable to other branches of government.

• The arguments suggests that empirical

evidence of one‐sided versus two‐sided auditing may be a helpful diagnostic proxy.

39

• E. Further Work
• This framework may allow some useful

empirical tests of legal procedures, such as the decision to grant certiorari.

• To get the certiorari votes of justices, the

politics of lower courts, and the nature of the

• utcome in the court below is a possible

future work.

40

Conclusion

• A simple framework has been presented for analyzing

a hierarchical system.

• Concentrating on two central reasons for auditing

lower courts.: imprecision and ideological differences.

• While concern over imprecision tends to bring about

even‐handed auditing/ reversal, concern over political bias tends to bring about one‐sided strategies.

• These tendencies may provide a helpful information

proxy by which to evaluate the purported threats to judicial independence.

• Finally, a benefic flows from political differences

between lower‐ and upper‐echelon courts.