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The Legislative Design of Judicial Review

A Formal Analysis

Judicial review of agency decisions clearly affects policy outcomes, both because the courts can overrule an agency's decision and because the threat of judicial review can affect the agency's choice of policy. At the same time, however, judicial review does not simply `exist', but rather is a political variable that a legislature can use to affect policy outcomes. This paper explores how a legislature can use judicial review to influence policy outcomes and examines how review can affect the utility received by each actor. The game-theoretic analysis demonstrates that (1) legislatures can use judicial review strategically in order to obtain more-preferred outcomes, (2) a legislature's ability to improve policy outcomes through the strategic employment of judicial review is not wholly dependent on its ability to respond to the judiciary's actions (i.e. on having the last move in the policy game), and (3) the judiciary's type (i.e. the extent to which it acts restrained) influences outcomes and the actions of the legislature. Finally, I examine the design of judicial review in environmental policy to illustrate and support the theory.

Key Words: courts • game theory • judicial review • legislatures

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