An Economic Analysis of Judicial Activism

The objective of the paper: The authors argue that, over a period of time,
judicial activism from solely focussing on and being concerned with the
wellbeing of the socially excluded, judicial system has now come to
directly deal with a whole gamut of issues and institutions: the
environment, consumer affairs, political parties, municipal corporations,
etc. The widening of the subject matter, the authors argue, has deemed
judicial activism to be active agents of social (and economic) change. The
authors, instead of venturing into an ideological debate about judicial
activism, discuss the economic aspects and spheres of the discourse in
terms of information and resources.
To understand, therefore, the economic efficiency of judicial activism its
social cost and benefit is the chief objective of the paper.
Methodoly: No econometric tools were used. The authors explain
Transaction Cost and its effects by analysing the relevant literature and
putting forth arguments, very much what laywers typically do. The
strenght of the paper is therefore not on how the ideas have been
concluded, rather, the auhors, in a logical analytical way express their
argument in a form a narrative. This of course, makes thier paper
'available' to a wide audience.
Core idea of the paper: The authors argue that since the 1950s the
Supreme Court of India inflated its reach in not just in interpreting the
tenements of the constituting, but began to actively engage in ideas of
social justice, from time to time. Therefore, the judiciary actively protected
the Fundamental Rights, especially those pertaining to certain
disadvantaged classes women, dalits, etc. The course of action to
achieve this objective (expansion, production and interpretation) of social
justice was through the PIL (Public Interest Litigation). The motive behind
the PIL, therefore, was to provide the marginalised with the mechanism
through which/ by which they were also to address their grievances as
they had no recourse to politico- societal administrative institutions. The
PIL, subsequently, opened its system to issues of broad public interest
issues. The judiciary, therefore, in this way began to engineer social
change and operate directly, symbiotically with society, independent of
the legislative. This is a rather recent development. Pratap Bhanu Mehta
has called this phenomena The Rise of Juristocracy.
The paper, therefore, performs an economic analysis on the efficiency of
the allocation of judicial resources by way of judicial activism.
How do the authors define activism? The authors link the doctrine of
separation of powers and the notion of transactional cost. Separation of
powers is required as the legislative, executive and legislature fulfil
distinct tasks and have different responsibilities; they help to keep each
other in check, and prevent excessive power to be wielded by a single
institution, which could undermine liberty.

To put it crudely: judicial activism is when the judiciary performs activities

that go beyond the constitution purview of the institution when, for
example, it becomes an active agent of social change; when it makes
policy decisions rather than adjudicating arguments and creates its own
space to define the idea of a nation ( in terms of development, etc).

Therefore, the authors focus on the functional manifestation of this

constitutional provision; using the idea of transaction cost do they define
judicial activism. By transaction cost they mean the cost of establishing
and maintaining property rights. Lack of information, along with
uncertainty (unknown chance, immeasurable risk) creates transactional
cost, to put it simply: it is the texture of transactional cost which put force
behind establishing and maintaining property rights. The authors
opertationalize activism by stating that it is when an institution acts in a
manner that trespasses on anothers turf, hence, an activist court is
one wherein it imposes a judicial language and procedures for social
solution.
The authors using this conceptual definition go on to conceptualize the
state. They argue that the state acts to generate social change and order.
For this purpose, if there was no transactional cost, the institutional form
of the state would not matter. The fact that the state has a variety of arms
and institutions, which it encompasses, which are related to each other in
complex was, specified by the constitution, suggests that there does
exists substantial transaction cost.
The three branches of the state executive, legislature and judiciary are
equipped to deal with different categories of information; they function on
different dimensions of information, quite distinct from each other bodies.
Separation of powers, therefore, argue the authors, seeks to maintain
these doctrines. To put it simply, therefore: the separation of powers as it
delimits the information into different blocks, each to deal with one,
minimises transaction cost. But, the problem is of incomplete information,
the point here, however, is the core competence of the institutions
designed by the doctrine of separation of powers process information.
Separation of powers is needed because each institution keeps a check on
the other , in other words, the separation of powers is a bulwark on the
misuse of power.
Judicial Activism, argue the authors, is when a court imposes a judicial
outcome which requires a judicial or executive solution or arbitration.
There are three ways by which the judiciary can play the role of an activist
(and hence, cross the lakshman rekha), interpreting the constitution, is
one way, argue the authors. The authors place this argument in the
context of the Keshavananda Bharati case in which the Supreme Court
held that the Parliament doesnt have the authority to amend the basic
structure of the constitution, the Court, however, in the judgment did not
define what the basic structure of the Constitution is. In the Bal Mukund

Sah case, the court held that the Parliament cant amend the procedure to
appoint Judges to High Court and Supreme Court citing the basic
structure of the Constitution argument, in this way, hence, defining it on
its own terms, in a rather arbitrary manner.
The court played the role of the legislative body in the Vishaka Vs the
State of Rajasthan case: The Supreme Court, as it felt that there werent
adequate protections of women in the workplace against sexual
harassment, set a guideline; constructed a policy to prevent sexual
harassment in the workplace. What the Judiciary was doing was creating a
statue for prevention.
Thirdly, the Judiciary, through the instrument of the PIL, directed the use
of CNG in Delhi to reduce pollution. Experts argued that this solution by
the court should have been subjected to scientific scrutiny before being
passed as judgement. That the court enforcing laws, implementing issues
of public policy, argued the critics, was inefficient.
Issues of distribution, economic development evolves with society. Society
is a highly dynamic entity, therefore, policies which target distribution and
economic development need to be flexible, interpretational, activist role of
the judiciary, hence can, be useful.
However, the executive and the legislative functions performed by the
judiciary can, often, be inefficient. The authors argue so because when the
judiciary crosses borders the Social Cost can exceed Social Benefit. This is
so because judicial decisions dont take into consideration what Rousseau
would call popular will, nor do they have the technical expertise to
make public policy decisions.
Now, the limitation of the study is that the authors have two ideas that are
particularly problematic: on representation and on institutional change.
The authors argue that the courts mustnt step out of the line because
they dont have the popular mandate, they dont represent the people.
This argument, however, does not hold from a social contract
understanding of the process. The courts, as institutions, which emanate
from the constitution and its ideals, in a democracy, are supposed to
protect the Citizenship, the Rights and Freedoms of people. That is the
popular mandate.
Second, the authors argue that the court is static as an institution since
they make the argument of courts not having the technical expertise.
Institutions change. The judiciary can (must?) incorporate the mechanisms
which go behind the making of public policy.

Adhip Amin
1214501
BA (Hons) Economics.