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American Law and Economics Review V4 N2 2002 (341-370)
© 2002 American Law and Economics Association

Article

The Effect of Electoral Institutions on Tort Awards

Eric Helland and Alexander Tabarrok

Eric Helland, Claremont-McKenna College, and Alexander Tabarrok, The Independent Institute and George Mason University

Send correspondence to: Alexander Tabarrok, Department of Economics, George Mason University, Fairfax, VA 22030.

Abstract

We argue that partisan elected judges have an incentive to redistribute wealth from out-of-state defendants (nonvoters) to in-state plaintiffs (voters). We first test the hypothesis by using cross-state data. We find a significant partisan effect after controlling for differences in injuries, state incomes, poverty levels, selection effects, and other factors. One difference that appears difficult to control for is that each state has its own tort law. In cases involving citizens of different states, federal judges decide disputes by using state law. Using these diversity-of-citizenship cases, we conclude that differences in awards are caused by differences in electoral systems, not by differences in state law.


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