Information and Judicial Review: A Signaling Game of Legislative-Judicial Interaction

This article develops a simple signaling game in which a Legislature and a Court interact in seeking their own policy goals. The Legislature faces two sources of uncertainty when legislating. First, it knows only probabilistically whether the Court's preferences converge or diverge from its own on the proposed law. Second, its knows only probabilistically the true state of the world and, hence, does not know with certainty whether the law will reasonably achieve its intended outcome if enacted. For institutional and sequential reasons, the Court has more information regarding the actual consequences of an enacted law than the Legislature did when initially considering it. As a result, the Court's exercise of the judicial veto may (but not necessarily will) be informationally productive. The possibility of informative judicial review affects the quantity and informational quality of legislation enacted by the Legislature relative to legislation that would be enacted in the absence of judicial review. Further, an informational component to judicial review alters the incentive that the Court has to act strategically relative to incentives for strategic behavior in purely distributive models of legislative-judicial interaction. Finally, because of the possibility of informative judicial review, the model accounts endogenously for the creation and maintenance of an independent judiciary by a Legislature that solelyvalues achieving its preferred policy outcomes. a A Then considering a proposed bill, legislators face uncertainty regarding the outcome they want the bill to achieve and the outcome that the law actually will have when implemented and enforced (Krehbiel 1991, 62). Legislative decision making thus requires prediction as legislators look forward to anticipate the impact a proposal might have if enacted. In contrast, judicial policy-makers tend to be more backward looking. They review laws in light of their realized consequences. This difference critically distinguishes the informational context of legislative decisions from the informational context of judicial decisions. As Felix Frankfurter noted, "In the availability of facts which underlie litigation, there is a wide gulf between opinions in advance of legislation ... and decisions in litigation after such proposals are embodied into law or carried into execution" (1930, 478). As a result, in "the crucial cases," differing judgments of legislature and court over policy "resolve ... not really to a difference about law, but to differences in knowledge of relevant facts and inferences drawn from such facts" (Frankfurter 1924, 1004). Yet the judiciary's distinctive informational role in the policy process and how it influences judicial and legislative behavior has attracted little systematic attention from political scholars.' This article builds upon earlier preference-based models of legislative-judicial interaction by recognizing the informational component of judicial review and incorporating it in a game-theoretic model along with the assumption that the Court is a policy-motivated actor.2 Adding an infor-