The Tragedy of the Judiciary: An Inquiry into the Economic Nature of Law and Courts

Abstract

AbstractThis Article explores the economic nature of law and courts as an explanation for the world’s endemic court congestion problem. The economic theory of goods and services is used to demonstrate that law has a dual nature—coercion and compliance—and that law as coercion is actually a club good that requires a complementary good to be useful, courts. But because courts are private goods in nature, the bundled product will behave as a private good. However, the unrestricted implementation of access-to-justice policies with the objective of increasing the people’s access to courts will transform the bundled product into a common pool resource. The counterintuitive result of this transformation is that granting unrestricted access to justice might actually prevent people from accessing their rights—the tragedy of the judiciary. Two policy implications are explored: The importance of legal certainty for the tragedy mitigation, and the potentially adverse selection problem resulting from court congestion.