Political rents under alternative forms of judicial review

Opponents of bills that are approved in the legislature frequently pursue subsequent judicial challenges based on constitutional grounds in order to overturn them. Such challenges may occur through a specific legal case as in the U.S. (concrete judicial review) or through the petition of an opposition party at the constitutional court as in many parliamentary democracies (abstract judicial review). While the decision-making process of high court justices has been widely studied, the effect of anticipated judicial review on the composition of bills introduced in the legislature has received limited attention. This paper theoretically analyzes how the institutions of concrete and abstract judicial review influence the political rents associated with a bill when the justices decide solely based on the bill's ideological component. The results indicate that abstract review may lead in equilibrium to a greater diffusion of rents across the political spectrum through its anticipatory effect, while the rents under concrete review are more concentrated among the legislative winning coalition. When this is the case, abstract review improves the equilibrium payoff of the party that would be left out of the legislative winning coalition under concrete review and favors those parties that command large rents in the status-quo.