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Testing an application of the political insurance model: The case of the Mexican state-level administrative courts

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  • Bertoli, Paola
  • Garcia, Adriana G.
  • Garoupa, Nuno

Abstract

The insurance model posits that legislators from a specific political party create courts when they foresee a decrease in their political influence. We develop an application to administrative courts. While the traditional insurance version of the model is about present safeguards against future losses from losing political power, the application is about present safeguards against future losses caused by a potentially disloyal bureaucracy. We test the insurance model with the case of Mexico. Mexican states created 32 administrative courts in the period 1974 to 2017. Two characteristics make Mexico an unusual case. First, states created each of these courts in different time periods. Second, states exhibit significant variance in political cycles. Our empirical findings are largely consistent with the application (dealing with disloyal bureaucracy), but not with the more traditional version (preventing losses from changes in power).

Suggested Citation

  • Bertoli, Paola & Garcia, Adriana G. & Garoupa, Nuno, 2022. "Testing an application of the political insurance model: The case of the Mexican state-level administrative courts," Journal of Economic Behavior & Organization, Elsevier, vol. 195(C), pages 272-287.
    • Handle: RePEc:eee:jeborg:v:195:y:2022:i:c:p:272-287
    DOI: 10.1016/j.jebo.2022.01.021
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    References listed on IDEAS

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    1. Pellegrina, Lucia Dalla & Garoupa, Nuno & Gómez-Pomar, Fernando, 2017. "Estimating judicial ideal points in the Spanish Supreme Court: The case of administrative review," International Review of Law and Economics, Elsevier, vol. 52(C), pages 16-28.
    2. Mehmood, Sultan & Seror, Avner, 2023. "Religious leaders and rule of law," Journal of Development Economics, Elsevier, vol. 160(C).
    3. Feld, Lars P. & Voigt, Stefan, 2003. "Economic growth and judicial independence: cross-country evidence using a new set of indicators," European Journal of Political Economy, Elsevier, vol. 19(3), pages 497-527, September.
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    5. Bertomeu Juan González & Pellegrina Lucia Dalla & Garoupa Nuno, 2017. "Estimating Judicial Ideal Points in Latin America: The Case of Argentina," Review of Law & Economics, De Gruyter, vol. 13(1), pages 1-35, March.
    6. Messick, Richard E, 1999. "Judicial Reform and Economic Development: A Survey of the Issues," The World Bank Research Observer, World Bank, vol. 14(1), pages 117-136, February.
    7. Nuno Garoupa & Marian Gili & Fernando Gómez‐Pomar, 2012. "Political Influence and Career Judges: An Empirical Analysis of Administrative Review by the Spanish Supreme Court," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 9(4), pages 795-826, December.
    8. Mehmood, Sultan & Seror, Avner, 2023. "Religious leaders and rule of law," Journal of Development Economics, Elsevier, vol. 160(C).
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