The Influence of Interest Groups on Institutions: Evidence from the American State Courts

Abstract

Previous work has posed a supply-side hypothesis on the nature of judicial decisions in American courts: the civil law origin of some states led them to constrain judicial independence, thus diminishing the quality of their courts. We introduce a complementary hypothesis: entrenched economic interests may use their de facto political power to constrain the supply of judicial decisions. The results suggest that firms representing large, out-of-state economic interests have a low opinion of courts in states dominated by intra-state interests. Further, once controlling for the impact of intra-state interests, a state's legal origin has no significant effect on court output.