The (economic) effects of lay participation in courts: a cross-country analysis

Legal philosophers like Montesquieu, Hegel and Tocqueville have argued that lay participation in judicial decision-making would have benefits reaching far beyond the realm of the legal system narrowly understood. From an economic point of view, lay participation in judicial decision-making can be interpreted as a renunciation of an additional division of labor, which is expected to cause foregone benefits in terms of the costs as well as the quality of judicial decision-making. In order to be justified, these foregone benefits need to be overcompensated by other actually realized benefits of at least the same magnitude. This paper discusses pros and cons of lay participation, presents a new database and tests some of the theoretically derived hypotheses empirically. The effects of lay participation on the judicial system, a number of governance variables but also on economic performance indicators are rather modest. A proxy representing historic experiences with any kind of lay participation is the single most robust variable.