An Economic Analysis of Judicial Activism

Author(s): T. C. A. Anant and Jaivir Singh

Source: Economic and Political Weekly , Oct. 26 - Nov. 1, 2002, Vol. 37, No. 43 (Oct. 26 -
Nov. 1, 2002), pp. 4433-4439
Published by: Economic and Political Weekly

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 Special articles

An Economic Analysis
of Judicial Activism
Over time it is not just the rights of the 'socially excluded' that have been put up for judicial
review and intervention; a whole gamut of issues such as the environment, consumer affairs,
property rights, the practices of municipal corporations, educational institutions,
politicians and political parties, to name a few areas, have been presented before the
courts to prescribe public policy outcomes. This widening of subject matter has caused Indi
judicial activism to be celebrated as a device of engineering social change. We propose
an examination of judicial activism using the positive tools of economic analysis. The
singular value of such an analysis lies in placing judicial activism in relation to the norm o
economic efficiency. This enables a discussion in which one does not present the problem
as one of contesting ideologies, but in terms of the impact of judicial activism on the allocation
of resources. In the first section of the paper we outline the tools for the analysis. We
establish a link between the doctrine of separation of powers and the notion of transaction
costs and use this to define activism. In the second part we use the definition to perform a
heuristic economic analysis of judicial activism. Our conclusions are mixed: while we see
some virtue in what we call interpretational judicial activism, other forms of judicial activism
that encroach on legislative or executive decision-mnaking on grounds of privilege can
result in social costs that outstrip benefits.

T C A ANANT, JAIVIR SINGH

Judicial activism in India has been

organisations to approach the Supremewere put up for judicial review and inter-
perceived in certain quartersCourt
as a and high courts on the behalf ofvention but also a whole gamut of issues
those unable to do so themselves - 'in the
success of constitutional governance, such as the environment, consumer affairs,
while others have sought to condemnpublicit,
interest'. Typically these cases dealtproperty rights, the practices of municipal
often with the specific charge thatwith the
gross violation of rights - many ofcorporations, educational institutions, poli-
themthe
judicial activism movement has caused involving women as rictims, in ticians and political parties, to name a few
locations such as prisons and remandareas, that were presented before the courts
judiciary to overstep the bounds of 'proper'
judicial behaviour. The appearance ofHuman right violations were alsoto prescribe public policy outcomes. This
homes.2
discovered to be manifest in the abysmalwidening of subject matter has caused
judicial activism in India can be function-
work
ally correlated with the emergence of conditions faced by some of theIndian judicial activism to be celebrated
Public
Interest Litigation (PIL), though itpoorest
would sections of Indian society - as a device of engineering social change.
be erroneous to think of PIL1 and particularly
judicial prominent were some cases ofIndeed, the very characterisation of judi-
bonded labour.3 This course of action hascial activism has been linked to social
activism as being necessarily synonymous.
Starting in the late 1970s, in a series of
been interpreted by Sangeeta Ahuja as onetransformation, as in a recent work by
where
cases, the Supreme Court enlarged its reach"The courts intended it [i e, PIL]S P Sathe, where he defines an activist
and jurisdiction in two ways. One,to bybere-
a mechanism through which thecourt in the following manner: "A court
grievances
interpreting the Constitution to expand the of those unable to participategiving new meaning to a provision so as
in political, administrative and legal pro-to suit the changing social or economic
scope and content of various fundamental
rights, and two, by moderating the cesses
ancientcould be addressed."4 However, asconditions or expanding the horizons of
requirement of locus standi (standing Ahujaandnotes, the advent of the PIL sub-the rights of the individua) is said to be
interest) for access to judicial remedies sequently opened up the possibility of thean activist court".7 In the same breath he
and redress. As a consequence, where courts it
relaxing procedural requirements in goes on to state that such activism "can
cases which involved 'broad' public inter-be positive as well as negative". Since it
was felt that there had been gross violation
of fundamental rights, procedural require-est issues.5 Thus, over time it was not just is not always possible to have a determi-
ments were eased to enable individuals or the rights of the 'socially excluded'6 thatnate discourse on "expanding the horizon

Economic and Political Weekly October 26, 2002 4433

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of the rights of the individual" and the conceptually on the construct of transac-The common thread that seems to run
arena of the 'social and economic' is also tion costs, in-order to examine the social
through the various formulations of trans-
action costs is the premise that agents
open to contest, Sathe's mode of analysisimplications of the doctrine being breached.
suggests that the evaluation of judicial The notion of transaction costs first typically make decisions under some form
activism lies in the juxtaposition of one's.made an appearance in the renowned The of ignorance. It is to overcome the un-
perspectives of social and economic change Nature of the Firm in which Ronald Coaseknown costs of a running economic system
against the standards of the activist court.observed that economic agents often con-that agents coalesce to create institutions
It is perhaps this that leads Upendra Baxifront a choice between transacting in the that impact on the frequency and volume
of trade. Similarly, because agents do not
to state in the preface to S P Sathe's bookmarket and locating the transaction inside
that "Judicial activism has no permanenta firm.9 Coase argued that the choiceknow of what will happen to their 'property',
essence and its histories are merely the institutional form depended on trans- they are driven to negotiation, tenurial
chronicles of contingency".8 agreements, contract stipulation and
action costs, where the idea of transaction
We propose an examination of judicialcosts was conceptually introduced as "thevarious other devices to protect their
activism using the positive tools of eco-cost of using the price mechanism".10 'property'. To re-state this differently,
transaction costs can be said to be endemic,
nomic analysis, if for no other reason thanSubsequently, the term transaction costs
as an instrument that can encompass thehas come to be widely used in the study because information problems are endemic.
histories of activism that S P Sathe has of economic phenomena, though it con-However, this connection between trans-
chronicled. While such an analysis could tinues to defy being pinned down byactionan costs and information has to be
be perceived as being deaf to certain made with caution - the costs of informa-
all-encompassing definition. (Transaction
'voices', its singular value lies in placing
costs have been invoked in many instances
tion may be necessary for transaction costs
judicial activism in relation to the norm to be present but clearly they are not
with different meanings - this multiplicity
of economic efficiency. This enables cana possibly signal that the term is con-
sufficient. The plain presence of risky
discussion in which one does not present jured up whenever one wants to avoid events can without doubt, be covered by
the problem as one of contesting ideologies,critical examination of costs,Il or morecontingent contracts - however, for trans-
but in terms of the impact of judicial likely, the concept can be viewed asactiona costs to be substantially present,
activism on the allocation of resources. In there has to be another element which
robust analytical tool akin to marginalism
the first section of this paper, we outlineand substitution.12) In a recent survey impairs the ability to write contingent
the tools for the analysis. We establish a Douglas W Allen distinguishes twocontracts. To get a sense of this other
link between the doctrine of separation ofdistinct definitions and uses for the term element, it is useful to refer to the distinc-
powers and the notion of transaction costs transaction costs.13 One he labels as tion between risk and uncertainty sug-
and use this to define activism. In the second the 'neo-classical' definition, which gested by Frank Knight.15 Risk, for Knight,
part of the paper we use the definition toemphasises the costs of trading in the market
was the category of known chance whereas
perform a heuristic economic analysis of and the other he calls the 'property rights'uncertainty was perceived as being more
judicial activism. Our conclusions aredefinition, which revolves around the costsdiffuse and immeasurable in character, so
mixed, while we see some virtue in what of establishing and enforcing property much so that it is very difficult to write
we call interpretational judicial activism, rights. The property rights definition can
up a contract to eliminate it. Such uncer-
other forms of judicial activism that en- be traced back to the other remarkable tainty can arise due to an inability to quantify
croach on legislative or executive deci-paper written by Ronald Coase, 'The the great unknowns, or because of the
difficulties associated with disclosure of
sion-making on grounds of privilege, canProblem of Social Cost', which begot the
result in social costs that outstrip benefits. famous Coase Theorem.14 Following privately held information. Both types of
lack of knowledge add to the cost of
Douglas W Allen, let us associate the term
Defining Activism property rights with the ability to freely
decision-making. In fact, it is this element
exercise a choice over a good or serviceof uncertainty that perhaps explains why
To construct an economic interpretationand view transaction costs as the costs of society is not organised around a collec-
of judicial activism and possibly activism establishing and maintaining propertytion of complete contracts but about a
more generally, we frame our discussion rights. These definitions imply that theseries of institutions - institutions that
against a constitutional scheme and invokenotions of property rights and transactionare centred on the notion of a residual
the doctrine of separation of powers. As costs can be linked up. If it is held thatdecision-maker with the power to decide
is well known, this doctrine states that in a particular instance that property rightsin unspecified circumstances.
under a constitutional scheme, the state are complete, then it is tantamount to saying
should comprise of three separate decision- that there are no costs associated with Transaction Costs and Separation
of Powers
making entities - the legislature, the execu-exercising these rights. Stating this in the
tive and the judiciary - where each of these obverse is to say if transaction costs are
institutions is endowed with specific zero, the delineation of property rights canThis leads to the question whether the
powers and is required to fulfil distinctbe ignored, which is precisely the act concept
of of transaction costs can give us
directives and tasks. As is the case with stating the Coase theorem. The fact thatsome insight into the nature of an insti-
many social science constructs, this doctrinein many instances property rights are tution such as the state. Applying the
can be viewed in its structural or functionalprotected and maintained suggests that definitions spelt out so far, one can view
manifestations. In this paper we seek to transaction costs are endemically present.
the state as exercising a choice over order-
develop the functional aspects of theThe contentious question is, of course, ing (regulating?) society, and in turn con-
separation of powers doctrine, drawing what are these 'transaction costs'? fronting the myriad costs of establishing

4434 Economic and Political Weekly October 26, 2002

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and maintaining such choices. In this legislature performed an allocation. Again, The lesson that we extract from this is
context, the Coase Theorem or something even if bargaining was not possible, butthat the correct assessment of the under-
akin is immediately apparent. If there were the court/legislature had access to perfectlying distribution of components of an
no transaction costs incurred towards information, the use of either rule wouldallocation problem is vital for the optimal
be efficient. The distinction between the
establishing and maintaining the order that allocation of resources - particularly so for
use of a property rule or a liability rulenon-market institutions such as the state.
the state aspires towards, the institutional
form of the state would not matter. The comes to the fore when parties are unableThis then leads to the question: how best
fact that diverse institutional forms co- to bargain and information regarding thecan. such assessments be made; to explore
cost of avoidance and harm is imperfect.this question is to basically ask how in-
exist within the state suggests the presence
of substantial transaction costs. In such instances, an assessment of whichformation can best be processed in a society.
To get at the nature of these costs, werule is better depends on the nature ofUsing the categories offered by the doctrine
need to appreciate the distinction in the distribution of costs and harms. It turns out of separation of powers, one could re-
types of decisions that different institu- that in general it is more efficient to usespond by listing the nature of information
tions comprising the state are expected to liability rules if the underlying distributionsthe legislature, the executive, and the
make. To begin elucidating on this, con- are independent and symmetric. It is also judiciary are equipped to process. The ideal
sider the problem of allocating the fre- the case that if the problem on hand in-or representative legislature is presumably
quency spectrum.16 The problem can be volves idiosyncratic valuation of the re-outfitted to capture the preferences of the
schematically approached as either one of source in question, wherein the partiesvoting population, and is therefore em-
a legislative orjudicial concern, where the involvedhave different private assessmentspowered to legislate laws, keeping in mind
democratically elected legislature can be of the resource, a property rule wouldthe distributional impact of such laws on
viewed as being empowered to create and dominate over a liability rule. This is sothe population. The executive executes the
abrogate rights, and the judiciary can bebecause the use of a property rule willwill of the legislature, implementing it by
seen as the institution that enforces rights,ensure that transfers will take place onlyprocessing data that draws on scientific,
and in the absence of clearly assignedif the valuation of the owner is less than epidemiological and statistical studies. The
rights, assigns liability on the principlesthe valuation of the potential taker. If aexecutive can be viewed as a hierarchical
of tort law.17 Thus, the problem could be liability rule were to be used in such cir-body that makes technical decisions in
resolved in two ways. Rights over the cumstances, with compensation being the face of incomplete information. The
spectrum could be created, where potential based on average values, more than optimaljudiciary resolves disputes in cognisance
future users would have to contract with level of takings or dispossessions will takeof procedural, statutory and constitutional
the right-holder to use the spectrum.18 place. Interpreting these results in a broadlimitations. Since judicial decisions nec-
Alternatively, the liability principle could sense, the choice between the two rules isessarily need to be perceived as being fair,
be employed and people allowed use of ultimately determined by an assessment ofjudicial information is garnered from
the spectrum in an unfettered way: if their the distribution of the relevant attributes contesting parties in conformity with
independent action harms anyone then the across the pertinent population. stipulated rules of evidence and procedure.
aggrieved party can go to court to seek This discussion also crucially brings out Since the act of adjudication sorts through
compensation under the principles of tort. the interconnected and nested aspect of the conflicting evidence to come up with a
If the law and economics literature were social choices in question. At the top is decision, one can perceive a court to be
appealed to for deciphering this problem, a decision on whether to create explicit typically structured to make the decision
it would fit in with the distinction between rights or not. (Note that the decision to under conditions of imperfect informa-
property rules and liability rules, pointed create property rights enfranchises some tion. Thus, it appears that three branches
out in the celebrated paper by Calabresi at the expense of others not so privileged.) of the state are equipped to deal with
and Melamed. 1920 It could then be argued This judgment is, as we noted, a function different categories of information and
that the choice between using a property of the distribution of valuations over the should act at different stages and places
rule or a liability rule is a function of thepopulation. After this decision, we come to in the hierarchy of nested decisions in-
transaction costs associated with each two possible second level decisions: first, volved in social allocations. In fact the
alternative, with the corollary that inifthe we decide to create rights, then whompossibly more significant inference could
absence of a transaction costs, the two should one enfranchise and second, what be that since the legislature, the executive,
would be equivalent: a manifestation of the mechanism for doing so should be. The and the judiciary process uniquely distinct
the Coase theorem. A subsequent paper by mechanism can be market based, as in categories of information, the separation
Louis Kaplow and Steven Shavell pro- auctions, or through a system of purposiveof powers doctrine acts to minimise trans-
vides a systematic analysis of the choice allocation. Each system has its own limi- action costs. It follows from this that
between using a property rule or a liability tations, which have been widely discussed allocation problems themselves should
rule to allocate resources.21 The best way in the literature and also in the Indian be paired up with the appropriate institu-
tion to gain an efficient solution.
to phrase their argument is to stack their media recently - in the context of allocation
results, one in relation to the other. At the of the frequency spectrum, petrol pumps, Accordingly, consider the problem of a
top of the heap is the case where there are contestation over a surplus jointly pro-
and other publicly created rights. Alterna-
no transaction costs and consequently as duced by the contesting parties. Since the
tively, we may not create rights, in which
an application of the Coase theorem, both case the problem is one of deciding rules
amount contributed by a party to output
liability and property rules lead to an for restitution and ex post compensationis
inprivate information, which has to be
efficient outcome. If this were the case, case of a harm/s rising due to unilateral
translated into verifiable evidence by each
then it would not matter if a court or a actions in a system of ambiguous rights.
party, the mediating authority is obliged

Economic and Political Weekly October 26, 2002 4435

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to assess competing claims. In such an Esprit des Lois, he defines liberty, as
static, often changing with technological
instance it is only rational to hold that a "Liberty is a right of doing whatever the
change. For instance, it could be said that
judicial body, with its rules of procedure the representational benefits of national
laws permit, and if a citizen could do what
and evidence, act to process the imperfect legislatures stand diminished on accountthey forbid he would be no longer possessed
information. A similar argument would of liberty, because all his fellow citizens
of the growth in communication and trans-
also suggest that a liability regime, with port.22 However such qualifications would
do have the same power".23 Thus,
decisions over contesting claims - which not fundamentally detract from the dis- liberty is the freedom to act unless law
party should bear the liability and what tinctions that we draw, because our central
prohibits the act. Further, Montesquieu
should be the value of the liability - is best concern is to point to the core competency investigates the character of the restraining
left to the process of adjudication. laws, i e, the nature of the institutions that
of the institutions designated by the doctrine
In contrast, dealing with a famine be- make and implement laws. The essence of
of separation of powers to process categories
longs to a very different class of problems. of information. It is also essential not to his argument is that since governments
For this, it is essential to possess statis- have three powers - the legislative, the
misinterpret our formulation as saying that
tical, technical and epidemiological transaction costs can explain or justify theexecutive and the judicial - concentrating
knowledge, to mitigate the uncertain ef- doctrine of separation of powers. To takethese powers in any one or two bodies
fects of the famine. This clearly is an would lead to the violation of political
such a stance, it would require us to show
example involving decision-making under how the presence of transaction costs leadsliberty. It is precisely this that the separation
incomplete information. A hierarchical ex- to the separation of powers. Instead we of powers counters, because "it is necessary
ecutive, structured through its rules and have used the notion of transactions costs,from the very nature of things that power
procedures to assess technologies and or more specifically the information costs should be a check to power".24 Thus, in
the costs of avoidance/abatement, is best of social decision-making, to deduce thatthe Montesquian design it is not ideologies
equipped to solve problems under such problems confronting the state can be bestand beliefs that check power, but the struc-
conditions of incomplete information. solved by being placed in the appropriatetural presence of counter-powers. This has
The executive branch of the state can niche carved out by the doctrine of sepa-recently been formally captured in the work
be conceptualised analogously to the ration of powers. Note that the argument of Laffont, who shows that separation
Firm: the Firm is an entity that makes we have made so far is completely func-improves social welfare because it reduces
quantitative decisions on price, quality tional. Separate institutions or hybrids canthe quantum of wasteful (rent seeking)
and quantity of the good produced inequally an achieve the efficiency gains weactivity in the political system.25 A com-
environment of known risk; so too does have outlined above. Strict separation,bination of the two approaches, functional
the executive. however, requires an additional struc-and structural, together provides a strong
There is, of course, yet another class of tural element to the argument. justification for separation.
problems. Society is a cooperative endeav- The rationale for such separation, accord- The link between transaction costs and
our, so it must create conventions to ing to Montesquieu - the progenitor of thethe separation of powers can be utilised
coordinate the cooperation. However it isdoctrine - is political liberty. In the famousto construct a definition of activism. Thus,
not always possible to coordinate all human
activities with self-enforcing conventions
or norms, because in many cases strategic GIDR is Looking for Faculty
behaviour forestalls the emergence of
norms. In such cases, the diktat of the law
The Gujarat Institute of Development Research (GIDR), Ahmedabad
is essential for the cooperative endeavour
to survive. The question then arises as to
offers young scholars positions at the levels of Assistant Professor
who will make such laws. This is a con- and Project Associate with Ph.D Degree in Economics, Sociology,
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the individual, and upon aggregation across
recognized by ICSSR and offers UGC salary scales.
all individuals, i e, society as a whole.
Political thought over the last 300 years
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or so suggests that a democratically elected
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people as a whole. If such a stance is publication of the advertisement.
accepted, we can infer that questions of
the nature and content of rights should be The Institute reserves the right to consider deserving individuals who
left to the legislature. may not respond to this advertisement.
Some qualification is in order. The
formulation we have spelt out is schematic Director
in nature - in practice there can be con-
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siderable overlap across different
institutions of the kind of transaction cost Gota, Post Gujarat High Court
they minimise. It must also be realised that AHMEDABAD 380 060
transaction costs in themselves are not

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activism can be defined as an institution
activism because a judicial outcome sub-taking on the function of the legislature
and creating a statute. While legislative
- the legislature, the executive or thestitutes as a resolution to a problem that
judicial activism has been relatively rare,
judiciary - extending its mechanism ofcould be said to require a legislative so-
decision-making, on the grounds of executive judicial activism has been far
lution. In India, as in many democracies,
more frequent.
privilege, into problems that are the fortethe Supreme Court has periodically inter-
of some other institution. In terms of this preted the Constitution. For instance, in
definition, an activist court is one that Keshavananda Bharathi vs State of Executive Judicial Activism
imposes a judicial outcome to a problem Kerala26 it has analysed the power of
that requires legislative or executive parliament to amend the Constitution. Though
It a number of cases can be in-
attention. It may be crucially noted that was held in this case that the 'basic struc- voked to illustrate executive judicial ac-
by this definition, one can also point to ture' of the Constitution could not be tivism, the starkest examples can be found
executive or even legislative activism. For amended, though it is not entirely clear in the judgments and orders surrounding
instance, when an executive body takes on from the judgment as to which structural a PIL that aimed to reduce vehicular
a problem with asymmetric information, elements are basic. Subsequently, some pollution in Delhi. In response to this PIL
it can be said to act in an activist manner the Supreme Court proceeded to issue a
sense of the 'basic structure' can be pieced
if it ignores judicial procedures. Thus, antogether from other cases. For instance number
in of remarkable directions. These
executive body performing a judicialthe case of Bal Mukund Sah,27 it was held include restrictions on the plying of all
function without taking into account the that the conditions for appointment commercial
of vehicles (including taxis)
principles of natural justice would be anjudges to the Supreme Court and the high which are over 15 years old; ban on supply
activist executive. Similarly, legislative courts cannot be amended, even by con- of loose 2T oils at petrol stations and service
garages; augmentation of public transport
activism would be manifest if a legislature stitutional amendment. This sample of cases
were to fix a price not on the basis of costs shows how a court can creatively give
(stage carriage) to 10,000 buses; elimina-
and demand, but on the basis of the meaning to constitutional provisions and tion of leaded petrol from NCT of Delhi;
numerical size of competing groups, as directives. Before the Keshavananda replacement of all pre- 1990 auto-rickshaws
has happened with respect to the public Bharathi case, the notion of the 'basic and taxis with new vehicles on clean fuels;
sector in India with obvious ill effects. structure' was absent and parliament had steady conversion of the entire city bus
Though this definition plainly opens and up took recourse to an unfettered right fleet (DTC and private) to single fuel mode
the door to analyse many demonstrations to amend the constitution.28 on CNG; new Interstate Bus Terminals to
of activism, we use it here to open a critique If the act of interpreting the Constitution be built at entry points in the north and
of judicial activism. can be labelled as interpretational judicial south-west to avoid pollution due to entry
activism, from a certain perspective, so canof interstate buses; and even some specific
Judicial Activism the act of easing procedures in cases of restrictions on school buses.30 It may be
human rights abuse. The early PILs werenoted that these are all directions that relate
On the basis of the definition spelt actsout,of interpretational judicial activism in to the choice of technology, inputs of
one can suggest that judicial activism that can the courts 'interpreted' procedural law production, location of bus stations, etc,
be of three forms - interpretational, to leg-uphold basic human rights. However which are customarily choices made by a
islative and executive - each having one dis-cannot think of PILs exclusively in thisfirm or the executive branch of the gov-
tinct implications on allocation, It is pre-manner because much of the human rights ernment. Thus, this is clearly a case in
cisely because there has been an inad- abuse was sourced in executive, legislativepoint of executive judicial activism.
equate understanding of the different and judicial failure, and the courts moved
character of these interventions that the consciously to drop procedural require- An Economic Critique
discourse has been either to laud or con- ments precisely to circumvent these im- of Judicial Activism
demn judicial activism on the basis of pediments. The logical extreme of this is,
ideologies rather than by evaluating the in the event of persistent legislative/execu- It is undoubtedly essential to construct
phenomenon in terms of consequences on tive failure that the courts act to take on and reconstruct social and other categories
allocation. To view the distinction between the tasks of these institutions, as indeedonce it is realised that the world is never
the various forms of judicial activism, it the Indian judiciary has done in manyspatially or temporally static. In the ab-
is helpful to invoke and describe the instances in the recent past. sence of any creative interpretation, those
contents of some representativejudgments who practice law would find themselves
under each head. Legislative Judicial Activism trapped at a point in both time and space.
Thus interpretational judicial activism has
Interpretational Judicial Activism An example of legislative judicial a vital role in making social connections,
activism is manifest in the famous judg-both temporally and spatially. To analyse
Courts are often called upon to interpretment of Vishaka vs State of Rajasthan.29this category of activism, an economist is
the Constitution. If the Constitution is In this case aggravated by the fact thatrequired not to look at choice within a set
perceived as a set of constraints imposed civil and penal law in India does notof constraints, but to be sensitive to the
on a nation to pre-empt subsequent acts protect women from sexual harassment in choice of constraints, both over time and
that are compelling at the moment but may the work place, the Supreme Court hasspace. While such an enterprise is not
be destructive to the nation as a whole, the
specified a model law to prevent sexualattempted here in any formal sense, some
harassment. This is clearly not an act of
call forjudicial interpretation is, by its very examples can provide a heuristic under-
nature, an act of activism. It is an act of standing of the point being made.
interpretation, but an instance of the courts

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 The idea that 'all men are created equal' terpretations cannot remain static and mustjudgment with a judicial decision. Further
has had different meanings in different evolve with society. it is important to realise that mandamus
places and times. In the US it has variously If one is interested in efficient allocation
only directs the executive to act but does
meant white male citizens, all male citi- of resources across space and time, inter-not seek to substitute the judgment of the
zens and all citizens. This sequential pretational judicial activism can assist thisjudiciary for that of the executive. This
construction has involved the courts, never process by allowing the judicial system todistinction is crucial since in contrast in
more contentiously than in the infamous be flexible towards altering the interpre-the case on vehicular emissions in Delhi
Dred Scot case.31 In an act of judicial tation of its mechanisms.33 Therefore it even though the decisions originate in a
activism, the American Supreme Court can be held that this form of activism is executive committee, they have been
beneficial, or at least potentially benefi- formulated as court orders and can be
felt that since the founding fathers of the
US had not mentioned the category of cial, particularly when it is operationalised modified only by further court orders.
African-Americans in the Declaration of within the limits of judicial competence. Turning to legislative judicial activism,
Independence, this implied "that it would However legislativejudicial activism andapropos our earlier analysis, judicial
not in any part of the civilised world be
executive judicial activism, by their verydecision-making is again clearly unsuited
nature, extend judicial decision-makingto garnering a sense of the distribution of
supposed to embrace the Negro race, which
by common consent, had been excluded into the realm of executive and legislativepreferences in a society. In the instance of
problems. In these instances, the socialthe Supreme Court setting out a model law
from civilised governments and the family
costs of outcomes may greatly exceed anyon sexual harassment at the work place,
of nations, and doomed to slavery". Thus
slavery was justified on the grounds of social benefits that may accrue from thereferred to earlier, it is not clear if the
original intent. This judgment can and hasactivist endeavour. As we have argued,writing of the judgment has in itself rem-
been criticised for not adequately under-judicial modes of processing information edied the problem it sought to dispose. An
are not equipped to make technical choicesexample of the problem can be gathered
standing the implications of the constraint
(institution) of slavery. If instead, theor sample the distribution of preferencesfrom a letter written by Saheli - a promi-
judgment had been open to interpreting thein a society. nent women's organisation - and 20 other
category of slavery in consonance with the If this is appreciated, it is no surprise that organisations to the National Commission
the specifications imposed by the Supreme
times, it could be argued that the American for Women in response to a move by the
civil war may have been averted. Thus, Court to control vehicular pollution in commission to propose a Draft Bill on
interpretational judicial activism is a de-
Delhi have been criticised extensively. It Sexual Harassment at the Work Place
vice through which the changing mores of
has been held that technical experts should ostensibly based on the Vishaka judg-
a society can be grasped by the law en-have evaluated the possibility of introduc- ment.35 The letter expresses both reser-
suring thereby the effectiveness of the ing other 'clean fuels' before the imposi- vations about the proposed bill and the
judicial system itself. tion of the now mandatory CNG conver- need for extensive consultations in fram-
To push the point further, consider sion of all commercial vehicles. It has also ing such a law. There are questions raised
judicial review across the globe. In virtu- been argued that specifying fuels and in relation to the preamble, definitions,
ally all democratic systems there are con- specific technologies is a poor second to procedures and damages, among other
stitutional provisions to review executive, notifying realistic emission levels and things. The letterconcludes by emphasising
legislative or judicial actions. Such judi- leaving the market to choose technology,the point that 'in-depth discussions' are
cial review is a component of the consti- engines and fuels.34 Thus, it is not unto-essential ,before any bill is formulated.
tutional processes of the state and a device ward to maintain that decisions pertainingWhile this letter targets a specific pro-
to advance the basic democratic and hu- to the control of vehicular emissions in posed bill, the point it raises about the
man values outlined in the Universal Delhi or elsewhere should ideally be left necessity for extensive consultations be-
Declaration of Human Rights. In spite to anofexecutive body, which is in a position fore filling up such 'legislative vacuum'
this common understanding of human to draw on relevant scientific and statis- is very important. Perforce for any law to
values, the precise interpretation or trans-tical data, besides being flexible to changes be created, it should ideally reflect the
lation into practice varies across cultures.in technology and external conditions. The distribution of preferences of the popula-
For instance in the US, freedom of speech Supreme Court, in its decision-making tion that the law covers.
is protected by the doctrine of 'clear and
process, did rely on the Bhure Lal Com-The persistent justification of the courts
present danger', as stated in Brandenburg mittee, set up under a Writ of Mandamus. in all cases of either executive or legisla-
vs Ohio.32 The Italian constitutional However,
court Mandumus in common law is tive judicial activism has been that the
emphasises that freedom of speech extraordinary writ issued to a person courts have been forced to take an activist
an is
protected, unless it should create a or 'dan-
an agency. It requires that there is a duty stance precisely because of executive or
ger', but it does not specify that the dangerunder the law to perform the act, the plaintiff legislative failures. However this activism
be 'immediate'. In contrast the West has a clear right to such performance and cannot substitute for the failed institu-
German constitutional court has forbidden that there is no other adequate remedy tions, any more than, allegorically speak-
speech directed at impairing the liberal- available. The writ is not awarded as a ing, equating marginal costs to marginal
democratic foundations of the state, with- matter of right but rather at the discretion benefits in all markets in response to the
out considering the element of actual of the court. Therefore the powers of the prevalence of in optimal conditions in one
'danger' present. These differences court
inin this context should be viewed as market can insure a global optimum. Ju-
interpretation and emphasis arise from the being circumscribed; one cannot dicial activism, or for that matter other
clearly
specific cultural and historical evolution use the presence of a writ of mandamus activism, acts to breach separation of
of societies. It is also clear that such in- to justify the substitution of executive powers, which in turn upsets transactional

4438 Economic and Political Weekly October 26, 2002

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efficiency and raises social costs. If indeed 13 Allen (1999). following quote: 'Though by far the legislature
14 Coase (1960). must be responsible for the formulation an
the executive or the legislature has become 15 Knight (1921). promulgation of principles of conduct which
dysfunctional - rotten boroughs of obso- 16 One has to be careful with the choice of -are of general and prospective applicability
lete executives and unrepresentative leg- the example since rights can be assigned byto a given community for an indeterminate
the state or created through common usage.numberof situations, administrators must apply
islatures - the solution is not in expanding
Iu case there is a prior pattern of usage as withsuch general and often specific principles
the judicial enterprise, but in restructuring within the community - even though
clean air, clean water, etc, then rights
the dysfunctional institutions. assignment will require compensation andadministrative orders and regulations often
In closing we would like to return to the the distinction between a rights based rule andhave certain legislative aspects; and the
a liability-based rule vanishes. However if courts must also apply the prescriptions of
Montesquian doctrine. It could be argued legislators or the generalised principles
the legislature is not obliged to justify the
that our critique of activism can be coun- compensation then the above example deduced from a series of precedents to
will apply to a wide variety of situations individual disputes. Such a separation of
tered by a call to refashion the activist functions is not confined to the democratic
and not just new commodities and activities
institution so that it is formulated as a
where there is no prior pattern of usage. doctrine of separation of powers: it is a part
hybrid institution, incorporating the func- 17 In a traditional formulation a court will assess of the essential structure of any developed
tional characteristics of the institution it tort liability by determining the following legal system. In a democratic society, the
conditions - presence of harm, identification process of administration, legislation and
seeks to substitute. Thus courts could resort
of cause and the injurer's obligation to prevent adjudication are more clearly distinct than in
to the vehicle of referendums to elicit harm. The last requirement is sometimes atotalitarian society. Equally discretion assumes
dispensed with.
popular preferences or create subordinate freedom to choose among several lawful
18 In India this has been done by vesting all such alternatives of which the judge is entitled to
executive bodies, as is implicit in the offices
rights in the state, which then proceeded to choose the one that appeals to him, not a choice
of amicus and judicial commissioners.auction them to potential users on pre-spccified between two decisions, one of which may be
However, it needs to be noted that this type
contracts. said to be almost certainly right ad the other
19 Calabresi and Melamed (1972). almost certainly wrong, but a choice so nicely
of hybridisation is the analogue of a con-
20 It needs to be realised that property and liability balanced that once it is announced, a new right
stitutional coup where one institution seeksrules are not an exhaustive description of and a new wrong will emerge in the announce-
to replace another. Functionally it may rights. As Calabresi and Melamed (1972) point ment.' Managing director, ECIL Hyderabad
out, we can also use 'inalienability rules'. An and Others v B Karunakar, 1993, 4 SCC 727.
promote efficiency, but this is potentiallyinalienability rule precludes even voluntary34 See for example Pundir (2002).
at the cost of liberty, a price that may
alienation (sale or donation) by the right-holder35 Letter dated November 12, 2001, written by
become unsupportable. [13 himself. In our example it would take the form Saheli and 20 other organisations, addressed
of a right-holder in a frequency spectrum being to Vibha Parthasarthi, Chairperson, National
unable to transfer it to another user-acondition Commission for Women New Delhi.
Address for correspondence: partially present in the frequency allocation.
anant@cdedse.ernet.in 21 Kaplow and Shavell (1996). References
22 The size and composition of representative
processes have changed over time. TheseAhuja, Sangeeta (1997): People, Law and Justice,
Notes changes have reflected both developments in Vols I and II, Orient Longman, New Delhi.
technology as well as social thought. Thus weAllen, Douglas W (1999): 'Transaction Costs' in
I It is vital to realise that PILs are not the same have moved from the small assemblies of adult Boudewijn Bouckaert and Gerrit De Geest
as class action suits; the latter still do not have men in ancient societies to the confused chatter (eds), Encyclopedia of Law and Economics,
formal legal sanction in India. In a class action, of the World Wide Web. Our experiments with Edward Elgar and the University of Ghent,
the dispute is couched in terms of a violation representation continue with our concerns for http://encyclo.findlaw.com/0740book.pdf
of the conventional law of torts, contract or rights of the media and freedom of information. Baxi, Upendra( 1985): 'Taking Suffering Seriously:
even property, with the qualifying addition 23 Montesquieu (1949), p 150. Social Action Litigation in the Supreme Court
that one of the parties comprises of a class of 24 Id. of India' in Dhavan, Sudarshan and Khursid
affected persons. Typically a class action suit 25 Laffont (2000). (eds), Judges and Judicial Power, Sweet and
requires a certain number of affected people 26 AIR 1973 SC 146. Maxwell - Tripathi, Mumbai.
to join before it is so designated. 27 State of Bihar and Anr vs Bal Mukund Sah Calabresi, Guido and Douglas A Melamed (1972):
2 Among many other cases see, for example, for and Ors, 2000, 4 SCC 640. 'Property Rules, Liability Rules and
under trail prisoners: Hussainara Khatoon v 28 For instance in 1951 the Supreme Court struck Inalienability: One View of the Cathedral', 85,
Bihar 1979 SC 1360; prison inmates: Sunil down the reservation of seats in medical and Hanrard Law Review, 1089-1128.
Batra v Delhi Administration AIR 1982 SC engineering colleges on a communal basis.Cheung, Steven N S (1983): 'The Contractual
1473; remand homes: Munna v State of UP AIR (State of Madras v Champakam Durairajan Nature of the Firm', 26, Journal of Law and
1982 SC 806; women in protective custody: AIR 1951 SC 226) The executive and the Economics, 1-21.
Upendra Baxi v UP (1983) 2 SCC 308. legislature responded by amending the Consti-Coase, Ronald H ( 1937): 'The Nature of the Firm',
3 See for example Bandhua Mukti Morcha vs tution and adding Article 15(4) and 16(4) to 4 Economic, 386-405.
India (1984) 3 SCC 161 and Bandhua Mukti enable the government to make communal- (1960): 'The Problem of Social Cost', 3 Journal
Morcha v India AIR 1992 SC 38. reservations. In yet another instance, in response of Law and Economics, 1-44.
4 Sangeeta Ahuja, Vol I (1997), p 6. to the Supreme Court striking down land reformKaplow. Louis and Steven Shavell ( ): 'Property
5 Id. legislation on grounds of conflict with the Rules versus Liability Rules: An Economic
6 Upendra Baxi has introduced this term withright to hold property, the legislature proceeded Analysis', 109, Harvard Law Review, 713-90.
the intent to replace the term PIL. He argues to add Schedule IX to the Constitution, whichKnight, Frank (1921): Risk, Uncertainty and Profit,
that such change in terminology helpsforeclosed in the law from ever becoming void Houghton Mifflin Company, London.
distinguishing the nature of intervention on andthe grounds that it violated a fundamentalLaffont, Jean-Jacques (2000): Incentives and
the class of issues raised in India from those right. This foreclosure was to be effective, Political Economy, Oxford University Press,
that the term denotes in the US. He maintains notwithstanding the judgment, decree or order Oxford.
that in the US, PIL is used as a device to of any court. Montesquieu, Baron de (1949): Tile Spirit ofthe Laws,
represent group interests against the 29 (1997), 6 SCC 241. tr Thomas Nugent, Hafner Press, New York.
government, whereas in India PIL is associated 30 Among other orders, see interim orders datedNiehans, J (1987): 'Transaction Costs' in John
with state failure and the repression of poorer July 28, 1998 and September 22, 1998 that Eatwell, Murray Milgate and Peter Newman
sections of society. See Baxi (1985). followed from Writ Petition (Civil) No 130295/ (eds), The New Palgrave: A Dictionary of
7 Sathe (2002), p 5. 1985 put in front of the Supreme Court by Economics, MacMillan, London, 676-79.
8 Sathe (2002), p xii. M M Mehta. See also M C Mehta vs Union Pundir, B P(2002): 'The CNG Vehicle Programme
9 Coase (1937). of India (2000), 9 SCC 519. in Delhi' in 3i Network (ed), India Infrastructure
10 Id. 31 Dred Scott v Stanford 60 US 393 (1856). Report, 2002, Oxford University Press, New Delhi.
11 Niehans (1987). 32 Brandenburg v Ohio, 395 US 444 (1969). Sathe, S P (2002): Judicial Activism in India,
12 Cheung (1983). 33 This point is very nicely captured by the Oxford University' Press, New Delhi.

Economic and Political Weekly October 26, 2002 4439

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