A Costly Signaling Theory of "Hard Look" Judicial Review


Judges often review decisions made by government actors, such as agencies or legisla-tures, with greater expertise about the effects of different policy choices. One judicial response to this asymmetric information problem has been to shift the focus of review from a substantive evaluation of the policy to an assessment of the quality of the explana-tion the government offers in support of that choice. Proponents of this type of “hard look” review argue that it improves the quality of government decisions; critics charge that it imposes costs on government policymakers without providing useful information to reviewing courts. This paper offers an alternative perspective: Judicially-imposed ex-planation requirements can help reviewing courts overcome their informational disadvan-tage for reasons that are independent of their ability to assess the substantive content of government explanations. If producing impressive explanations is expensive, then the court can reason that the government’s willingness to produce a high-quality explanation signals the government’s belief that the proposed policy has large benefits. Furthermore, if the preferences of the court and government are positively correlated in expectation, then the fact that the government places a high value on the policy means the policy is more likely to be acceptable to the court. Therefore, judicial evaluation of explanation quality ameliorates the court’s informational disadvantage, and may induce a court to up-hold a government decision it would otherwise invalidate. The paper develops this costly signaling perspective on hard look review in the administrative law context, and then considers other applications in constitutional and criminal law.


Administrative Law | Law and Economics

Date of this Version

March 2006