Ideas Have Consequences: The Impact of Law and Economics on American Justice

This paper quantifies the effect of the Manne Economics Institute for Federal Judges — an intensive two-week economics training program run by the Law and Economics Center from 1976 to 1998 — on the decision-making of U.S. federal judges. The research question is whether exposure to a coherent set of economic ideas can directly shift the policy decisions of sitting policymakers, as distinct from effects operating through partisan affiliation or formal legal rules.

The program trained nearly half of all federal judges over its two decades of operation. By 1990, forty percent of federal judges had attended; by the late 1990s, roughly half of circuit court cases had a Manne-trained judge on the panel. Instructors included Milton Friedman, Armen Alchian, Harold Demsetz, Martin Feldstein, Paul Samuelson, and Orley Ashenfelter, covering supply-and-demand theory, the Coase Theorem, externalities, property rights, and criminal deterrence following Becker (1968). The program was funded by pro-business foundations and had a recognized conservative-leaning orientation, though it invited both Republican- and Democrat-appointed judges and was popular across party lines.

The identification strategy is a differences-in-differences design exploiting staggered attendance timing. Because the program was oversubscribed and admitted judges on a first-come-first-served basis — with applicants bumped to later cohorts when capacity was reached — the timing of attendance within the ever-attending population has a quasi-random component. The preferred control group consists exclusively of other ever-attending judges who had not yet attended, rather than never-attenders, because never-attenders differ systematically on observables and show a pre-existing positive trend in economics language use, likely from ambient diffusion through clerks, law schools, and organizations such as the Federalist Society. Judge fixed effects and circuit-by-year (or courthouse-by-year) fixed effects absorb time-invariant judge characteristics and court-level time trends. Elastic-net-selected covariates predicting attendance timing, fully interacted with year fixed effects, are added as robustness controls. Standard errors are clustered by judge.

The data cover approximately 200,000 published circuit court opinions (1970–2005) from Bloomberg Law, a 5% random sample of circuit cases hand-coded for ideological direction from the Songer-Auburn database, machine-coded regulatory agency outcomes, a newly collected antitrust case dataset, and approximately 1.03 million district court criminal sentencing records (1992–2003) from TRAC.

The main findings are as follows. First, after attending the Manne program, judges increase their use of economics language in written opinions by approximately one-third of a standard deviation, measured via word-embedding similarity to an economics lexicon; this effect is statistically significant in the short-run event-study window but does not persist over the full career. Second, Manne attendance raises conservative voting in economics-related cases (labor and regulation) by approximately one-quarter of a standard deviation — corresponding to judges deciding in the conservative direction about 20 percent more often relative to the mean — with no significant effect on non-economics cases; the interaction effect is robust across specifications including never-attenders. Third, post-Manne judges vote more frequently against federal labor and environmental regulatory agencies, a result that is statistically significant and economically meaningful with no detectable pre-trends. Fourth, post-Manne judges impose longer and more frequent prison sentences, with no increase in sentencing harshness for drug crimes — consistent with Manne instructors having explicitly advocated drug legalization — and with the harshness gap between Manne and non-Manne judges widening after the 2005 Booker decision expanded judicial sentencing discretion. Fifth, there is some evidence of increased voting against antitrust enforcement, though this result is more sensitive to specification. Persuasion rates computed following DellaVigna and Gentzkow (2010) are slightly larger than those estimated for partisan media interventions such as Fox News and are closest to the effect of a 10-week Washington Post subscription on Democratic governor vote share. Neither the legalist model (judges follow statutes mechanically) nor the attitudinal model (judges follow party affiliation) can explain these within-judge, within-party shifts.

Q: What is the central identification challenge and how do the authors address it? A: The key threat is that judges who chose to attend the Manne program — or who attended at a particular time — may differ systematically from non-attenders in ways correlated with their decision trajectories. The authors address this in two steps. First, they restrict the control group to other ever-attending judges who had not yet attended, exploiting the first-come-first-served oversubscription rule that created quasi-random variation in timing among applicants. Second, they use judge fixed effects plus circuit-by-year fixed effects, and add elastic-net-selected biographical covariates (e.g., birth cohort indicators) interacted with year fixed effects as a robustness check. Republican affiliation — the most salient ideological predictor of attendance — is not a statistically significant predictor of attendance timing, supporting the exclusion restriction.

Q: Why are never-attenders excluded from the preferred control group? A: Never-attenders differ from attenders on observables including political party and show a positively trending use of economics language in their opinions even before any treatment, suggesting ambient diffusion of economics ideas through law clerks, law school curricula, and organizations such as the Federalist Society. Including never-attenders in the control group produces a near-zero coefficient on the language outcome, which the authors interpret as reflecting spillovers rather than a true null effect; the coefficient on conservative voting in the interaction specification, however, remains positive and significant even when never-attenders are included.

Q: What is the magnitude of the effect on economics language use? A: The within-judge effect of Manne attendance on the word-embedding similarity between judicial opinions and an economics lexicon is approximately one-third of a standard deviation, statistically significant in the short-run event-study window (covering six years before and after attendance). The effect shrinks and becomes non-significant when the full career of Manne judges is examined (rather than just the event-study window), consistent with broad diffusion of economics language across the judiciary over time rather than a persistent individual-level treatment effect.

Q: How large is the effect on conservative voting, and is it concentrated in particular case types? A: Post-Manne attendance raises conservative voting in economics-related cases (labor and regulation) by approximately one-quarter of a standard deviation, corresponding to judges deciding in the conservative direction about 20 percent more often relative to the mean liberal-conservative decision rate. There is no statistically significant effect on non-economics cases. The interaction coefficient — the differential effect on economics versus non-economics cases — is positive and significant across all specifications including the full sample with never-attenders, making this the most robust directional result in the paper.

Q: What is the effect on regulatory agency voting? A: Post-Manne judges vote more frequently against federal labor agencies (National Labor Relations Board, OSHA, Department of Labor, Federal Labor Relations Authority, Office of Worker’s Compensation Programs) and the Environmental Protection Agency. The event study shows a positive and significant increase that persists across the event-study window with no detectable pre-trends. This result is robust to both the baseline specification and the elastic-net-controls specification.

Q: What is the effect on criminal sentencing, and what heterogeneity is found? A: Post-Manne judges impose both more frequent prison sentences and longer sentences, consistent with Becker’s deterrence framework taught in the program’s criminal law curriculum. The sentencing effects are absent for drug crimes, consistent with Manne instructors — including Milton Friedman — having explicitly advocated against the drug war and for drug legalization. The gap in sentencing harshness between Manne and non-Manne judges widens after the 2005 United States v. Booker decision, which made the Federal Sentencing Guidelines advisory rather than mandatory; this is consistent with the program having shaped latent judicial preferences that are expressed more fully when formal constraints are relaxed.

Q: How do the persuasion rates compare to benchmark media studies? A: The persuasion rates computed following DellaVigna and Gentzkow (2010) are slightly larger than those estimated for partisan media interventions such as Fox News (DellaVigna and Kaplan, 2007) and are closest to the persuasion rates implied by a 10-week subscription to the Washington Post on Democratic governor vote share (Gerber et al. 2009). The comparison contextualizes the Manne program as a moderately high-intensity ideational intervention relative to documented cases of political persuasion.

Q: What do the results imply for theories of judicial behavior? A: The findings are inconsistent with both the legalist/formalist model — under which judges apply statutes and precedent without regard to extra-legal factors, predicting zero effect — and the attitudinal model — under which judges simply follow partisan preferences, also predicting zero effect since the program attended judges of both parties. The within-judge, within-party shifts point to a third channel: judicial worldviews and economic ideas, independent of formal law and partisan affiliation, shape high-stakes precedent-setting decisions.

Q: Can the authors distinguish between a pedagogical (informational) and an ideological persuasion mechanism? A: They cannot definitively distinguish between the two. Both mechanisms predict increased economics language, more conservative rulings in economics cases, deregulatory voting, and harsher non-drug sentences. The drug-crime heterogeneity is somewhat more consistent with a nuanced pedagogical channel, since Manne instructors explicitly discussed drug legalization, but this pattern is also consistent with complex ideological effects. Evidence on decision quality (citation rates, judicial promotion) is mixed and not robust, providing no clean test of the informational mechanism.

Q: What does the antitrust evidence show? A: Post-Manne judges tend to vote against antitrust claimants (i.e., in favor of less antitrust enforcement), but this result is more sensitive to specification than the regulatory agency and sentencing results and is not always statistically significant across specifications. The authors treat it as suggestive rather than conclusive.

Q: How does this paper relate to the literature on economics education and normative beliefs? A: Prior work finds that economics students are less redistributive (Selten and Ockenfels 1998), view surge prices more favorably (Frey and Meier 2005), favor profit maximization (Rubinstein 2006), and that economics professors are less ideologically liberal than other social scientists (Jelveh et al. 2018). The present paper extends this literature by studying established professionals (judges) making high-stakes real-world decisions, and by documenting a direct policy impact rather than a change in survey responses or experimental choices.

Q: What is the scope of the dataset and the program coverage? A: The circuit court dataset covers approximately 200,000 published opinions from 1970 through 2005. The district court sentencing dataset covers approximately 1.03 million cases from 1992 through 2003 (event study sample). The Manne program ran from 1976 to 1998, with roughly twenty judges per cohort; by 1990 forty percent of federal judges had attended, and by the late 1990s roughly half of circuit court cases had a Manne-trained panelist. Biographical information comes from the Federal Judicial Center; program attendance lists come from Butler (1999) supplemented by FOIA-obtained annual reports.

Manne Economics Institute for Federal Judges: An intensive two-week economics training program for sitting U.S. federal judges, run by the Law and Economics Center from 1976 to 1998, covering supply-and-demand theory, the Coase Theorem, externalities, property rights, deterrence theory, and related topics; funded by pro-business foundations; admitted judges on a first-come-first-served basis and trained nearly half of all federal judges over its operation.

Word-embedding economics language measure: A continuous measure of how closely a judicial opinion’s vocabulary aligns with a lexicon of law-and-economics phrases, constructed using word2vec embeddings (Mikolov et al. 2013) trained on the corpus of judicial opinions; measures the semantic proximity of opinion text to the Ellickson (2000) economics lexicon in embedding space, capturing implicit and contextual use of economics reasoning rather than raw phrase counts.

Deterrence theory (Becker model): The framework, drawn from Becker (1968), taught in the Manne program’s criminal law curriculum, which holds that optimal crime deterrence requires setting the expected penalty — the economic cost of punishment times the probability of detection — high enough to outweigh the expected benefits of crime; treated in the paper as the theoretical basis for predicting harsher sentencing among post-Manne judges, and contrasted with retribution- or rehabilitation-based sentencing rationales that dominated before its diffusion.

Conservative judicial decision (economics cases): In the paper’s usage, a ruling against the liberal/pro-plaintiff position in a case involving labor or regulation, as hand-coded by the Songer-Auburn database; includes ruling against a labor agency, rejecting a regulatory claimant, or voting against antitrust enforcement; the paper finds Manne attendance shifts judges in this direction in economics cases but not in non-economics cases.

First-come-first-served oversubscription: The admission rule of the Manne program during its oversubscribed heyday (from the second cohort in 1977 through the late 1980s), under which applicants who did not secure a spot were bumped to the next year’s cohort; the authors argue this rule generates quasi-random variation in the timing of attendance among ever-attending judges, conditional on applying, providing the identifying variation for the differences-in-differences design.

Persuasion rate: A summary statistic, following DellaVigna and Gentzkow (2010), measuring the fraction of the “persuadable” population that is convinced by a treatment; used in the paper to benchmark the Manne program’s effect size against documented media persuasion interventions such as Fox News and Washington Post subscriptions.