When, why, and how does a firm decide to invest its resources in political capital? What factors inform the firm’s decision to lobby political bodies? How important is the resulting durability of law in making this calculus? Although these questions have been largely unanswered in the legal literature, they are fundamental to a complete understanding of public choice theory. Using Articles 3 and 4 of the Uniform Commercial Code as a framework for examining these questions, this Note identifies four threshold inquiries each firm must answer before engaging in political investment. It then develops those factors that a firm may consider in estimating its return on political investment (ROPI). A puzzle emerges, however, when one considers the default nature of the U.C.C. Economic theory and the right to contract suggest that the ex post distribution of such terms will achieve general equilibrium regardless of their ex ante value. Without ex post legal durability in the form of mandatory rules, it is difficult to imagine just how commercial banks are capable of harnessing long-term permanent returns from their political investment in the U.C.C. While the current legal literature simply assumes that banking interests can harness a non-negative return on political investment, this Note relies upon behavioral economics and the notion of bounded rationality to conclude that private banking interests are likely to capture a positive ROPI, even where default rules with seemingly little durability govern their contracts. In arriving at this conclusion, it first identifies the political investment threshold inquiries a firm must answer prior to contributing capital to a political investment, as well as the substantive returns that firms are likely to realize as a result.
San Antonio Independent School District v. Rodriguez and Its Aftermath
In Brown v. Board of Education, the Supreme Court observed that “education is perhaps the most important function of state and local governments” and held that it was a public service that “must be made available to all on equal terms.” While Brown removed one obvious barrier to equal educational opportunities, it left in place another: the obstacle faced by poor school districts that wish to provide an education to their students “on equal terms” relative to the education offered by wealthier school districts within a State.
Nineteen years after Brown, the Court decided another equal-protection case, San Antonio Independent School District v. Rodriguez, which gave the Court an opportunity to remove, or at least ameliorate, wealth-based barriers to equal educational opportunities as well. But the Court rejected the plaintiffs’ claims. This Essay explains what happened in Rodriguez, describes what happened in the States in the thirty-five years after Rodriguez and raises some questions prompted by the experience.
The Right to Judicial Review
Judicial review is typically justified on consequentalist grounds, namely that it is conducive to the efficacious protection of rights. This paper disputes this popular explanation for judicial review and argues that judicial review is based on a “right to voice a grievance” or a “right to a hearing” – a right designed to provide an opportunity for the victim of infringement to challenge it. The state must justify, and in appropriate cases, reconsider, any infringement in light of the particular claims and circumstances of the victims of the infringement. This right-based justification implies that judicial review is justified even if it is found that it is ultimately detrimental to the efficacious protection of rights. Last, it is argued that the right to a hearing is a participatory right and consequently that judicial review does not conflict with the right to equal democratic participation.