Institutional Economic Analysis Of Adjudicative Power

The adjudicative power is an important component of the state power.Its operation not only reflects a state's capacity for governance,but also directly affects a state's effective governance.In view of the fact that adjudicative power is a kind of scarce and important social resource,it is very important,for the realization of good law and good governance in a country,to realize the effective use of adjudicative power to the maximum in the practice of state governance.In order to maximize the effective use of adjudicative power,first of all,we shall have a deep understanding of the real attributes of adjudicative power in judicial practice;secondly,we shall fully comprehend that different constraints inevitably lead to different choices of institution in terms of the adjudicative power;thirdly,strong incentives and constraints shall be imposed on the users of adjudicative power.Any power is a double-edged sword.Although the adjudicative power,in practice,has facets of independence,passivity,neutrality,openness,professionality,finality and fairness,the opposite side of each facet also exists.Due to the existence of contrary facts,those theories,explaining the nature of adjudicative power in terms of independence,passivity,neutrality,openness,profession,finality and fairness,have limited explanatory power.No matter in logic or in fact,the pursuit of independent,passive,neutral,open,professional,final and fair adjudicative power does not mean that adjudicative power is indeed and actually independent,passive,neutral,open,professional,final and fair in practice.Taking "what it ought to be" as "what it is" is a kind of misuse of language,which is not conducive to our perception of the real world.The more profound and lasting attributes of adjudicative power are public forcibility,ability to delineate property rights,propensity for wealth effect,proxy and discretion.Specifically speaking,public forcibility means that the adjudicative power is a part of state power,and its operation cannot be separated from the support of public finance and public force;ability to delineate property rights refers to that the main function of the adjudicative power is to define the property rights of disputed resources/wealth,so as to determine their ownership or distribution;propensity for wealth effect means that the adjudicative power,as a kind of usable resource,is capable of engendering income and seeking rent;proxy refers to the fact that users of adjudicative power are in the position of agent,and the performance of adjudicative power depends on the incentives and constraints imposed on and faced by them;discretion means that imperfection of legal rules or case information inevitably results in the fact that the operation of adjudicative power is inevitably affected by subjective factors of power users.The analysis carried out in terms of these five aspects can,with stronger explanatory power,explain all kinds of adjudicative power at all times and throughout the world.Only when we have a deep understanding of these attributes of adjudicative power can we better realize the independence,passivity,neutrality,openness,profession,finality and fairness of adjudicative power through corresponding institutional arrangements.The effective use of adjudicative power is inseparable from corresponding institutional arrangements.In the view of institutional economics,it is the transaction cost that determines the choice of institution.Therefore,in terms of realization of the same goal,the institution with lowest transaction cost is the best.Transaction costs involved in the judicial system mainly include information costs,adjudication costs,enforcement costs,regulatory costs,measurement costs and reform costs.Accordingly,the choice of institution in terms of adjudicative power is generally in the direction of reducing the above transaction costs.At the macro level,what kind of institutional arrangement is chosen for the operation of adjudicative power depends on the structure of state power.There are both decentralized and centralized structures of state power in human society,which are adapted to different constraints.The establishment of the decentralized state power stems from the fact that different political groups cannot form a centralized political force because of the stalemate among them.In order to avoid the country's break-up and war,all political forces have to compromise with each other by dividing the state power(power separation).If an overwhelming political force has been formed in a country,a centralized structure of state power is the inevitable choice of in that country.But no matter centralization or decentralization,there are transaction costs in the operation of state power.To a great extent,the performance of centralized government depends on the wisdom of those in power,while decentralized governments are often difficult to achieve their goals because of endless party competition and dispute.There is no perfect form of government in the world.The most suitable institutional arrangement for a country is the one that can achieve good law and good governance with lowest transaction costs.Practice has proved that the democratic centralism regime led by the Communist Party of China is the institutional arrangement which,with the minimum transaction costs,is most suitable for the actual situation of China.While realizing effective state governance,it,to the greatest extent,avoids repeated party disputes,civil strife and even war chaos taking place in the history of China due to power division.Therefore,focusing on the performance of institution,China's adjudicative power is bound to be led by the Communist Party of China,and it is impossible to implement such“separation of power" as that in the West.The centralized structure of state power does not refuse power division and supervision.Since power is an important social resource,the use of it is the same as that of natural resources.First of all,the users must be clearly specified;otherwise,unclear ownership of power will cause intense competition and consume social wealth.Therefore,making clear the users of adjudicative power and the list of their duties,is the fundamental premise for improving the performance of the adjudicative power.A judge's independent exercise of adjudicative power means that the right to use adjudicative power in a particular dispute shall be exclusively defined to the judge.This is essentially the same as the delineation of property rights in the economic field,which is in order to reduce transaction costs and rent dissipation caused by unclear ownership.The operation of adjudicative power must rely on personal human capital/resources(i.e.,knowledge,skills and health,etc.)of judges.Accordingly,to stimulate and restrict the adjudicative power is essentially to provide appropriate incentives and constraints for judges,so as to maximize the unity of judges' individual interests and good performance of adjudicative power.Judges' power,responsibility and income are the three most important factors affecting encouragement and restriction for the adjudicative power.First,the clear delineation of judges' power is the basic premise to secure judges' independent exercise of adjudicative power;second,to investigate the responsibility of the judge who does wrong exercise of adjudicative power,is the fundamental guarantee to eliminate judges'abuse of power to the greatest extent;third,to ensure judges' income(both monetary and non-monetary)matching their contributions,is the important foundation to stimulate judges' working enthusiasm and avoid their reluctant use or abuse of adjudicative power.Of course,strengthening security of judges' career does not mean that the positions for judges are "iron rice bowls".Only by distinguishing merits and demerits,measuring personal contribution accurately and strictly carrying out rewards and punishments,can make judges face strong incentives and constraints,so as to realize the social value of adjudicative power to the maximum.All in all,in order to maximize the effective use of adjudicative power in the practice of China's governance,firstly,we need to know and understand its attributes of public forcibility,ability to delineate property rights,propensity for wealth effect,proxy and discretion on a deeper level;secondly,we shall adhere to the ruling party's absolute leadership over the adjudicative power in China,reduce transaction costs in the operation of the judicial system,and what's more,improve the division of power and power supervision while taking a clear stand against“separation of power" in the West;thirdly,we shall systematically unify judges' power,responsibility and income,clearly define judges' powers and responsibilities,and ensure that judges can obtain income matching their contributions.