Judicial Career Incentives and Court Performance: An Empirical Study of the German Labour Courts of Appeal

Abstract

This paper examines how the organization of a civil-law judiciary—the German labour court system—shapes court performance. It is argued that civil-law judiciaries can be considered as internal labour markets in which the main incentive derives from career opportunities. Resulting hypotheses are tested on data for nine German Labour Courts of Appeal (Landesarbeitsgerichte) over the period 1980–1998. Two performance measures are computed: the confirmation rate and a productivity measure. The confirmation rate captures how often decisions are upheld in an appeal at the Federal Labour Court. Court productivity is measured by a score derived via data envelopment analysis (DEA) and includes as outputs the number of finished cases and the number of published decisions. Regression analyses show: Courts employing more judges with a Ph.D. are more productive, but write decisions that are less often confirmed by the Federal Labour Court. Courts employing judges with higher ex ante promotion probabilities are less productive and write decisions that are less often confirmed.