An economic theory about judicial control of Administrative discretion

Abstract

This paper presents, from a law and economics perspective, a general theory on judicial review of administrative discretion. This theory allows answering at least three questions: (i) What is the rationale of administrative discretion? (ii) Under which circumstances should administrative authorities enjoy it? and (iii) Which is the optimal scope of that discretion? With that purpose, the paper analyzes the social costs and benefits of administrative discretion, which determine whether and to what extent it is justified in each case.