WP 2015-07 What Drives Tort Reform Legislation? An Analysis of State Decisions to Restrict Liability Torts
ABSTRACT: This paper studies the timing of state-level tort reform enactments between 1971 and 2005. Using discrete time hazard models, we find the level of litigation activity—as measured by incurred liability insurance losses, the number of lawyers, and tort cases commenced—to be the most important and robust determinant of tort reform adoption. Political-institutional factors and regional effects—such as Republican control of the state government, single party control of the legislature and governorship, and conservative democratic political ideology—are also associated with quicker reform adoption. Evidence on the influence of private interest groups is weaker, though insurance industry employment appears to be associated with quicker reform adoption in some specifications.