This Article provides a novel explanation of the function of standing doctrine in public law. Standing restrictions bar suits challenging governmental conduct that harms many people in an similar fashion, or that causes only an inchoate harm to the plaintiff. The voluminous scholarship on standing has been nearly uniformly critical of doctrine. Leading academics and judges have denounced it as useless and incoherent, and calls for its abolition abound.
The Article uses economic analysis to show that standing prevents potentially inefficient dispositions of constitutional entitlements that result from problems of high transaction costs and strategic behavior. Standing plays this role when a single governmental action infringes on the rights of many people with conflicting preferences about how and whether to use their rights. Some may prefer to exercise their right affirmatively; others may prefer to waive them. In this situation, when one person seeks injunctive relief, his exercise of his rights effectively determines the exercise of the individual rights of everyone in the affected class. Thus every individual rights-holder, in the absence of standing restrictions, would have veto power over a government action that affects the rights of many, making strategic holdout likely and efficient bargaining around an injunction nearly impossible. Standing allows courts to bypass the problems of high transaction costs and strategic behavior by attempting to replicate the outcome that would be reached in a low-transaction cost environment – the outcome in the sense of whether the government action proceeds or not.
Thus contrary to conventional wisdom, standing has significant, autonomous, and public-regarding functions. The analysis presented here also helps explain many of the mysteries of standing: Why should inchoate injuries be less justiciable than tangible ones? Isn’t it paradoxical that justiciability exists when a few people are harmed, but not when a great many are harmed?
The Article also shows that while eliminating the doctrine would result in significant social costs, standing is itself not an costless solution. Thus the paper considers other potential solutions, such as using liability rules, the typical prescription for problems arising from high transaction costs. These solutions are found to also have serious problems.