Over time it is not just the rights of the 'socially excluded' that have been put up for judicial review and intervention; a whole gamut of issues such as the environment, consumer affairs, property rights, the practices of municipal corporations, educational institutions, politicians and political parties, to name a few areas, have been presented before the courts to prescribe public policy outcomes. This widening of subject matter has caused Indian judicial activism to be celebrated as a device of engineering social change. We propose an examination of judicial activism using the positive tools of economic analysis. The singular value of such an analysis lies in placing judicial activism in relation to the norm of economic efficiency. This enables a discussion in which one does not present the problem as one of contesting ideologies, but in terms of the impact of judicial activism on the allocation of resources. In the first section of the paper we outline the tools for the analysis. We establish a link between the doctrine of separation of powers and the notion of transaction costs and use this to define activism. In the second part we use the definition to perform a heuristic economic analysis of judicial activism. Our conclusions are mixed: while we see some virtue in what we call interpretational judicial activism, other forms of judicial activism that encroach on legislative or executive decision-making on grounds of privilege can result in social costs that outstrip benefits.
