What Drives Tort Reform Legislation? Economics and Politics of the State Decisions to Restrict Liability Torts1

This paper studies driving factors behind 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 and premiums, number of lawyers at the state level, and tort cases commenced at the state level and national level, 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 and single party control of the legislature and governorship---are also associated with quicker reform adoption. Beyond this, however, we do not find evidence of the influence of private interest groups---such as doctors, and insurance industry professionals---on tort reform adoption.