99 Iowa L. Rev. 2273 (2014)

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Abstract

Monopsony is the buyer-side counterpart to monopoly, a situation in which a single purchaser or payer dominates a market for goods or services. When a government entity is the dominant or sole payer for a service, a governmental monopsony results; one example is the provision of indigent defense in criminal cases. Monopsony theory would predict all the problems with court-appointed (government-funded) lawyers that we observe today, such as below-market compensation rates, a shortage of defense lawyers, excessive caseloads, poor quality of representation, escalating rates of hasty plea bargains, and so on. More disheartening is that monopsony theory would predict that these effects would be inevitable, regardless of the budget the government allocates for indigent defense. Despite this pessimistic prediction, monopsony theory offers a useful way to analyze various proposals to remedy these problems, and it suggests that certain systems or institutions for providing indigent defense can better mitigate the monopsony effects, at least compared to the alternatives.