The Two Main Theories of Arbitration may be Described as Judicial and Political GMAT Reading Comprehension

Reading passage question

The two main theories of arbitration may be described as judicial and political. One might even go so far as to characterize them by saying that the first is based on how arbitration is supposed to work, while the second is based on how it does in fact work.

The judicial theory implies that a “just” solution of the dispute does in fact exist, and that it is the duty of the arbitrator to decide on the principles and the facts involved. The arbitrator sits as a private judge, called upon to determine the legal rights and the economic interests of the parties involved as these rights and interests are demonstrated by the information provided by the parties themselves. The political theory, on the other hand, regards arbitration as an extension of both collective bargaining and, of course, collective coercion. The arbitrator functions as a sensitive instrument of sorts, accurately recording the relative strengths of the parties and making sure that the lion gets his share.

To some extent, however, these opposing theories represent a confusion between arbitration and conciliation, the act of appeasing both parties to a dispute without necessarily rendering a just or pragmatic decision. The notion of compromise that dominates conciliation may also guide arbitration, although, in the process of arbitration, the result necessarily requires the decision of an outsider rather than an accommodation between the parties themselves. Nevertheless, since to some the idea of arbitration necessarily involves absolute “rights,” compromise is likely to be regarded as the solution of the timid or the unprincipled. Arbitration grounded in political theory, while more likely to permit conciliation, is therefore less preferable to both parties in a dispute, despite the obvious practicality of compromise.

“The two main theories of arbitration may be described as judicial and political.”- is a comprehension passage with answers. Candidates need a strong knowledge of English GMAT reading comprehension. This GMAT Reading Comprehension consists of 7 comprehension questions. The GMAT Reading Comprehension questions are designed for the purpose of testing candidates’ abilities in understanding, analyzing, and applying information or concepts. Candidates can actively prepare with the help of GMAT Reading Comprehension Practice Questions.

Solution and Explanation

Question 1
The primary purpose of the passage is to

1. provide examples of the social failures that make arbitration necessary
2. describe the origin of two theories of arbitration
3. compare two conflicting theories of dispute arbitration
4. discuss the relative merits of arbitration and conciliation
5. outline the successive stages of collective bargaining

Question 2
It can be inferred from the passage that the political theory of arbitration

1. will eventually be replaced by a more efficient system of judicial compromise
2. is not solely concerned with principles of justice
3. suffers from most disputants unwillingness to accept compromise
4. may replace conciliation as the most practical means of resolving disputes
5. is unlikely to be chosen by disputants unless they are coerced

Question 3
Which of the following, if true, would most effectively weaken the author’s assessment of the drawbacks of the political theory of arbitration?

1. Litigation is becoming a more popular alternative to arbitration.
2. A system of checks and balances was put in place to reduce the likelihood of finding biased arbitrators.
3. Contending parties in most disputes establish compromise as one of their most important goals.
4. The process of arbitration uncovered new strategies for avoiding conflicts between contending parties.
5. Resolution of the problem of the opposing rights of the parties involved in labor settlements can be achieved.

Question 4
It can be inferred from the passage that all of the following are elements of the political theory of arbitration EXCEPT

1. an evaluation of the balance of power between disputing parties
2. a willingness on the part of both parties to accept compromise
3. a relative disregard of the importance of moral right in the dispute
4. an understanding that any compromise must appear to be just
5. an extension of collective bargaining

Question 5
According to the judicial theory of arbitration, an arbitrator would base his or her decision on

1. information supplied by the parties involved in arbitration
2. the notion of compromise that dominates conciliation
3. decisions rendered by judges in similar cases
4. the relative strengths of the parties involved
5. whatever appears to both parties to be a fair settlement of the dispute

Question 6
It can be inferred from the passage that efforts at conciliation are

1. unlikely to be highly regarded by proponents of the judicial theory of arbitration
2. absent from most well-regarded theories of arbitration
3. most effective when neither party is responsible for a final decision
4. inextricably linked with the concept of "rights"
5. necessary to any dispute resolution under current theories of arbitration

Question 7
According to the passage, the political theory of arbitration

1. leaves no room for dissension
2. implies that there is a just solution to all disputes
3. directly contradicts the notion of compromise
4. is grounded in political theory
5. is based on how arbitration actually works

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