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Over time, the Wikipedia Arbitration Committee has taken on additional roles. It began as an arbiter with a solely judicial role but over time became also a policy-making body with a legislative role. There is a perhaps unavoidable tendency for any judiciary whose cases create precedents to play some role in lawmaking, so this was perhaps to be expected. One of the other factors that may have contributed to the Arbcom taking on legislative duties is that, in the wake of Jimbo Wales' departure from the role of god-king without creating any legislative body to take his place, Wikipedia lacked any mechanism for creating policy without a supermajority "consensus" of users, so there was a power vacuum that gave the Arbcom an opportunity to assume additional powers.
The downside to this is that the Arbcom was not designed as a legislative body. Its proceedings often take place in secret, rather than being open for the community to review and discuss. This makes it difficult for users to make informed decisions in Arbcom elections. It does not operate in a parliamentary manner, in which the majority parties form a ruling coalition that can be blamed for bad decisions. Also, 12 members is an awkward size for a legislature. It's arguably too small to represent a very diverse range of opinions — at most only 12 opinions are represented on any issue.