Timely Justice as a Determinant of Economic Growth

Giovanni Ramello (Università del Piemonte Orientale)
Simeon Djankov (London School of Economics)
Alessandro Melcarne (Université Paris Nanterre)
Rok Spruk (University of Ljubljana)

Abstract

We investigate how timeliness in enforcing legal contracts affects economic
growth across countries. We focus on judicial timeliness as a proxy for
courts’ performance in a large panel of 169 countries over the 2004-2019
period. We show that, by raising uncertainty and promoting opportunistic
behaviors in business transactions, slower courts hinder economic development.
The relationship is robust to diverse model specifications and appears
stronger for business environments more heavily relying on judiciaries such
as economies undergoing rapid growth, countries characterized by low human
capital levels and civil law jurisdictions.

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