IDEAS home Printed from https://ideas.repec.org/p/ces/ceswps/_4894.html
   My bibliography  Save this paper

Inside Post-Socialist Courts: The Determinants of Adjudicatory Outcomes in Slovenian Commercial Disputes

Author

Listed:
  • Valentina Dimitrova-Grajzl
  • Peter Grajzl
  • Katarina Zajc

Abstract

Despite the judiciary’s central role in the capitalist market system, micro-level empirical analyses of courts in post-socialist countries are remarkably rare. This paper draws on a unique hand-collected dataset of commercial claims filed at Slovenian courts to examine the determinants of two salient adjudicatory outcomes: whether a case was resolved via trial or settlement and if the case was tried, whether the plaintiff was awarded the initial claim. Consistent with the divergent expectations theory of litigation, we find that trial-based resolution is more likely when the case is complex and less likely when parties use mediation. Addressing sample selection and endogeneity concerns, we show that defendant’s legal representation, plaintiff’s profitability, and, importantly, court identity are robust predictors of plaintiff victory at trial. Thus, more than two decades after the start of transition in Slovenia, the judicial system is still a source of legal inconsistency and uncertainty.

Suggested Citation

  • Valentina Dimitrova-Grajzl & Peter Grajzl & Katarina Zajc, 2014. "Inside Post-Socialist Courts: The Determinants of Adjudicatory Outcomes in Slovenian Commercial Disputes," CESifo Working Paper Series 4894, CESifo Group Munich.
  • Handle: RePEc:ces:ceswps:_4894
    as

    Download full text from publisher

    File URL: http://www.cesifo-group.de/DocDL/cesifo1_wp4894.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Jakob Svensson, 2003. "Who Must Pay Bribes and How Much? Evidence from a Cross Section of Firms," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 207-230.
    2. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Zajc, Katarina, 2014. "Understanding modes of civil case disposition: Evidence from Slovenian courts," Journal of Comparative Economics, Elsevier, vol. 42(4), pages 924-939.
    3. Doornik, Katherine, 2014. "A rationale for mediation and its optimal use," International Review of Law and Economics, Elsevier, vol. 38(C), pages 1-10.
    4. Kathryn E. Spier, 1992. "The Dynamics of Pretrial Negotiation," Review of Economic Studies, Oxford University Press, vol. 59(1), pages 93-108.
    5. Waldfogel, Joel, 1998. "Reconciling Asymmetric Information and Divergent Expectations Theories of Litigation," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 451-476, October.
    6. Lucian Arye Bebchuk, 1984. "Litigation and Settlement under Imperfect Information," RAND Journal of Economics, The RAND Corporation, vol. 15(3), pages 404-415, Autumn.
    7. James J. Heckman, 1976. "The Common Structure of Statistical Models of Truncation, Sample Selection and Limited Dependent Variables and a Simple Estimator for Such Models," NBER Chapters,in: Annals of Economic and Social Measurement, Volume 5, number 4, pages 475-492 National Bureau of Economic Research, Inc.
    8. Lambert-Mogiliansky, Ariane & Sonin, Konstantin & Zhuravskaya, Ekaterina, 2007. "Are Russian commercial courts biased? Evidence from a bankruptcy law transplant," Journal of Comparative Economics, Elsevier, vol. 35(2), pages 254-277, June.
    9. Gray, C.W., 1993. "Evolving Legal Frameworks for Private Sector Development in Central and Eastern Europe," World Bank - Discussion Papers 209, World Bank.
    10. Katharina Pistor, 2000. "Patterns of legal change: shareholder and creditor rights in transition economies," Working Papers 49, European Bank for Reconstruction and Development, Office of the Chief Economist.
    11. Djankov, Simeon & Glaeser, Edward & La Porta, Rafael & Lopez-de-Silanes, Florencio & Shleifer, Andrei, 2003. "The new comparative economics," Journal of Comparative Economics, Elsevier, vol. 31(4), pages 595-619, December.
    12. Simon Johnson & John McMillan, 2002. "Courts and Relational Contracts," Journal of Law, Economics, and Organization, Oxford University Press, vol. 18(1), pages 221-277, April.
    13. Katharina Pistor & Martin Raiser & Stanislaw Gelfer, 2000. "Law and Finance in Transition Economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 8(2), pages 325-368, July.
    14. John Rand & Finn Tarp, 2012. "Firm-Level Corruption in Vietnam," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 571-595.
    15. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Sustersic, Janez & Zajc, Katarina, 2012. "Court output, judicial staffing, and the demand for court services: Evidence from Slovenian courts of first instance," International Review of Law and Economics, Elsevier, vol. 32(1), pages 19-29.
    16. Theodore Eisenberg & Henry S. Farber, 1996. "The Litigious Plaintiff Hypothesis: Case Selection and Resolution," Working Papers 743, Princeton University, Department of Economics, Industrial Relations Section..
    17. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Publishing House "SINERGIA PRESS", vol. 31(3), pages 129-137.
    18. Kaplow, Louis & Shavell, Steven, 2002. "Economic analysis of law," Handbook of Public Economics,in: A. J. Auerbach & M. Feldstein (ed.), Handbook of Public Economics, edition 1, volume 3, chapter 25, pages 1661-1784 Elsevier.
    19. repec:taf:ceasxx:v:52:y:2000:i:4:p:627-656 is not listed on IDEAS
    20. Kathryn Hendley & Peter Murrell & Randi Ryterman, 2000. "Law, Relationships and Private Enforcement: Transactional Strategies of Russian Enterprises," Europe-Asia Studies, Taylor & Francis Journals, vol. 52(4), pages 627-656.
    21. Pyle, William, 2006. "Resolutions, recoveries and relationships: The evolution of payment disputes in Central and Eastern Europe," Journal of Comparative Economics, Elsevier, vol. 34(2), pages 317-337, June.
    22. Matija Rojec & Janez Sustersic & Bostjan Vasle & Marijana Bednas & Slavica Jurancic, 2004. "The rise and decline of gradualism in Slovenia," Post-Communist Economies, Taylor & Francis Journals, vol. 16(4), pages 459-482.
    23. Goran Skosples, 2012. "Law and credit constraints in transition economies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 20(3), pages 425-455, July.
    24. Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
    25. Joshua Angrist & Victor Lavy & Analia Schlosser, 2010. "Multiple Experiments for the Causal Link between the Quantity and Quality of Children," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 773-824, October.
    26. Cooter, Robert D & Rubinfeld, Daniel L, 1989. "Economic Analysis of Legal Disputes and Their Resolution," Journal of Economic Literature, American Economic Association, vol. 27(3), pages 1067-1097, September.
    27. Barry Nalebuff, 1987. "Credible Pretrial Negotiation," RAND Journal of Economics, The RAND Corporation, vol. 18(2), pages 198-210, Summer.
    28. Farmer, Amy & Tiefenthaler, Jill, 2001. "Conflict in divorce disputes: the determinants of pretrial settlement," International Review of Law and Economics, Elsevier, vol. 21(2), pages 157-180, June.
    29. Olivier Jean Blanchard & Kenneth A. Froot & Jeffrey D. Sachs, 1994. "Introduction to "The Transition in Eastern Europe, Volume 1"," NBER Chapters,in: The Transition in Eastern Europe, Volume 1, pages 1-18 National Bureau of Economic Research, Inc.
    30. Caudill, Steven B, 1988. "An Advantage of the Linear Probability Model over Probit or Logit," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 50(4), pages 425-427, November.
    31. Utpal Bhattacharya & Neal Galpin & Bruce Haslem, 2007. "The Home Court Advantage in International Corporate Litigation," Journal of Law and Economics, University of Chicago Press, vol. 50, pages 625-660.
    32. William M. Landes, 1974. "An Economic Analysis of the Courts," NBER Chapters,in: Essays in the Economics of Crime and Punishment, pages 164-214 National Bureau of Economic Research, Inc.
    33. Kessler, Daniel P. & Rubinfeld, Daniel L., 2007. "Empirical Study of the Civil Justice System," Handbook of Law and Economics, Elsevier.
    34. Clarke, George R. G. & Xu, Lixin Colin, 2004. "Privatization, competition, and corruption: how characteristics of bribe takers and payers affect bribes to utilities," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 2067-2097, August.
    35. Mogstad, M. & Wiswall, M., 2012. "Instrumental variables estimation with partially missing instruments," Economics Letters, Elsevier, vol. 114(2), pages 186-189.
    36. Perloff, Jeffrey M & Rubinfeld, Daniel L & Ruud, Paul, 1996. "Antitrust Settlements and Trial Outcomes," The Review of Economics and Statistics, MIT Press, vol. 78(3), pages 401-409, August.
    37. Olivier Blanchard & Kenneth Froot & Jeffrey Sachs, 1994. "The Transition in Eastern Europe, Volume 2: Restructuring," NBER Books, National Bureau of Economic Research, Inc, number blan94-3.
    38. Cameron,A. Colin & Trivedi,Pravin K., 2005. "Microeconometrics," Cambridge Books, Cambridge University Press, number 9780521848053, August.
    39. George L. Priest & Benjamin Klein, 1984. "The Selection of Disputes for Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 13(1), pages 1-56, January.
    40. James H. Anderson & Daivd S. Bernstein & Cheryl W. Gray, 2005. "Judicial Systems in Transition Economies : Assessing the Past, Looking to the Future," World Bank Publications, The World Bank, number 7351, November.
    41. Anderson, G. J., 1987. "Prediction tests in limited dependent variable models," Journal of Econometrics, Elsevier, vol. 34(1-2), pages 253-261.
    42. Johnston, Jason Scott & Waldfogel, Joel, 2002. "Does Repeat Play Elicit Cooperation? Evidence from Federal Civil Litigation," The Journal of Legal Studies, University of Chicago Press, vol. 31(1), pages 39-60, January.
    43. Eric Helland & Alexander Tabarrok, 2002. "The Effect of Electoral Institutions on Tort Awards," American Law and Economics Review, Oxford University Press, vol. 4(2), pages 341-370.
    44. McMillan, John & Woodruff, Christopher, 1999. "Dispute Prevention without Courts in Vietnam," Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(3), pages 637-658, October.
    45. Huang, Kuo-Chang & Chen, Kong-Pin & Lin, Chang-Ching, 2010. "Does the type of criminal defense counsel affect case outcomes?: A natural experiment in Taiwan," International Review of Law and Economics, Elsevier, vol. 30(2), pages 113-127, June.
    46. Fournier, Gary M & Zuehlke, Thomas W, 1989. "Litigation and Settlement: An Empirical Approach," The Review of Economics and Statistics, MIT Press, vol. 71(2), pages 189-195, May.
    47. Eric Helland & Alexander Taberrok, "undated". "The Effect of Electoral Institutions on Tort Awards," Claremont Colleges Working Papers 1999-07, Claremont Colleges.
    48. Julia Shvets, 2013. "Judicial Institutions and Firms' External Finance: Evidence from Russia," Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(4), pages 735-764, August.
    49. Olivier Jean Blanchard & Kenneth A. Froot & Jeffrey D. Sachs, 1994. "The Transition in Eastern Europe, Volume 1," NBER Books, National Bureau of Economic Research, Inc, number blan94-2.
    50. Dimitrova-Grajzl Valentina & Grajzl Peter & Zajc Katarina & Sustersic Janez, 2012. "Judicial Incentives and Performance at Lower Courts: Evidence from Slovenian Judge-Level Data," Review of Law & Economics, De Gruyter, vol. 8(1), pages 215-252, August.
    51. Jennifer F. Reinganum & Louise L. Wilde, 1986. "Settlement, Litigation, and the Allocation of Litigation Costs," RAND Journal of Economics, The RAND Corporation, vol. 17(4), pages 557-566, Winter.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Peter Grajzl, 2014. "Behind the Courts’ Walls: Empirical Insights from Slovenia," ifo DICE Report, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 12(3), pages 39-44, October.
    2. Peter Grajzl & Katarina Zajc, 2017. "Litigation and the timing of settlement: evidence from commercial disputes," European Journal of Law and Economics, Springer, vol. 44(2), pages 287-319, October.
    3. Dimitrova-Grajzl, Valentina & Grajzl, Peter & Slavov, Atanas & Zajc, Katarina, 2016. "Courts in a transition economy: Case disposition and the quantity–quality tradeoff in Bulgaria," Economic Systems, Elsevier, vol. 40(1), pages 18-38.
    4. repec:ces:ifodic:v:12:y:2014:i:3:p:19131886 is not listed on IDEAS
    5. repec:eee:irlaec:v:53:y:2018:i:c:p:9-22 is not listed on IDEAS
    6. repec:kap:ejlwec:v:44:y:2017:i:2:d:10.1007_s10657-017-9565-4 is not listed on IDEAS

    More about this item

    Keywords

    courts; post-socialist countries; commercial disputes; trial; settlement;

    JEL classification:

    • K40 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - General
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • P37 - Economic Systems - - Socialist Institutions and Their Transitions - - - Legal
    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:ceswps:_4894. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Klaus Wohlrabe). General contact details of provider: http://edirc.repec.org/data/cesifde.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.