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Decoding the Code of Civil Procedure: Do Judiciaries Matter for Growth?

  • Matthieu Chemin

This paper attempts to measure the causal impact of the speed of judiciaries on economic activity by using two novel instrumental variables measuring judicial procedural ambiguity and complexity. First, I find that temporally exogenous conflicting judicial decisions taken in India due to the Code of Civil Procedure's ambiguity lead to higher expected trial duration as judges are required to spend considerable time in choosing between several conflicting views. Second, I find that Inidan High Court amendments complicating procedures to treat a case are related to higher trial duration. By using spatial and temporal variations in the occurrence of conflicting decisions and enactment of amendments as instrumental variables, I am able to measure the impact of judicial speed on credit markets, agricultural development and manufacturing performance.

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Paper provided by CIRPEE in its series Cahiers de recherche with number 0726.

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Date of creation: 2007
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Handle: RePEc:lvl:lacicr:0726
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  1. Bianco, Magda & Jappelli, Tullio & Pagano, Marco, 2002. "Courts and Banks: Effects of Judicial Enforcement on Credit Markets," CEPR Discussion Papers 3347, C.E.P.R. Discussion Papers.
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  4. Timothy Besley & Anne Case, 1994. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," NBER Working Papers 4956, National Bureau of Economic Research, Inc.
  5. Daron Acemoglu & Simon Johnson, 2003. "Unbundling Institutions," NBER Working Papers 9934, National Bureau of Economic Research, Inc.
  6. Knack, Stephen & Keefer, Philip, 1995. "Institutions and Economic Performance: Cross-Country Tests Using Alternative Institutional Indicators," MPRA Paper 23118, University Library of Munich, Germany.
  7. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  8. Timothy Besley & Rohini Pande & Lupin Rahman & Vijayendra Rao, 2004. "The Politics of Public Good Provision: Evidence from Indian Local Governments," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 416-426, 04/05.
  9. Wolfgang Koehling, 2002. "The Economic Consequences Of A Weak Judiciary: Insights From India," Law and Economics 0212001, EconWPA.
  10. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
  11. Esther Duflo, 2005. "Why Political Reservations?," Journal of the European Economic Association, MIT Press, vol. 3(2-3), pages 668-678, 04/05.
  12. Mauro, Paolo, 1995. "Corruption and Growth," The Quarterly Journal of Economics, MIT Press, vol. 110(3), pages 681-712, August.
  13. Andrew Powell & Marcela Cristini & Ramiro Moya, 2001. "The Importance of an Effective Legal System for Credit Markets: The Case of Argentina," Research Department Publications 3125, Inter-American Development Bank, Research Department.
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