The Distributive Impact of Reforms in Credit Enforcement: Evidence from Indian Debt Recovery Tribunals

Ulf von Lilienfeld-Toal, Dilip Mookherjee and Sujata Visaria ()
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Sujata Visaria: Boston University
Authors registered in the RePEc Author Service: Sujata Visaria and Sujata Visaria

No dp-183, Boston University - Department of Economics - The Institute for Economic Development Working Papers Series from Boston University - Department of Economics

Abstract: It is generally presumed that strengthening legal enforcement of lender rights increases credit access for all borrowers, by expanding the set of incentive compatible loan contracts. This is based on an implicit assumption of infinitely elastic supply of loans. With inelastic supply, strengthening enforcement generates general equilibrium effects which reduce credit access for small borrowers while expanding it for wealthy borrowers. We find evidence from a firm-level panel data set of such adverse distributional impacts of an Indian judicial reform which increased banks’ ability to recover non-performing loans in the 1990s.

Pages: 43
Date: 2009-04
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-dev, nep-mfd and nep-reg
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: The Distributive Impact of Reforms in Credit Enforcement: Evidence From Indian Debt Recovery Tribunals (2012)
Working Paper: THE DISTRIBUTIVE IMPACT OF REFORMS IN CREDIT ENFORCEMENT: EVIDENCE FROM INDIAN DEBT RECOVERY TRIBUNALS (2010)
Working Paper: The Distributive Impact of Reforms in Credit Enforcement: Evidence from Indian Debt Recovery Tribunals (2010)
Working Paper: The Distributive impact of reforms in credit enforcement: Evidence from Indian debt recovery tribunals (2009)
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