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

Dilip Mookherjee, Sujata Visaria and Ulf Lilienfeld Toal
Authors registered in the RePEc Author Service: Sujata Visaria and Sujata Visaria

Working Papers from eSocialSciences

Abstract: It is generally presumed that strengthening the legal enforcement of lender rights increases credit access for all borrowers, by expanding the set of incentive compatible loan contracts. This presumption is based on an implicit assumption of infinitely elastic supply of loans. With inelastic supply, strengthening enforcement generates general equilibrium effects which may reduce credit access for small borrowers, while expanding it for wealthy borrowers. In a firm-level panel, we find evidence of such adverse distributional impacts caused by an Indian judicial reform in the 1990s which increased banks' ability to recover non-performing loans.[Working Paper No. 254]

Keywords: law; finance; contract enforcement; credit rationing (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-mfd
Note: Institutional Papers
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Citations: View citations in EconPapers (3)

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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 (2009)
Working Paper: The Distributive Impact of Reforms in Credit Enforcement: Evidence from Indian Debt Recovery Tribunals (2009)
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