The impact of structural reforms of the judicial system: a survey

Ana Gouveia (), Silvia Santos and Corinna Herber
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Ana Gouveia: GPEARI - Research and Economic Policy Division

No 64, GEE Papers from Gabinete de Estratégia e Estudos, Ministério da Economia

Abstract: This paper surveys the literature on the impact of structural reforms of the judicial system. We focus on two key types of reforms: those enhancing the overall efficiency of the system, in terms of quantitative outcomes; and those aiming at enhancing the bankruptcy regime. In the first branch, and given the way the existing literature is organized, we proceed in two steps. We first provide an overview of the studies linking judicial reforms with sectoral performance. We then elaborate on the effects of this improved performance on economic outcomes. In the second branch, we directly present the impact on economic outcomes, in particular concerning access to finance and investment. In a nutshell, reforms that increase courts’ size, increase spending on information and communication technologies (ICT), improve governance or foster education and training have a positive impact on judicial efficiency, which, in turn, promotes investment, ensures better credit and allows firms to thrive. Concerning bankruptcy regimes, there is evidence that a more efficient system is related with a lower cost of funding and a higher amount and length of credit in the economy and consequently with more investment, innovation and entrepreneurship. These empirical results highlight the relevance of promoting judicial system reforms, as a way to ensure sustained economic growth.

Keywords: Structural reforms; judicial system; bankruptcy regimes, economic growth (search for similar items in EconPapers)
JEL-codes: C22 E24 E31 J64 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2017-01, Revised 2017-01
New Economics Papers: this item is included in nep-law and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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