THE DISTRIBUTIVE IMPACT OF REFORMS IN CREDIT ENFORCEMENT: EVIDENCE FROM INDIAN DEBT RECOVERY TRIBUNALS

Dilip Mookherjee, Ulf von Lilienfeld-Toal and Sujata Visaria ()
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Sujata Visaria: Hong Kong University of Science and Technology
Authors registered in the RePEc Author Service: Sujata Visaria and Sujata Visaria

No WP2010-034, Boston University - Department of Economics - Working Papers Series from Boston University - Department of Economics

Abstract: It is generally presumed that stronger legal enforcement of lender rights increases credit access for all borrowers because it expands the set of incentive compatible loan contracts. This result relies on an assumption that the supply of credit is in nitely elastic. In contrast, with inelastic supply, stronger enforcement generates general equilibrium e ects that may reduce credit access for small borrowers and expand it for wealthy borrowers. In a rm-level panel, we nd evidence that an Indian judicial reform that increased banks' ability to recover non-performing loans had such an adverse distributive impact.

Keywords: credit enforcement; general equilibrium e ect; inelastic credit supply; distributive impact. (search for similar items in EconPapers)
Pages: 66 pages
Date: 2010-01
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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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