Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/26559 
Year of Publication: 
2008
Series/Report no.: 
CESifo Working Paper No. 2514
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
It has been argued that procedural formalism undermines economic efficiency by fostering rent-seeking and corruption. We challenge this view by arguing that a number of judicial procedures foster economic growth by increasing the predictability of court decisions, which leads to more transactions and higher investment levels. We investigate the effects on economic growth of 15 judicial procedures. Employing a standard growth model, we find in a cross-section of 67 countries that timeliness, writtenas opposed to oralprocedures, and the right to counsel have a positive effect on growth, whereas the number of independent procedural actions as well as the presumption of innocence have negative effects. Our results partially contradict the results of former studies based on the Lex Mundi dataset.
Subjects: 
Judicial procedure
legal formalism
judicial independence
rule of law
investment
growth
JEL: 
H11
K40
O40
P51
Document Type: 
Working Paper
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