DP3344 Courts: The Lex Mundi project

Author(s): Simeon Djankov , Rafael La Porta , Florencio López-de-Silanes , Andrei Shleifer

Publication Date: April 2002

Keyword(s): enforcement of contracts , courts , judicial efficiency

JEL(s): K40 , P50

Programme Areas: Financial Economics , Public Policy , Transition Economics

Link to this Page: www.cepr.org/pubs/dps/DP3344.asp

In cooperation with Lex Mundi member law firms in 109 countries, we measure and describe the exact procedures used by litigants and courts to evict a tenant for non-payment of rent and to collect a bounced check. We use these data to construct an index of procedural formalism of dispute resolution for each country. We find that such formalism is systematically greater in civil than in common law countries. Moreover, procedural formalism is associated with higher expected duration of judicial proceedings, more corruption, less consistency, less honesty, less fairness in judicial decisions, and inferior access to justice. These results suggest that legal transplantation may have led to an inefficiently high level of procedural formalism, particularly in developing countries.