Justice Delayed Is Growth Denied: The Effect of Slow Courts on Relationship-Specific Industries in India
利用印度各邦法院速度和行业对合同依赖程度的差异，研究发现法院效率与行业关系特定性的交互作用能显著预测制造业增长，表明正式司法制度对经济发展至关重要。
Are well-functioning formal judicial institutions important for economic development, or can informal contracting arrangements provide adequate substitutes? This paper aims to answer this question using variation across industries in their reliance on contracts along with variation across Indian states in the average speed of courts. The identification strategy is motivated by theory from the incomplete contracting literature, in which it is argued that transactions involving relationship-specific investments are more exposed to postcontractual opportunism and hence have greater need for efficient contract enforcement. The paper finds that the interaction between state-level court efficiency and industry-level relationship specificity is highly predictive of future growth in India’s formal manufacturing sector. The threat of omitted variable bias is minimized by the inclusion of state and industry fixed effects, while a number of robustness checks and placebo tests rule out competing explanations and provide additional confidence in the hypothesized mechanism.