Abstract

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 nonpayment 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, and is associated with higher expected duration of judicial proceedings, less consistency, less honesty, less fairness in judicial decisions, and more corruption. These results suggest that legal transplantation may have led to an inefficiently high level of procedural formalism, particularly in developing countries.

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We are indebted to Carl E. Anduri, and Melinda L. Eggenberger of Lex Mundi, Samuel A. Nolen of Richards, Layton and Finger, and Juan Carlos Botero for extensive cooperation throughout this project; to Erhard Blankenburg, Richard Epstein, Judge Roger Errera, Charles Fried, Oliver Hart, Roumeen Islam, Simon Johnson, Louis Kaplow, Bert Kritzer, Lord Justice Law, Atif Mian, Brian Ostrom, Guy Pfeffermann, Eric Posner, Judge Richard Posner, Mark Ramseyer, Alan Schwarts, Steven Shavell, Roberta Romano, Jeremy Stein, Ivo Welch, Lord Woolf, and three anonymous referees for their comments; and to Jose Caballero, Claudia Cuenca, Theodora Galabova, Mario Gamboa-Cavazos, Olga Ioffe, Alfredo Larrea, Margaret Michel, Juan Manuel Pinzon, Alejandro Ponce-Rodriguez, Stef-ka Slavova, Ekaterina Trizlova, and Lihong Wang for excellent research assistance. We have also received considerable input on an earlier draft from Edward Glaeser and Lawrence Katz. This research was funded by the World Bank, the International Institute of Corporate Governance at Yale School of Management, and conducted with the extensive cooperation of Lex Mundi and Lex Africa member firms. The data used in this project are available at http://iicg.som.yale.edu/.