A quantitative assessment of the efficiency of the judicial sector in Latin America

International Review of Law and Economics

Volumn 17, Issue 2, 1997, Pages 275-291

  Buscaglia, Edgardo ^a   Ulen, Thomas ^b  

^a STANFORD UNIVERSITY   (United States)

^b UNIVERSITY OF ILLINOIS AT URBANA CHAMPAIGN   (United States)

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[No Author keywords available]

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EID: 0031164809     PISSN: 01448188     EISSN: None     Source Type: Journal    
DOI: 10.1016/S0144-8188(97)00007-0     Document Type: Article

References (53)

1. 1 "The notion of liberal democracy is defined not only through the compliance with certain procedural requirements, notably of a political nature (namely, free and periodic elections, political competition, representation, etc.) . . . but also through the real application and realization of a rule of law regime." See Pilar Domingo, "Rule of law and judicial systems in the context of democratization and economic liberalization: A framework for comparison and analysis in Latin America," Division de Estudios Politicos, Centro de Investigation y Docencia Economicas, No. 25, 1995.
2. 2 The latest World Competitiveness Report provides an international comparison of the public's confidence in their judicial systems in 35 developed and developing countries. All Latin American countries, except Chile, rank in the bottom 20% of the confidence index. See World Competitiveness Report (1994): see Buscaglia, E., March 13, 1995; p. A13.
3. 3 Estudio de Opinion Acerca de la Justida en la Argentina Institute Gallup de la Argentina, March 1994, p. 99.
4. 4 See Maria Tereza Sadek and Rogerio Bastos Arantes, "The crisis of the Brazilian judiciary: The judges' perspective," Paper presented at the 16th World Congress of the International Political Science Association, August 21-25, 1994, p. 9-11. Each component of the reform measures mentioned in the text is an integral part of judicial reform. It is unrealistic, however, to think that all the components can be dealt with at once. Stages of action must be planned considering the costs and benefits of reform as perceived by politicians and court officers. For this conclusion see Edgardo Buscaglia and Maria Dakolias, "Judicial reform in Latin America: Economic efficiency v. institutional inertia," Proceedings of the First Annual Meetings of the Latin American Law and Economics, Mexico City, February 2-3, 1995.
5. 4 See Maria Tereza Sadek and Rogerio Bastos Arantes, "The crisis of the Brazilian judiciary: The judges' perspective," Paper presented at the 16th World Congress of the International Political Science Association, August 21-25, 1994, p. 9-11. Each component of the reform measures mentioned in the text is an integral part of judicial reform. It is unrealistic, however, to think that all the components can be dealt with at once. Stages of action must be planned considering the costs and benefits of reform as perceived by politicians and court officers. For this conclusion see Edgardo Buscaglia and Maria Dakolias, "Judicial reform in Latin America: Economic efficiency v. institutional inertia," Proceedings of the First Annual Meetings of the Latin American Law and Economics, Mexico City, February 2-3, 1995.
6. 5 See World Competitiveness Report, supra note 5 at 23-27.
7. 6 The results indicate that in samples of 60 to 100 firms per country, the majority of these enterprises consider the role of the judiciary as "deficient." See Edgardo Buscaglia, Maria Dakolias, and William Ratliff, "Judicial Reform in Latin America: A framework for Economic Development." Essays in Public Policy, Stanford University Press, 1995.
8. 7 The World Bank conducted the survey of 68 private enterprises to determine the constraints on Ecuadorian private sector development. The results indicated that the most significant constraints were the following: political instability, inflation and price instability, the lack of skilled labor, the lack of infrastructure, the high level of taxation, the poor functioning of the judicial system, excessive regulatory constraints, the lack of access to credit, and the lack of market services. "Ecuador: Private sector assessment," World Bank, 1994.
9. 8 See World Competitiveness Report, supra note 5 at 21.
10. 9 See Gallup Survey, supra note 6.
11. 10 See World Competitiveness Report, supra note 5 at 15.
12. 11 Buscaglia, supra note 2.
13. 12 Buscaglia, Ratliff and Dakolias, supra note 6, at 12-14, show that as times-to-disposition increase, the filings per court decrease.
14. 13 For example, 69.1% of the Brazilian judges interviewed indicated that they considered it important to expand the use of extra-judicial conciliation to improve the administration of justice. See World Competitiveness Report, supra note 5 at 6.
15. 14 The ADR services recently introduced throughout Latin America have experienced a very weak demand. The Inter-American Development Bank has found an initial public rejection of ADR mechanisms within the civil jurisdictions of Uruguay and Argentina during the first 2 years since their operations started. See "Legal reform in Latin America," Inter-American Development Bank, Washington, D.C., pp. 45-56.
16. 15 This segmentation in the ADR market in a developing country environment was first proposed in Edgardo Buscaglia, "Stark picture of justice," The Financial Times, March 21, 1995, p. 12; and Buscaglia and Dakolias, supra note 7.
17. 15 This segmentation in the ADR market in a developing country environment was first proposed in Edgardo Buscaglia, "Stark picture of justice," The Financial Times, March 21, 1995, p. 12; and Buscaglia and Dakolias, supra note 7.
18. 16 See World Competitiveness Report, supra note 5 at 56; and Buscaglia, supra note 2.
19. 16 See World Competitiveness Report, supra note 5 at 56; and Buscaglia, supra note 2.
20. 17 In more technical terms, in a developing country environment without a well-developed ADR system, small firms and low-income sections of the population possess a smaller elasticity of demand for justice.
21. 18 Surveys conducted throughout the region show that 94% of small businesses consider ADR mechanisms expensive and uncertain, whereas 98% of court-users do not trust mediators unless they are provided by the courts. This suggests a problem of public trust that still hampers the development of ADR mechanisms. See Buscaglia, supra note 2.
22. 19 Id.
23. 20 Id.
24. 21 The duration of litigation used here follows the Cappelletti-Clark frame of analysis also known as the "expected duration of the marginal case filed" (EDMCF) approach. In this context, the courts' EDMCF index is jointly determined by the annual number of cases filed, pending, and disposed (or withdrawn). The Cappelletti Yearly Index used here is calculated by dividing the number of pending cases for each court at the end of each year by the number of cases disposed of during the same year. See John Merryman, "Measuring time delay," Stanford University (1977), unpublished manuscript.
25. 22 Id. at 47-48.
26. 23 Before one draws any general conclusions, however, the analysis of times-to-disposition must be conducted within each national legal system separately. This is owing to the sometimes profound differences in the legal systems, even within Latin America. Another implication of this observation is that an international assessment comparing absolute times-to-disposition across countries would be senseless because of the deep differences between legal systems.
27. 24 The "clearance rate" is defined as cases disposed of as a percentage of cases received by a court within a given period of time. A decrease in the clearance rate represents a deterioration in the quality of court services. An increase represents an improvement in the quality of court services. These measures hold, of course, under an "all other things being equal" assumption.
28. 25 The raw information from which we calculate the numbers presented in Table 2 has been obtained from the annual reports of the Supreme Courts and the Office of Court Statistics of each of the countries included in our analysis. Table 1 expands the series developed in Buscaglia and Dakolias, supra note 5 at 14.
29. 26 This 1-year lag correlation was first introduced in Buscaglia and Dakolias, supra note 6 at 15.
30. 27 Generally surveys and polls are needed to assess the population's overall confidence in the justice system as a proxy for the court-users' perception of quality. See Buscaglia, Dakolias, and Ratliff, supra note 7.
31. 28 See World Competitiveness Report, supra note 5 at 32.
32. 29 See Gallup Survey, supra note 6 at 14-16.
33. 30 See Carlos Gregorio, "Investigacion sobre la Demora en el proceso judicial: Informe final," La Ley (1993).
34. 31 The CIA World Factbook, Central Intelligence Agency, Washington, D.C. 1994.
35. 32 See World Competitiveness Report, supra note 5 at 34 and 44-46.
36. 33 See World Competitiveness Report, supra note 5 at 11.
37. 34 Id. at 15.
38. 35 "Informe del Poder Judicial," Poder Judicial de la Nacion Argentina, Buenos Aires, 1994, p. 34; "Informe de la Corte Suprema," Poder Judicial del Ecuador, Quito, 1994.
39. 35 "Informe del Poder Judicial," Poder Judicial de la Nacion Argentina, Buenos Aires, 1994, p. 34; "Informe de la Corte Suprema," Poder Judicial del Ecuador, Quito, 1994.
40. 36 See World Competitiveness Report, supra note 5 at 12.
41. 37 See Domingo, supra note 2 at 23-24.
42. 38 This paper expands the initial finding in Buscaglia and Dakolias (1995) by including additional countries. See supra note 5 at 20.
43. 39 Our numerical results show that, during the first 2 years alter significant increases in real spending, filings per court first increase and later decrease once again.
44. 40 See Robert Page. Argentina Report, DEA Consulting Group, 1994, unpublished manuscript.
45. 41 Id.
46. 42 Id.
47. 43 We might have measured judicial efficiency by any of a number of statistics: the clearance rate, the number of cases decided per judge, times-to-disposition, sitting hours of judges relative to sentences, and cost-per-case-processed are all examples of standard efficiency measures. Each of these measures has strengths and weaknesses. For example, to meet a "sustainable" efficiency criterion in the provision of court services, a high clearance rate must be accompanied by the public's perception that they have reasonable access to the courts. It is possible to find court systems with very high clearance rates that at the same time lack the public's confidence, and, therefore, provide a low-quality service. On reflection about the strengths and weaknesses of each measure or of some composite measure, we have chosen to focus on "times to disposition" as our principal measure of judicial efficiency.
48. 44 Clearly, there is a correlation among some of the variables we have identified as supply-side factors. For instance, the wider availability of computer technology would, all other things being equal, free up judicial time for settlement conferences and for substantive dispute resolution (away from administrative purposes). Also, more real resources might well lead to more computers.
49. 45 Following Stone, we classify firms' size within the textile and agricultural sectors according to their number of employees. We consider the range 1 to 25 employees to represent a small firm, the range of 26 to 250 employees to represent a medium firm, and the range above 250 employees to represent a large firms. See Andrew Stone, "Measuring transaction costs in the textile industry in Argentina, Brazil, and Chile," The World Bank, 1993, unpublished manuscript.
50. 46 Previous studies have shown that the question of how to reduce time-to-disposition is an extremely complex issue. This previous research, however, has been based on aggregate data rather than case-level information. Our study overcomes the limitations that have plagued previous researchers by collecting more extensive and detailed information about the litigation, the case structure, and processing within the courts, and by analyzing individual case-level information through surveys of the courts and the litigation involved. For examples of previous studies, see Julio Cueto Rua, "Los abogados y la congestion en los tribunales," La Ley 23-37 (1992); and Corte Suprema de Justicia, Cantidad de Expedientes Tramitados en los Fueros de la Capital Federal y Jurisdicciones Federales del Interior (1991). See also Gregor, supra note 35.
51. 46 Previous studies have shown that the question of how to reduce time-to-disposition is an extremely complex issue. This previous research, however, has been based on aggregate data rather than case-level information. Our study overcomes the limitations that have plagued previous researchers by collecting more extensive and detailed information about the litigation, the case structure, and processing within the courts, and by analyzing individual case-level information through surveys of the courts and the litigation involved. For examples of previous studies, see Julio Cueto Rua, "Los abogados y la congestion en los tribunales," La Ley 23-37 (1992); and Corte Suprema de Justicia, Cantidad de Expedientes Tramitados en los Fueros de la Capital Federal y Jurisdicciones Federales del Interior (1991). See also Gregor, supra note 35.
52. 47 We used the rank-based nonparametric Spearman index. A correlation coefficient is always between -1 and +1. A correlation coefficient of +1 means that all of the data are perfectly positively (directly) correlated. A correlation coefficient of -1 means that all of the data points are perfectly negative (inversely) correlated. If the correlation coefficient is close to 0, then there is no relationship between the variables. In our case, each correlation can be significant or insignificant at a 5% confidence level. In the charts if a correlation is accompanied by the symbol "(I)," then this means that there is more than a 95% chance of a zero correlation for the population.
53. 48 We further probed this claim that there is no correlation between filings per population and pretrial discussion by using the t-distribution to compute the likelihood of a zero correlation. We found that there is a very high likelihood of no correlation's existing. That is, in both countries a more congested court is not likely to experience a longer pretrial discussion stage.