Abstract
In this article, we analyze the relationship between the economic growth rate and a rule of law indicator in Mexican states during the period 2006–2013. Specifically, we employ information regarding the time it takes to solve commercial disputes in local courts, which we use as a proxy variable to measure the efficiency of the justice system. In principle, we expect that the shorter the time it takes to resolve commercial disputes, the higher the growth rates will be in the states where the firms are located. Long, drawn-out court disputes are costly for firms, which in turn may translate into lower growth rates due to the negative impact of these costs on their levels of investment. The results suggest that a 100-day decrease in the time it takes to resolve a commercial dispute is associated with an increase of 0.6 per cent in the average GDP per capita growth rate in Mexican states.
Highlights
"The inability of societies to develop effective, low cost enforcement is the most important source of both historical and contemporary underdevelopment in the Third World."
We employ information regarding the time it takes to solve commercial disputes in local courts, which we use as a proxy variable to measure the efficiency of the justice system
We expect that the shorter the time it takes to resolve commercial disputes, the higher the growth rates will be in the states where the firms are located
Summary
Se analiza la relación existente entre el crecimiento económico y el estado de derecho en las entidades federativas de México, en el periodo 2006-2013. Utilizamos información referente al tiempo que toma resolver disputas comerciales en cortes locales, como variable proxy para medir la eficiencia del sistema de justicia de las entidades. Un menor tiempo en la resolución judicial de las disputas resultaría en un mayor crecimiento de las entidades donde las empresas se localizan; esto debido a que los procesos judiciales tienen costos, potencialmente importantes para las empresas, lo que repercute sobre el crecimiento de las mismas. Los resultados indican que una disminución de 100 días en el tiempo promedio que toma resolver disputas comerciales, estaría asociado con un incremento en la tasa de crecimiento del PIB per cápita de 0.6 por ciento en las entidades federativas.
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