The next CLEAN online seminar will take place on October 26th at 4.30pm Italian time.
The presenter will be Bakhtawar Ali, Researcher at CERP. The title of the paper is "Judicial Corruption, Favor Exchange and the Rule of Law" (abstract below).
Send an email to email@example.com if you are interested in attending CLEAN online seminars.
Abstract: We provide the first systematic evidence of a quid pro quo favor exchange between Judiciary and government, and estimate the impact of judicial corruption on Rule of Law. We find that when the Pakistani government allotted houses to judges, their rulings in favor of the government increased and the quality of their judicial decisions decreased. Our instrumental variable strategy based on judges’ birthplaces and the evidence we present in support of the identifying assumption suggest that our results are causal. The analysis of mechanisms reveal that incentives generated by the house allocation, rather than the political ideology of the judge, are key to explain these results. Using market values, we estimate that an average allocated house worth USD 400,000 bought the government a 20 percentage points increase in pro-government rulings in land expropriation and human rights abuse cases. Our estimates indicate that cumulatively allocation of houses cost the government about 0.02 percent of GDP, however, it allowed the government to expropriate additional land worth 0.05 percent of GDP every year. Our work shifts the focus of literature that has exclusively focused on political corruption to corruption within the Judiciary and shows how gift-giving can substantially undermine Rule of Law.