Economic Growth and Judicial Independence, a Dozen Years on: Cross-Country Evidence Using an Updated Set of Indicators

Abstract

Over 10 years ago, Feld and Voigt (2003) introduced the first indicator for objectively measuring the actual independence of the judiciary and demonstrated its utility in a large cross-section of countries. The indicator has been widely used, but also criticized. This paper presents more recent data on de jure and de facto judicial independence (JI) and strongly confirms previous results that de jure JI is not systematically related to economic growth, but de facto JI is highly significantly and robustly correlated with growth. In addition, we show that the effect of de facto JI depends on the institutional environment, but not on a country’s initial per capita income.

Keywords: judicial independence, economic growth, rule of law, constitutional economics, governance, measuring institutions

JEL Classification: H11, K40, O40, P51