Why Does It Take So Long to Collect Your Money through the Courts? And What Can Be Done About It? (with Special Reference to the MENA Region)

Jeffrey B. Nugent, University of Southern California

Abstract

This paper extends the study by Djankov et al (2003) on the determinants of the average time it takes a court to settle disputes concerning eviction of a tenant who has not paid the rent and to collect on a bad check. It does so in three ways. (1) It shows that some of the components of their formalization indexes ñ that were said to act as the link between legal tradition and court delays - are more important than others in explaining these delays. (2) It examines another possible link between legal tradition and court delays, namely, that through property rights. (3) It investigates the role of colonial experience and government budget allocations to the judiciary in this process. Finally, since court delays have been said to be an especially strong obstacle to success by private businesses in the MENA region, it examines the extent to which MENA countries, both collectively and individually deviate from the predictions of the model. For this reason, our suggestions of what can be done about it are derived from the experience of this region.

Keywords: judicial efficiency, court delays, legal tradition, colonial experience, legal transplants, institutions, trade agreements
JEL Classification: K10, O1, N20

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