#10225. Justice delayed is growth denied: The effect of slow courts on relationship-specific industries in india

September 2026publication date
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Journal’s subject area:
Law
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Abstract:
Are well-functioning formal judicial institutions important for economic development, or can informal contracting arrangements provide adequate substitutes? This paper aims to answer this question using variation across industries in their reliance on contracts along with variation across Indian states in the average speed of courts. The identification strategy is motivated by theory from the incomplete contracting literature, in which it is argued that transactions involving relationship-specific investments are more exposed to postcontractual opportunism and hence have greater need for efficient contract enforcement.
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