Courts in a Resource-Starved Developing Economy: Case Disposition and the Quantity-Quality Tradeoff in Post-Conflict Nepal

An effective judiciary is key to prosperous markets and sustained economic development, yet empirical evidence on the functioning of courts in the developing world is very scarce. We examine a court-level panel dataset from the resource-starved, post-conflict Nepal to assess the determinants of the volume of case disposition and presence of a quantity-quality tradeoff. We advance the existing empirical literature on courts by utilizing a novel measure of judicial staffing and suggesting a new instrumental variables approach to address the associated endogeneity concerns. Unlike previous research on judiciaries elsewhere, we find that in Nepal judicial staffing exhibits a robustly positive effect on court output and that caseload-induced congestion effects may be important. We do not find evidence implying that increasing court output would decrease adjudicatory quality. We discuss the policy implications of our results.