Access to Justice and Entrepreneurship: Evidence from Brazil’s Special Civil Tribunals

Entrepreneurship is usually identified as an important determinant of aggregate productivity and long-term growth. The determinants of entrepreneurship, nevertheless, are not entirely understood. A recent literature has linked entrepreneurship to the development of the justice system. This paper con...

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Bibliographic Details
Published in:The Journal of law & economics 2014-05, Vol.57 (2), p.459-499
Main Authors: Lichand, Guilherme, Soares, Rodrigo R.
Format: Article
Language:English
Subjects:
Brazil
Correlation analysis
Credit
Entrepreneurs
Entrepreneurship
Instrumental variables estimation
Judicial process
Judicial system
Latin America
Level of education
Placebos
Population education
Productivity
Public goods
Self employment
Small and medium sized enterprises
Studies
Tribunals
Tribunals & commissions
Urban populations
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Summary:Entrepreneurship is usually identified as an important determinant of aggregate productivity and long-term growth. The determinants of entrepreneurship, nevertheless, are not entirely understood. A recent literature has linked entrepreneurship to the development of the justice system. This paper contributes to this literature by evaluating the role of access to justice in determining the incidence of entrepreneurship. We explore the creation of special civil tribunals in the Brazilian state of São Paulo during the 1990s. Special civil tribunals increased the geographic presence of the justice system, simplified judicial procedures, and increased the speed of adjudication of disputes. Using census data and an instrumental variables strategy, we find that implementation of special civil tribunals led to increased entrepreneurship among individuals with higher levels of education. Results do not seem to be related either to other changes in public goods provision at the local level or to preexisting trends.
ISSN:0022-2186
1537-5285
DOI:10.1086/675087