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

39 Pages Posted: 4 Sep 2011

See all articles by Guilherme Lichand

Guilherme Lichand

affiliation not provided to SSRN

Rodrigo R. Soares

Columbia University - School of International & Public Affairs (SIPA); Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics; IZA Institute of Labor Economics

Abstract

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 difference-in-differences and instrumental variable strategies, we find that implementation of Special Civil Tribunals led to increased entrepreneurship, defined as the probability that individuals are employers or self-employed. Results are particularly strong and robust for the case of self-employment, and do not seem to be related to other changes in infrastructure or public good provision at the local level, or to pre-existing trends in entrepreneurship.

Keywords: access to justice, courts, entrepreneurship, institutions, Brazil

JEL Classification: K1, K41, K42, H41, O12, O17, O54

Suggested Citation

Lichand, Guilherme and Soares, Rodrigo R., Access to Justice and Entrepreneurship: Evidence from Brazil's Special Civil Tribunals. IZA Discussion Paper No. 5917, Available at SSRN: https://ssrn.com/abstract=1921968

Guilherme Lichand (Contact Author)

affiliation not provided to SSRN ( email )

Rodrigo R. Soares

Columbia University - School of International & Public Affairs (SIPA) ( email )

420 West 118th Street
New York, NY 10027
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Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

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São Paulo, São Paulo 01332-000
Brazil

IZA Institute of Labor Economics

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Bonn, D-53072
Germany

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