A QUANTITATIVE ASSESSMENT OF THE EFFICIENCY OF THE JUDICIAL SECTOR INLATIN-AMERICA

There is a widespread belief throughout Latin America that the judicia l sector is not in a position to foster private sector development wit hin a market system. The courts are overburdened and unable to dispose of cases in a timely fashion. As a result, frustrated litigants lose faith in the public justice system's ability to resolve their disputes . This loss of faith, in turn, causes private parties to factor added costs for judicial delay into their private transactions, and these ad ded costs reduce economic activity and retard economic development. Be cause there are no viable alternative dispute resolution mechanisms in Latin American countries, the region urgently needs an efficient judi cial sector to complement the market reforms recently introduced by ma ny governments. An important implication of this observation is that t he enhancement of the capability of the courts to satisfy the demand f or dispositions is one of the most important, but least noted, aspects of Latin American economic development strategies. First, we report t he results of surveys of court-users in several Latin American countri es in an effort to identify the causes of dissatisfaction with the cou rts. Second, we show that simply increasing the amount of financial re sources available to the judiciary will not necessarily increase the c ourts' efficiency. Finally, we look at a large sample of commercial ca ses in Argentina and Venezuela to identify court-related and Litigant- related factors associated to the length of cost-adjusted time to fina l disposition of court cases. On the basis of this empirical work we i dentify the most fruitful courses of judicial reform in Latin America. (C) 1997 by Elsevier Science Inc.