PulseExploreJournal ClubDebatesTrendingResearchersJournals
Instagram
HomeExploreJournal ClubTrending
Synapse
⌘+K
Synapse
June 20, 2026The Review of Economics and Statistics2 citations

Court Capture, Local Protectionism, and Economic Integration: Evidence from China

View Full Paper
ELErnest LiuYLYi LuWPWenwei Peng

Key Points

  • The aim is to evaluate the economic effects of court capture and reforms in the judicial system in China.
  • Exploited staggered roll-out of reforms transferring local court authority to provincial governments.
  • Measured changes in local defendants’ win rates against non-local plaintiffs.
  • Analyzed impact on judicial quality and firm litigations.
  • Found a 7.3% decline in local defendants' win rates against non-local plaintiffs.
  • Observed improved judicial quality and increased litigation from smaller non-local firms.
  • Estimated potential GDP increase of 1.9%, despite persistent favoritism and protectionism.

Abstract

Abstract Court capture in developing countries is pervasive, yet its economic effects remain underexplored. We study a Chinese reform that transferred financial and personnel authority over local courts from local to provincial governments. Exploiting the staggered roll-out, we find a 7.3% decline in local defendants’ win rates against non-local plaintiffs, alongside improved judicial quality. The reform encouraged smaller non-local firms to litigate and attracted non-local investment, potentially raising GDP by 1.9%. Yet favoritism toward politically connected firms and inter-provincial protectionism remain, and centralization itself promotes less qualified judges— revealing both its promise and limits.

Ask AI
Helpful
Bookmark
Share
View Full Paper

Cite This Study

Liu et al. (2026) studied this question.

synapsesocial.com/papers/6a362fbcdb0793dc1a5371bbhttps://doi.org/10.1162/rest.a.1820
Ask AI
Helpful
Bookmark
Share
View Full Paper