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Suing the government under weak rule of law: Evidence from administrative litigation reform in China

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  • Cao, Guangyu
  • Liu, Chenran
  • Zhou, Li-An

Abstract

There is a long-standing debate in the literature about the effectiveness of strengthening judicial independence in developing countries with weak rule of law. This paper exploits a recent Chinese judicial reform in administrative litigation, which changed the jurisdiction rule from intra-regional to trans-regional, to estimate the effects of improved judicial independence on protecting private entities against potential abuses of public authority. We find a significant increase in the probability of successfully suing local governments after the reform, especially when the defendants are more powerful government departments and when the plaintiffs are individual citizens with fewer legal resources than firms. But this effect is more limited for higher-level governments. The reform also results in increased case filings, prolonged trial time, and enhanced judicial quality. In addition, it raises the awareness of both governments and citizens about the rule of law, increases firm entry, and worsens general public attitudes toward local governments, at least in the short term. Our study highlights trans-regional jurisdiction as a new source of judicial independence in a party state and its potential limitations.

Suggested Citation

  • Cao, Guangyu & Liu, Chenran & Zhou, Li-An, 2023. "Suing the government under weak rule of law: Evidence from administrative litigation reform in China," Journal of Public Economics, Elsevier, vol. 222(C).
    • Handle: RePEc:eee:pubeco:v:222:y:2023:i:c:s0047272723000774
    DOI: 10.1016/j.jpubeco.2023.104895
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    Citations

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    Cited by:

    1. Xue, Xizi & Yang, Hao & Yang, Xuan & Zhang, Jiahao & Zhao, Xiaofang & Wang, Yihui, 2023. "Judicial independence and corporate employment: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PC).
    2. He, Weimin & Wang, Bin, 2024. "Environmental jurisdiction and energy efficiency: Evidence from China's establishment of environmental courts," Energy Economics, Elsevier, vol. 131(C).
    3. Kong, Dongmin & Liu, Chenhao, 2024. "Centralization and regulatory enforcement: Evidence from personnel authority reform in China," Journal of Public Economics, Elsevier, vol. 229(C).
    4. Zhao, Da & Guo, Jingyuan & Yu, Shule & Yu, Litian, 2024. "Tradeoff between local protection and public sector performance: Lessons from judicial fiscal centralization," Journal of Economic Behavior & Organization, Elsevier, vol. 220(C), pages 254-278.
    5. Zhang, Wei & Ke, Jinjun & Ding, Yougang & Chen, Sicen, 2024. "Greening through finance: Green finance policies and firms' green investment," Energy Economics, Elsevier, vol. 131(C).

    More about this item

    Keywords

    Judicial Independence; Administrative Litigation; Trans-Regional Jurisdiction Reform; China;
    All these keywords.

    JEL classification:

    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • H77 - Public Economics - - State and Local Government; Intergovernmental Relations - - - Intergovernmental Relations; Federalism
    • P37 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Legal

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