The functioning of courts in a developing economy: evidence from Nepal

We provide an empirical insight into the functioning of the judiciary in the developing world by assessing the determinants of the volume of case disposition and the presence of the quantity–quality tradeoff in the courts of resource-starved, post-conflict Nepal. Methodologically, we advance the existing empirical literature on courts by utilizing a novel measure of judicial staffing and suggesting a new instrumental variables approach to address the corresponding endogeneity concerns. Unlike previous research on judiciaries elsewhere, we find that in Nepal judicial staffing exhibits a robustly positive effect on court output and that caseload-induced congestion effects may be important. We do not find evidence implying that increasing court output would decrease adjudicatory quality. We discuss the policy implications of our results.