A Conceptual Framework on the Impact of Regulatory Quality on Litigation

Abstract

In the research fields of both law and economics, literature on the quality of regulation has gained importance in recent years. Particularly, the economic effect of sound business regulation has been examined. However, almost no research exists on the effect of regulatory quality on litigation and court delay. Therefore, this article examines the latter relationship by developing a conceptual framework, which states that lower regulatory quality: (i) stimulates the recourse to justice and (ii) increases case disposition time by impeding the judge’s and lawyers’ work. Both effects in turn increase backlogs in the courts. Furthermore, this article provides empirical evidence that confirms the hypothesized inverse relationship between litigation and regulatory quality.