Courts and the economy

New episode of the EBRD podcast available for download 

A new episode of the Pocket Economics podcast looks at the relationship between law courts and the performance of market economies. 

Peter Grajzl, Associate Professor of Economics at Washington and Lee University, argues that “courts are an absolutely essential part of an economy’s landscape”.

“They secure property rights, they enforce contracts and they contribute to sustainable commercial activity,” he explains.

But how can one define and measure how effective a justice system is?

“There are many different dimensions of the effectiveness of a judicial system,” he says. “The first and foremost is certainly judicial independence, i.e. independence from political interference.

“But there are many other dimensions, including accessibility, the ability to actually use a court, low cost and finally it’s very important for a court to be able to resolve a dispute," he tells Jonathan Charles, EBRD Managing Director, Communications.

Mr Grajzl also outlines the importance of alternative dispute resolution mechanisms and the role of courts in fighting corruption.

Good governance, transparency and accountability are major themes of the EBRD’s work. We believe that poor governance contributes to countries being ‘stuck in transition’.