STEG Working Paper

Front-line Courts As State Capacity: Evidence from India

Manaswini Rao

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Well-functioning frontline courts facilitate dispute resolution, making them a core aspect of state capacity. Using rich data from India and exogenous variation in the timing of judge staffing changes, I show that these have a persistent effect on judge headcount and vacancy rates in the corresponding district court. Removal of vacancy substantially improves local judicial capacity, where each additional judge resolves 200 legal cases, reducing litigation backlog. In a context with high levels of congestion in local courts, this capacity improvement enables credit circulation, and increases the productivity of local formal sector firms, generating a benefit-cost ratio exceeding 3. Creation of vacancy has a negative effect on the local firms. The reduction in judicial capacity is likely manifested through the ability of law enforcement agencies to contain less serious crimes that require court orders prior to investigation.

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