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Does Arbitration Blossom when State Courts are Bad?
It is often conjectured that non-state dispute resolution blossoms when state courts are not independent or are perceived as low-quality courts. This conjecture implies a substitutive relationship between state and nonstate dispute resolution. An alternative hypothesis argues that both the quali...
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| Published in: | MAGKS - Joint Discussion Paper Series in Economics (Band 06-2009) |
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| Main Author: | |
| Format: | Work |
| Language: | English |
| Published: |
Philipps-Universität Marburg
2009
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| Subjects: | |
| Online Access: | PDF Full Text |
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| Summary: | It is often conjectured that non-state dispute resolution blossoms when
state courts are not independent or are perceived as low-quality courts.
This conjecture implies a substitutive relationship between state and nonstate
dispute resolution. An alternative hypothesis argues that both the
quality and the frequency of use of these two alternative mechanisms are
complementary: societies with high-quality state courts would also be able
to provide high-quality non-state dispute resolution. This is the first study
that puts these hypotheses to an empirical test. It turns out that the lower
the perceived quality of state courts, the less frequently conflicting firms
resort to them. Second, firms in common-law countries turn away from
state courts significantly more often than firms in civil-law countries. This
result sheds doubt on the robustness of results generated within the legal
traditions literature. Finally, in states that have created the preconditions
for arbitration, businesspeople resort significantly more often to state
courts. We interpret this as evidence in favor of the complementarity
hypothesis. |
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| ISSN: | 1867-3678 |
| DOI: | 10.17192/es2023.0220 |