a quantitative assessment of the efficiency of the judicial sector in latin america

ELSEVIER

A Quantitative Assessment of the Efficiency of the Judicial Sector in Latin America

EDGARDO BUSCAGLIA

Stanford University and Washington College, Palo Alto, CaliJbrnia E-mail: [email protected]

and

THOMAS ULEN

University of Illinois, Urbana-Champaign, Illinois

There is a widespread bel ief t h roughou t Latin Amer ica that the judic ia l sector is not in a posi t ion to foster private sector deve lopmen t within a marke t system. The courts are ove rburdened and unable to dispose of cases in a timely fashion. As a result, f rustrated litigants lose faith in the public just ice system's ability to resolve their disputes. This loss of faith, in turn, causes private part ies to factor a d d e d costs for judic ia l delay into their private transactions, and these a d d e d costs reduce economic activity and re tard economic development . Because there are no viable alternative dispute resolut ion mechanisms in Latin Amer ican countries, the region urgent ly needs an efficient judic ia l sector to c o m p l e m e n t the marke t reforms recently in t roduced by many governments . An impor t an t impl icat ion of this observation is that the e n h a n c e m e n t of the capabili ty of the courts to satisfy the d e m a n d for disposit ions is one of the most impor tant , but least noted, aspects of Latin Amer ican economic deve lopmen t strategies. First, we r epor t the results of smweys of court-users in several Latin Amer ican countr ies in an effort to identify the causes of dissatisfaction with the courts. Second, we show that simply increasing the amoun t of f inancial resources available to the judic iary will not necessarily increase the courts ' efficiency. Finally, we look at a large sample of commercial cases in Argent ina and Venezuela to identify court-re la ted and l i t igant-related factors associated to the length of cost-adjusted t ime to final disposit ion of cour t cases. On the basis of this empir ical work we identify the most fruitful courses of judic ia l reform in Latin America. © 1997 by Elsevier Science Inc.

The authors wish to thank Pilar Domingo, William Ratliff, and Laurence Whitehead for valuable discussions about the subject; and Antonio Brinaldi, ,~Yshley Harris, and Anthony Pietro for their invaluable research assistance.

International Review of Law and Economics 17:275-291, 1997 © 1997 by Elsevier Science Inc. 655 Avenue of the Americas, New York, NY 111010

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276 Efficiency of the Latin American judiciary

I. Introduct ion

As Latin America continues the process of economic reform, the need for a well- funct ioning judiciary becomes increasingly important. The shift of most economic transactions toward the market and away from the public administrative sphere has created an unprecedented increase in the private sector demand for an improved definition of rights and obligations. 1 As a result, the judiciary is an important, but little noticed, e lement of economic development.

Legal principles in most Latin American countries encourage the f reedom to exercise individual rights and property rights. But this f reedom is meaningless without an effective judicial system in which to vindicate these rights. Consistent enforcement provides a stable institutional environment for economic decisions to be made in a predictable way. In many of the judicial systems in Latin America, however, this stability is lacking: Laws are unclear, and the way the courts apply the laws is highly uncertain. Coupled with delays in resolving cases, these factors increase litigation costs and induce potentially inefficient private behavior designed to avoid these costs.

The judiciaries in most Latin American countries are suffering from increasing backlogs, delay, and corruption, which have created a pervasive distrust of the system by the private sector and the public at large. 2 In the absence of an impartial and efficient judiciary or alternative dispute-resolution mechanisms, private parties tend to rely on reputation, familial relations, and repeated transactions with trusted parties. These devices exclude many potentially socially beneficial transactions involving previously unfamiliar parties or start-up businesses.

If the judiciary is to provide the impartiality and efficiency necessary for public trust and economic development, a well-defined program for judicial reform needs to address the main factors causing a deterioration in the quality and quantity of court services. These factors include: the administration of the courts; management techniques; the system of legal education; the methods for licensing lawyers and selecting judges; the education of the public about the legal system; the means o f access to justice; the availability of alternative dispute-resolution mechanisms; judicial independence; and procedural reforms. For example, in Argentina the public has stated that, to reform the judiciary, oral proceedings and alternative dispute-resolution mechanisms should be introduced. ~ Judges in Brazil cite improved information technology, revised court procedures, and the creation of small claims courts as the most important elements of judicial reform. 4

l"The notion of liberal democracy is defined not only through the compliance with certain procedural requirements, notably of a political nature (namely, free and periodic elections, political competition, representation, etc.) . . . but also through the real application and realization of a rule of law regime." See Pilar Domingo, "Rule of law and judicial systems in the context of democratization and economic liberalization: A framework for comparison and analysis in Latin America," Division de Estudios Politicos, Centro de Investigacion y Docencia Economicas, No. 25, 1995.

2The latest World Competitiveness Report provides an international comparison of the public's confidence in their judicial systems in 35 developed and developing countries. All Latin American countries, except Chile, rank in the bottom 20% of the confidence index. See World Competitiveness Report (1994): see Buscaglia, E., March 13, 1995; p. A13.

"~Estudio de Opinion Acerca de la Justicia en la Argentina Institute GaUup de la Argentina, March 1994, p. 99. 4See Maria Tereza Sadek and Rogerio Bastos Arantes, "The crisis of the Brazilian judiciary: The judges' perspective,"

Paper presented at the 16th World Congress of the International Political Science Association, August 21-25, 1994, p. 9-11.

Each component of the reform measures mentioned in the text is an integral part of judicial reform. It is unrealistic, however, to think that all the components can be dealt with at once. Stages of action must he planned considering the costs and benefits of reform as perceived by politicians and court officers. For this conclusion see Edgardo Buscaglia

E. BUSCAGLL~ AND T. ULEN 277

This p a p e r identif ies the causes of judic ia l inefficiency in Latin Amer ica and suggests means of cor rec t ing that inefficiency. In the first par t we survey the at t i tudes of individuals and businesses toward the courts in Latin Amer ican countries. Generally, we f ind that there is great dissatisfaction with the courts, pr incipal ly because of the delays and backlogs in disposing of cases. Next we consider the re la t ionship between cost- adjusted times-to-disposition (our measure of judic ia l efficiency) and the resources provided to the courts by the government . If more judic ia l resources will reduce the times-to-disposition and thereby increase judic ia l efficiency, then there is a clear warrant for r e c o m m e n d i n g increased judic ia l funding as an impor t an t e l emen t of judic ia l reform in Latin America. But we f ind no clear corre la t ion between the level of resources available to the courts and judic ia l efficiency. In the last par t o f t h e paper , we look more closely at a comprehens ive set of commercia l cases from Argent ina and Venezuela to identify factors besides judic ia l resource constraints that account for a lack of judic ia l efficiency and might, therefore, be cor rec ted so as to allow the judic iary to foster, ra ther than retard, economic development .

II. The Efficiency of Latin Amer ican Judicia l Systems

Here we first r epor t a survey of the at t i tudes of individuals and businesses toward the courts in Latin Amer ican countr ies and then cons ider the re la t ionship between jud ic ia l efficiency and the amoun t of resources provided to the courts by the government .

A Survey of Attitudes Toward the Latin American Judicial Systems

The jud ic ia l sector in Latin Amer ica is ill p r e p a r e d to foster private sector deve lopmen t within a marke t system. 5 The results of business surveys th roughou t Latin Amer ica indicate that the judic ia l system is cons idered to be among the most significant constraints to private sector development . 6 For example , a Wor ld Bank survey conduc ted in May, 1993, in Ecuador among private bus inessmen found the judic ia l system to be the sixth 7 most significant const ra int to private sector development . The central compla in t in Ecuador and elsewhere is that the region ' s judic iar ies provide ne i the r pred ic tab le rul ing s , nor reasonable accessibility, nor reasonable t imes-to-disposition of disputes.

It is no t only businessmen who f ind the Latin Amer ican judic iary unacceptable . The publ ic ' s view of the judic iary reflects a deep distrust of the system. Surveys conduc ted in Argent ina , Brazil, Ecuador, and Peru show that between 55 and 75% of the public has a very low opin ion of the judic ia l sector, s More specifically, in Argen t ina 46% of the peop le surveyed perceived the judic ia l sector as inaccessible and corrupt . In Brazil,

and Maria Dakolias, 'Judicial reform in Latin America: Economic efficiency v. institutional inertia," Proceedings of the First Annual Meetings of the Latin Anwrican Law and Economics, Mexico City, February 2-3, 1995.

5See World Competitiveness Report, supra note 5 at 23-27. 6The results indicate that in samples of 60 to 100 firms per country,, the majority of these enterprises consider the

role of the judiciary as "deficient." See Edgardo Buscaglia, Maria Dakolias, and William Ratliff, 'Judicial Reform in Latin America: A framework for Economic Development." Essays in Public Policy, Stanford University Press, 1995.

7The World Bank conducted the survey of 68 pr i~te enterprises to determine the constraints on Ecuadorian private sector development. The results indicated that the most significant constraints were the following: political instability, inflation and price instability, the lack of skilled labor, the lack of infrastructure, the high level of taxation, the poor functioning of the judicial system, excessive regulatory constraints, the lack of access to credit, and the lack of market services. ""Ecuador: Private sector assessment," World Bank, 1994.

8See World Competitiveness Report, supra note 5 at 21.


Ecuador, and Venezuela the percentages are 56, 47, and 67%, respectively. 9 Addi t ion- ally, 76.9% of the judges interviewed in Brazil consider that the judic iary is in a state of crisis, m These feelings, as we shall see in more detail below, are due to a percep t ion that the courts are cor rup t and that there are u n p r e c e d e n t e d delays and backlogs in the c o u r L s . 1 1

One possible corrective is for potent ia l litigants to make every effort to avoid using the cour t s - - e .g . , th rough e i ther avoiding controversial relat ionships or by simply avoiding disputes. ~2 Ano the r is for private dispute-resolut ion services to step in to allex4ate the excess d e m a n d for the services of the public courts. Alternative dispute-resolut ion (ADR) mechanisms, such as arbi t ra t ion and mediat ion, can he lp to alleviate the caseload by removing complex and highly visible cases from the courts ' dockets.l:~ Al though the genera l publ ic may benef i t in the long run from the use of more efficient private sector-provided arbi t ra t ion, media t ion , and conci l ia t ion mechanisms, exper ience shows that the public does not immedia te ly trust new mechanisms for the supply ofjustice.~4 This is due to the fact that the average indMdua l is not as familiar with the negot ia t ing techniques n e e d e d to resolve disputes, according to la~Ters working in textile manu- factur ing and agriculture. 15

There may also be adverse dis t r ibut ional effects and undes i rable secondary inefficiency impacts of the inefficient public courts. Small companies and low-income fam- ilies often cannot afford the relatively expensive private dispute-resolut ion services. That means that, if they are to have just ice, they must get it f rom the heavily subsidized publ ic courts, where, as we have seen, there are long delays. Because small and start-up businesses face credi t constraints, they are fur ther b u r d e n e d by the costs of cour t delays. 16 If it also happens that those courts are corrupt , as is the widespread pe rcep t ion in Latin American, small businesses and low-income litigants become the pr imary targets of cor rupt ion . ~7

In contrast, b igger and well-established businesses usually do not rely as much on the publ ic courts to smwive because they can afford private dispute-resolut ion alternatives and also they have exper ienced lobbyists, who use their connect ions with the local government elite to get exped i ted t rea tment for their large clients in the public courts. 18

%ee Gallup Sun~ey, supra note 6. l°See World competitiveness Report, supra note 5 at 15. I iBuscaglia, supra note 2. 12Buscaglia, Ratliff and Dakolias, ~upra note 6, at 12-14, show that as times-to-disposition increase, the filings per

court decrease. 13For example, 69.1% of the Brazilian judgcs inten:iewed indicated that they considered it important to expand the

use of extrazjudicial cnncifation to improve the administration of justice. See World Competitiveness Report, supra note :5 at 6.

t4The ADR services recently introduced throughout Latin America have experienced a v m T weak demand. The Inter-American Development Bank has found an initial public rejection of ADR mechanisms within the civil.jurisdictions of Uruguay and Argentina during the frst 2 years since their operations started. See "Legal reR)rm in Latin America," Inter-American Development Bank, Washington, D.C., pp. 45-56.

1:'This segmentation in the ADR market in a developing counny environment was first proposed in Edgardo Buscaglia, "Stark picture of justice," The Fi*~ancial Times, March 21, 1995, p. 12; and Buscaglia and Dakolias, s**pra note 7.

~%ee I~brld Competitiveness ~ o r t , supra note 5 at 56; and Buscaglia, supra note 2. 17In more technical terms, in a developing countl T environment without a well-developed ADR system, small firms

and low-income sections of the population possess a smaller elasticity of demand for justice. 18Sma'eys conducted throughout the region show that 94% of small businesses consider ADR mechanisms expensive

E. BUSCAGLIA AND T . ULEN

TABLE 1. Statistical descr ip t ions o f the courts .

279

% Change in median times % Change in backlogs % Change in Clearance rate

Countr.., 1973-1982 1983-1993 1973-1982 1983-1993 1973-1982 1983-1993

Argentina 3.4 (9.1%) '~ 17.8 (11.5%) 9.2 10.9 .5 3.2 Brazil 2.3 (6.1%) 19.1 (12.6%) 2.2 9.7 .7 2.9 Ecuador 4.1 (4.1%) 19.3 (7.8%) 1.5 6.2 -.1 - .3 Chile 8.4 (3.7%) 5.1 (2.7%) 2.1 1.4 - l .1 .7 Colombia 3A (9.1%) 7.8 (10.8%) 9.1 18.1 .2 -3.1 Mexico N/A N/A 7.9 9.1 .3 9.2 Venezuela 3.1 (2.8%) 28.3 (31.1%) 4.8 9.3 .1 -3.1

"Standard deviations are in parentheses.

There is a widespread pe rcep t ion within Latin Amer ican societies that the t ime requ i red by a typical case in cour t is excessive, t9 This pe rcep t ion is shared by most judges , lawyers, litigants, and organizat ions within civil society. Times-to-disposit ion within the Latin Amer ican judic ia l systems are increasing and reaching u n p r e c e d e n t e d propor t ions . 9° For example , the 1993 median times-to-disposition within civil jur isdic- tions in Argent ina , Ecuador, and Venezuela are 2.5, 1.9, and 2.4 years, respectively. 21 These t imes-to-disposition have increased, on average, 85, 73, and 93% since 1981.

Moreover, the variance in the t imes-to-disposition found in these countr ies has also been increasing. The s tandard deviations for Argent ina, Ecuador, and Venezuela are 1.1, 0.9, and 1.9 years, respectively, e2 These figures indicate a t r emendous lack of uniformity in the quality of the services provided by the courts. 9:~

As we show in Table 1 below, each of the countr ies inc luded here has been experiencing u n p r e c e d e n t e d increases in backlogs and times-to-disposition. The char t below compares the percentage of changes in delays and backlogs in a j o i n t assessment of the commercia l and civil jur isdic t ions of selected Latin Amer ican countries. Clearly, the average annual changes in the median times-to-disposition (and their s tandard deviations, as shown in parentheses) confi rm a p r o n o u n c e d de te r iora t ion for the pe r iod 1983 to 1993 c o m p a r e d to the pe r iod 1973 to 1982.

These changes are accompan ied by u n p r e c e d e n t e d increases in the average clear-

and uncertain, whereas 98% of court-users do not trust mediators unless they are proxided by the courLs. This suggests a problem of public trust that still hampers the development of ADR mechanisms. See Buscaglia, supra note 2.

191d" 201d '

ZlThe duration of litigation used here follows the Cappelletti-Clark frame of analysis also known as the "expected duration of the marginal case filed" (EDMCF) approach. In this context, the courts' EDMCF index is .jointly determined by the annual nmnber of cases filed, pending, and disposed (or withdrawn). The Cappelletti Yearly Index used here is calculated by dividing the number of pending cases for each court at the end of each year by the number of cases disposed of during the same year. See John Merry, nan, "Measuring time delay," Stantord University (1977), unpublished manuscript.

~eht. at 47-48. U:~Before one draws any general conclusions, however, the analysis of times-to-disposition must be conducted within

each national legal system separately. This is owing to the sometimes profound diffe'rences in the legal systems, even within Latin America. Another implication of this observation is that an international assessment comparing absolute times-to-disposition across countries would be senseless because of the deep dift;erences between legal systems.


TABLE 2. Average Changes in the Supply and Demand for Court Services: 1990 to 1993

% Change in % Change in filings (t - 1) dispositions t

A r g e n t i n a 7 4.1

Brazil 2.1 7.9

Chile 6.8 9.1

C o l o m b i a 4.9 4.1

E c u a d o r 12.3 1.2

Ve ne z ue l a 19.5 3.3

ance rates in courts across all jur isdic t ions within each of the countr ies analyzed. 24 The numbers shown in Table 1 below seem to justify the publ ic ' s dissatisfaction with the judic ia l systems th roughou t the region. 25

Notwiths tanding these delays, in all the countr ies examined here the productivity of the commercia l and civil courts has increased in the recen t past. (By "productivity" we mean the clearance rate.) To assess this variable measure of cour t productivity, we compare the average percen tage change in disposit ions dur ing pe r iod t to the average percentage change in cour t filings in pe r iod (t - 1)-- i .e . , with a 1-year lag to allow the courts t ime to adjust their supply to the new d e m a n d for their services. 26 The numbers in Table 2 below show that, except for Chile, the average percentage increase in cour t productivi ty dur ing pe r iod t has not been enough to satisfy the average percen tage increases in the d e m a n d for filings in pe r iod (t - 1).

Tables 1 and 2 above also explain why a recen t survey of the region ' s judic ia l systems indica ted that the majori ty of cour t users are "not incl ined" to br ing disputes to cour t because they perceive the system to be slow, uncerta in , and costly, or, in o the r words, of "poor quality. ''27 About 55% of business court-users surveyed in Latin Amer ica said that they prefe r to negot ia te a part ial se t t lement ra ther than to adjudicate a dispute in the formal cour t system. 2s

There are o ther factors that account for the widespread dissatisfaction with the courts. Where there are no specialized or cont inu ing educat ion programs for cour t officers in commercia l , tax, or o ther business-related matters, the judges and clerks are poor ly trained. As a result, j udges must increasingly rely in these commercia l and o the r technical disputes on nonlegal experts. Because Latin Amer ican legal systems allow ex parte communica t ion , part ies can approach judges , and judges can request to see the parties or their lawyers separately. Court-users commonly make accusations that cases

24The "clearance rate" is defined as cases disposed of as a percentage of cases received by a court within a given period of time. A decrease in the clearance rate represents a deterioration in the quality of court services. An increase represents an improvement in the quality of court services. These measures hold, of course, under an "all other things being equal" assumption.

25The raw infol~nlation from which we calculate the numbers presented in Table 2 has been obtained from the annual reports of the Supreme Courts and the Office of Court Statistics of each of the countries included in our analysis. Table 1 expands the series developed in Buscaglia and Dakolias, supra note 5 at 14.

26This 1-year lag correlation was first introduced in Buscaglia and Dakolias, supra note 6 at 15. 27Generally surveys and polls are needed to assess the population's overall confidence in the justice system as a proxy

for the court-users' perception of quality. See Buscaglia, Dakolias, and Ratliff, supra note 7. 28See World Competitiveness Report, supra note 5 at 32.

E. BUSCAGLIA AND T. UEEN 281

are decided in these private meetings, rather than in public view. 29 However, in defense of ex parte contacts, individuals and businesses believe that they must use these informal measures to motivate court personnel , inc luding judges, to process cases that otherwise might lie do rman t for years.

The Relationship Between Judicial Resources and Judicial Efficiency in Latin America

The e n h a n c e m e n t of the capability of the courts to satisfy the demand for dispositions is one of the most chal lenging and impor tant aspects of judicial reform. As we have seen in Table 2 above, almost evelywhere in Latin America courts are unable to supply enough services to satisfy the current demand. The lack of ability to satisfy this demand manifests itself through the increasing backlogs and time delays observed in Table 1. Most observers ascribe these delays to a lack of resources or procedural defects. 3° For example, one often hears that many countries in Latin America provide inadequate budgets to the courts, which impedes the judiciary from sustaining even the minimal needs to ensure the public 's access to justice. 31 Additionally, observers say that inadequate budgets perpetuate the dependence of the judiciary on private, illegal payoffs, and the political process (rather than the financial and other i ndependence that Article I I I judges in the Uni ted States enjoy). Moreover, the critics also assert that the lack of court resources causes corrupt ion among court personnel and prevents the judiciary from attracting well-qualified judges and support staff. ~2 As a corrective, many judges and legal scholars argue that the judic iary must have a separate and larger budget , to be control led , managed , and proposed to the legislature. 3~

Some casual evidence on this point comes from court personnel compensat ion figures. On average, salaries in the judicial sector throughout Latin America remain low by comparison to those in non-profit jobs in the private sector. For example, dur ing the last decade in Ecuador and Venezuela, judges ' real salaries have increased 3-fold, whereas support staffs' real salaries have increased only 54%. The same is true in Argentina, where real salary levels in the federal system remain relatively unattractive. 34

Some countries in Latin America have proposed allotting a prespecified propor t ion of the governments ' budget to the judiciary as a way to address the low-salary problem and as a mechanism to reduce times to disposition and backlogsf ~5 There are, however, impor tan t differences among countries that make a proposal of a specific propor t ion ill advised. Differences in procedural requirements, substantive law, and cultural and legal history mean that the resources needed by courts in commercial jurisdictions to pro- duce a certain type and quantity of services (e.g., 1000 bankruptcy rulings) are likely to vary greatly among countries. This means that, for instance, 3% of the government budget devoted to the judiciary in one country may have a very different impact on times-to-disposition (or other measures of judicial efficiency) than the same amoun t devoted to the courts in another country. Therefore, it is doubtful that a higher fixed

Z%ee Gallup Survey, supra note 6 at 14-16. :~°See Carlos Gregorio, "lnvestigacion sobre la Den, ora en el proceso.judicial: Informe final," La Ley (1993). 31771e CIA World Factbook, Central Intelligence Agency, Washington, D.C. 1994. -~2See World Competitiveness Report, supra note 5 at 34 and 44-46. 33See World Competitiveness Repert, supra note 5 at 11. 34Id. a t 15. 35"Informe del Poder Judicial," Poder Judicial de la Nacion Argentina, Buenos Aires, 1994, p. 34; "Informe de la

Corte Suprema," Poder Judicial del Ecuador, Quito, 1994.


proport ion of the government 's budget would necessarily improve the functioning of the judicial system.

Moreover, there is no clear correlation between judicial resources and judicial efficiency. Countries not suffering from delays and corruption and with a high degree of public satisfaction or confidence in their judiciary (countries such as Denmark, Japan, Germany, the Netherlands, and Norway) tend to devote less of their government 's budget to the judiciary than do Latin American countries such as Argentina, Brazil, and Mexico, which are in the bot tom 20% of the public's confidence. 3G More specifically, governmental spending on the judiciary in countries with a developed judicial system as a percentage of total government spending is as follows: Norway, 0.8%; Netherlands, 0.4%;Japan, 0.5%; Denmark, 1.2%; and Germany, 0.9%. By contrast, judicial spending as a propor t ion of total government spending in those countries with the hea~4est backlogs and longest delays are as follows: Venezuela, 1.3%; Peru, 1.5%; Ecuador, 1.4%; Argentina, 2.2%; and Paraguay, 5.1%. 37

Based on these figures and the times-to-disposition in Table 1, there seems to be no significant direct correlation between judicial efficiency (measured in terms of clearance rates and times-to-disposition) and the percentage of the government budget allocated to the courts. ~s The graph below clearly demonstrates this lack of correlation within Latin America. Along the vertical axis, we measure country-specific average percentage changes in the median times-to-disposition. We measure these figures with a 2-year lag after the average percentage changes in real spending devoted to the judiciary increased in the country. Along the horizontal axis we measure the average percentage changes in real spending devoted to the judiciary in the country. (These measurements are only for the commercial and civil jurisdictions.) The figure shows that countries ~ t h the largest changes in spending are not usually those experiencing the lowest subsequent times-to-disposition of civil and commercial cases. For example, Brazil and Chile are clear examples of this lack of correlation.

The reason for this clear lack of direct correla t ion is that increased judicial resources may ultimately lead to increased workload. Addit ional resources (e.g., for personnel and capital expendi tures) may initially increase cour t productivity and, therefore, reduce backlogs and delay. But after a lag (such as the one we measured, a 2-year lag) a more efficient judiciary attracts addit ional d e m a n d (filings per court) f rom citizens and businesses that had previously been reluctant to use the courts due to delay and backlog. "~'~ This makes it difficult to de te rmine the efficiency conse- quences of add ing or subtract ing judicial resources. In some countr ies the initial productivity increase may domina te the subsequent increase in filings; in others, the subsequent increase in filings may domina te the initial productivity increase. In light o f this mudd i e d relat ionship between resources and judicial efficiency, it is much more sensible to implemen t a budgetary mechanism by which courts can request funds based on projected increases in filings within each subject mat ter and geographical jur isdict ion and on pe r fo rmance indicators.

Given the lack of a strong direct correlation between times-to-disposition and in-

:~%ee World Competitiveness Report, supra note 5 at 12. :~7See Domingo, supra note 2 at 23-24. 3SThis paper expands the initial finding ill Buscaglia and Dakolias (1995) by including additional countries. See

supra note 5 at 20. 39Our numerical results show that, during the first 2 years after significant increases in real spending, filings per

court first increase and later decrease once again.

E. BUSC_:AC, I.1A :~D T. ULEN 283

4 O

3 O

2 0

1 0

0

VENEZUELA.

m m

i I

ARGENTINA. PERU,

*URUGUAY

PANAMA. BRAZIL.

-COLOMBIA .BOLIVIA

• DOMINICAN-RE ,ECUADOR • GUATEMALA *CHILE

I I P E R S O N A L 0 5 1 0 15

FJG. 1. Procedural t imes vs. spending in personal.

creases in judicial resources, we must also consider other factors affecting times-to- disposition, such as the absence of an active case-management style or even an excessive administrative bu rden falling on judges. For example, Page has found that approxi- mately 70% of Argent ine judges ' time is spent on nonadjudicative tasks. 4° The same administrative duties occupy 65 and 69% of available judicial time in Brazil and Peru, respectively. 4~ Excessive administrative requirements do not fall only on judges. Based on recent surveys of the courts in Ecuador, Venezuela, Peru, and Argentina, between 20 and 40% of the court officers interviewed seem to welcome administrative tasks, such as signing checks or requesting office supplies. 4z

III. A Quantitative Analysis of the Efficiency of Commercial Jurisdictions in Argentina and Venezuela

If simply providing more resources to the Latin American courts is not likely to improve their efficiency, what will? To answer that question, we need to have a clearer picture of

4°See Robert Page, Argentina Report, DEA Consulting Group, 1994, unpublished manuscript. 4lid" 4"2id"


the factors that determine judicial efficiency in Latin America. This section focuses on commercial litigation in Argentina and Venezuela to identify some of these additional factors. We first specify a broad spectrum of factors that we think are likely to affect the times-to-disposition (our measure of judicial efficiency), and then we speculate on the likely relationship between each of those factors and judicial efficiency. We next correlate each of these factors with the times to complete each procedural stage of litigation for 190 commercial cases in Argentina and Venezuela. Using nonparametr ic analysis, we identify those factors that are most significant in determining judicial efficiency. This decomposi t ion allows proponents of judicial reform to pinpoint specific procedural stages in litigation that may need to be addressed.

The Scope of the Stud)'

We have analyzed the main procedural stages in selected commercial litigation in Argentina and Venezuela. In each of these two countries we drew a stratified sample of the most common types of commercial cases--bankruptcies, debt collection, and breach of contract. We then computed the procedural times for each stage of those cases: court-preparation, litigants' pretrial discussion, motions, discovery, and sentencing. We next gathered information about court-related and user-related variables that might have affected these procedural times. In all, we interviewed 18judges and 180 court-users.

Efficien O, in the Suppl~ and Demand for Court Services

To pinpoint the factors related to the times-to-disposition (our principal measure of judicial efficiency), we first catalogue the factors that affect the supply of and demand for judicial services. 43 For each of these factors we indicate what the expected effect of that factor is likely to be on the time-to-disposition of a commercial dispute like those in our sample.

We consider the following supply-related variables:

1. real growth in government spending devoted to the judiciary; 2. the increase in the number of courts, judges, and support personnel and in their

work time; 3. the level of case-management uniformity; 4. the technology applied to case tracking and research; 5. judges ' time dedicated to mandatory settlement conferences and judges ' time

allocated to administrative work other than caseflow management ; and 6. the complexity of the case type.

What effects do we anticipate for each of these factors on times-to-disposition? All other things being equal, we should expect a real (not nominal) increase in govern-

4aWe m i g h t have measu red judic ia l efficiency by any of a n u m b e r of statistics: the c learance rate, the n u m b e r of cases dec ided pe r j u d g e , times-to-disposition, sit t ing hours of j u d g e s relative to sentences, and cost-per-case-processed are all

examples of s tandard efficiency measures . Each of these measures has s t rengths and weaknesses. For example , to m e e t a "sustainable" efficiency cr i ter ion in the provis ion of court services, a h igh clearance rate mus t be a c c o m p a n i e d by the

publ ic 's percept ion that they have reasonable access to the conrts. It is possible to f ind cour t systems with very h igh c learance rates that at the same t ime lack the publ ic 's conf idence , and, therefore , provide a low-quality" selwice. O n reflect ion about the s t rengths and weaknesses of each measu re or o f some composi te measure , we have chosen to focus on "t imes to disposit ion" as ou r principal measu re of judic ia l efficiency.

E. BUSCAGLIA AND T. ULEN 285

m e n t capital spend ing on the courts to improve judic ia l efficiency (i.e., to lower t imes-to-disposit ion). Therefore , there should be a negative corre la t ion between increases in real resources available to the courts and times-to-disposition (i.e., a positive re la t ionship between real resources and judic ia l efficiency). Tu rn ing to o the r supply- side factors, we should expect an increase in the n u m b e r of courts and in the n u m b e r of cour t pe rsonne l to lead to a reduc t ion in t imes-to-disposition (i.e., to improve efficiency and to have a negative corre la t ion) ; more uniformity in case-management techniques ought to reduce the times-to-disposition, because the cour t has lowered its administrat ive costs (again, a negative corre la t ion) ; super ior technology (such as the wider availability of computers) should improve the courts ' efficiency because of their grea ter ability to manage the caseload, write opinions, search r epor t ed cases on-line, and the like (a negative corre la t ion) . How judges allocate their t ime will also have an impact on efficiency: if j udges manda te se t t lement conferences (and thereby devote more t ime to them) and if those conferences cause parties to resolve their disputes more expeditiously, then that real locat ion of judic ia l t ime should improve judic ia l efficiency. 44 Similarly, if judges are able to devote more t ime to substantive dispute- resolut ion, ra ther than to the administrat ive tasks of case-flow management , there should be an improvemen t in the efficiency of the courts (i.e., a negative corre la t ion between this increase in the use of judges ' t ime and times-to-disposition). Of the supply-side factors ident i f ied above, the only one whose increase should lead to a decrease in judic ia l efficiency is case complexity. If, all o ther things be ing equal, the cases p resen ted to the courts become more complex, then the times-to-disposition should increase. This is because the pleadings will be more lengthy and requi re more a t tent ion by the courts, the factual matters in dispute will be more numerous and complex and require greater t ime to presen t and evaluate, and the issues of law are likely to be more complicated, requi r ing greater presenta t ion by the parties and greater research by the court.

Turn ing now to the o ther side of the marke t for judic ia l services, we consider the following demand- re la t ed variables:

1. the d i rec t costs of access to the courts (e.g., cour t and a t torney 's fees, and trans- por ta t ion costs);

2. the indi rec t costs (e.g., wages lost); 3. the filings pe r court; 4. the size of the firm li t igating (number of employees) ; 5. the initial d e m a n d as a percentage of the firms' assets; 6. the measure of how much firms are willing to d iscount the amoun t d e m a n d e d in

l i t igation to reach a se t t lement out of court; 7. the size of the law firms involved in the dispute; 8. the propensi ty to litigate (number of previous lit igations within the same case type)

and the filings pe r total popula t ion; and 9. the exper ience of the at torneys involved in the dispute.

What correlat ions should we expect between these factors and judic ia l efficiency? For the first of these factors, the considerat ions about the effects on judic ia l efficiency are

~4Clearly, there is a correlation among some of the variables we have identified as supply-side factors. For instance, the wider availability of computer technology would, all other things being equal, free up judicial time for settlement conferences and for substantive dispute resolution (away from administrative purposes). Also, more real resources might well lead to more computers.

286 Efficiency of the Latin American judicia U

slightly more complex than they were with the supply-side factors. As the first two factors (direct and indirect costs) increase, the d e m a n d for cour t services should fall. First principles do not dictate a clear effect on judic ia l efficiency. On the one hand, the h igher costs of using a cour t to resolve a dispute could cause potent ia l litigants with relatively low-quality disputes to look elsewhere for resolution. If that leaves high-quality cases for resolut ion by the courts, then judic ia l efficiency may improve. On the o the r hand, if the h igher costs of using courts encourages only those litigants with complex or high-stakes disputes to seek judic ia l services, only the most complex cases may be left in court, and, as we have seen above, complex cases cause a reduc t ion in judic ia l efficiency (i.e., an increase in times-to-disposition). Because we do not know which of these effects (or some others) will dominate , we cannot make a clear predic t ion about the effects of these costs factors on judic ia l efficiency.

The pred ic ted re la t ionship between filings per cour t and times-to-disposition is, by comparison, relatively straightforward. As those filings increase, all o ther things be ing equal, the courts should become more congested, and, so , judic ia l efficiency should tall (i.e., there should be a positive corre la t ion between filings pe r cour t and times-to- disposit ion). (Later we shall look at the effect of a closely related factor, the "propensi ty to litigate.")

When the stakes involved in a dispute, measured as a percentage of the firms' assets, are high, there should be a positive corre la t ion with times-to-disposition. The impor- tance of the stakes at issue, relative to the d isputant ' s assets, is a fair measure of how impor t an t the dispute is to the parties, and one could expect that the more impor t an t the dispute is, the more hard-fought the dispute will be, in terms of the t ime and o the r resources devoted to litigation. By contrast, the more willing the disputants are to d iscount the stakes to resolve the dispute, the shor ter the dispute is likely to be. Therefore , we should expect a negative corre la t ion between this willingness and the times-to-disposition.

Two of the final demand-s ide factors deal with the na ture of the lmwers pressing the dispute. Consider, first, the nature of the lawyers, as measured by the size of the law firm and the exper ience of the attorneys. The larger the law firms pressing the disputes, the more complex and, therefore, lengthy the dispute is likely to be. This is because, all o ther things be ing equal, larger law firms are able to b r ing more resources to bear on a dispute, and, as a result, clients with large amounts at stake or with complex matters requi r ing resolut ion are more likely to hire larger firms. ?dl of this means that the larger the firms involved, the greater the t ime-to-disposit ion of a dispute (i.e., there will be a positive corre la t ion between the law-firm size and t ime-to-disposit ion). Turn ing to the exper ience of the at torneys involved, we cannot be sure what the effect on judic ia l efficiency would be. On the one hand, exper i enced attorneys know how to delay resolut ion of a dispute for as long as seems advantageous to their client. A younger , less-experienced a t torney might not have the guile to draw out a dispute. On the o the r hand, an exper ienced a t torney is bet ter able than is a young a t torney to recognize the true merits and o the r d imensions of a dispute and to br ing it to a resolut ion as expedit iously as possible. As a result of these conflict ing tendencies , we canno t be sure what the correla t ion will be between the exper ience of the at torneys involved and the time-to-disposition. Moreover, we must recognize that there will be some complex interact ions between at torney exper ience and some of the o ther demand-s ide factors that we have identif ied.

The final factor whose effect on judic ia l efficiency we shall investigate is the p ropen- sity to lit igate (as measured by the previous amoun t of l i t igation in this area and filings

E. BUSCAGLta AND T. ULEN 287

per capita). As was the case with filings pe r court, when the propensi ty to litigate increases, all o ther things be ing equal, the t imes-to-disposition are likely- to i n c r e a s e - - i.e., the corre la t ion should be positive. The courts will become more congested, reducing judic ia l efficiency. (Ultimately, of course, d e p e n d i n g on what o ther responses there are to this congest ion, there may be an increase in judic ia l resources that leads to a reduc t ion in the times-to-disposition.)

There were some addi t ional factors that we thought probably affected the efficiency of the courts but for which we had only sketchy informat ion, i.e., the availability, and price of alternative dispute-resolut ion m e c h a n i s m s i o r an increase in ne t nat ional income, for which the effect was unclear.

Quantitative Analysis of the l~ctors Related to Procedural Times

We drew a sample of 100 commercia l cases in 'Argentina and 90 in Venezuela for the pe r iod 1989 to 1992. Merely selecting a r andom sample of cases from the ent i re universe of cases from all commercia l courts (i.e., a sample where each case has the same probabi l i ty of be ing drawn) would tend to over-represent the case D'pes with the greatest n u m b e r of filings. We a t tempt to avoid this pitfall by selecting a stratified r andom sample, involving firms as plaintiffs, drawn so as to p roduce a roughly equal n u m b e r of cases for each case type and firm size. 4~

We surveyed 10 commercia l courts in Argen t ina (Federal District) and 9 trial courts in Venezuela (Caracas District). We fur ther classified these courts in terms of whether they had large, medium, and small backlogs. For each court, we selected three types of cases. For each type of case, we stratified our sampling once again in terms of the size of a plaintiff-firm. We also surveyed cour t officials and asked them to c o m m e n t on their exper iences in opera t ing certain p rocedures and to provide estimates of their t ime devoted to administrat ive tasks, their case-management techniques, the technology they used in case handl ing, alternative solutions p roposed to reduce the backlogs, etc. For example , we inc luded questions about court -enforced p rocedures a imed at the control of the pace of discoveD,, or even actions in t ended to simpli~' or l iberalize the mot ions and p lead ing rules, m a n a g e m e n t of cour t resources, and the court ' s capacity to pro- mote sett lements. The informat ion ob ta ined in this sm~,ey reflects the perspective of cour t m a n a g e m e n t personnel , lm~Ters, and litigants. We asked litigants to provide informat ion about the n u m b e r of lawTers in their firms and their caseload per la~Ter, about their direct and indirect costs of litigation, and their willingness or ability to settle.

We then measured the times obsm~'ed for evm T procedura l step for all case types in the selected courts in each country. Finally, we used nonparamet r i c corre la t ion analyses to identify, the s trongest factors associated with the observed times-to-disposition. 46

4:'Following Stone, we classify firms' size within lhe textile and agricultural sectors according to their nmnber of employees. We consider the range 1 to 25 employees to represent a small firm, the range of 26 to 250 employees to represent a medium firm, and the range above 250 employees to represent a large firms. See Andrew Stone, "Measuring transaction costs in the textile indust* T in Argentina, Brazil, and Chile," The World Bank, 1993, unpublished manuscript.

4~;Previous studies have shown that the question of how to reduce time-to-dispositlon is an extremely complex issue. This previous research, however, has been based on aggregate data rather than case-level inlormation. Our study overcomes the limitations that have plagued previous researchers by collecting more extensive and detailed information about the litigation, the case structure, and processing within the courts, and by aualyzing individual cascdevel information through stn~'eys of the conrts and the litigation invoh'ed. For examples of previous studies, seeJulio Gueto Rua, "Los abogados y la congestion en los tribunales," La L U 23-37 (1992); and Corte Suprema de Justicia, Cantidad


Using a nonparametr ic correlation analysis, we examined the strength of the relationship between the supply- and demand-side variables and the average procedural times experienced at each of the stages of litigation. 47 The correlation matrices (Tables 3 and 4) show the strength of the relationships. The sign attached to the relationship shows the expected association. For instance, in Argentina, there is a clear and significant relationship between the filings per court and the total court time devoted to the commercial case (.78). The same is true for the relationship between filings per court and the time devoted to preparing (.83) and discussing (.67) the case. The positive signs of the correlation coefficients attached to the discovery process (.57), motions (.45), and sentencing (.75) also show that as the filings per court increase, the time devoted to each of these stages of litigation also increases.

One can also observe that as the courts devote more resources, especially court personnel, to all phases of the judicial process, the times devoted to each stage decrease within the same year. One cannot, however, observe the same strength in the relationship between capital spending and procedural times. Additional personnel shows a strong inverse correlation ( - .78) at the sentencing level. What is also important to note is that an active and uniform case-management style tends to be correlated with the reduction in the procedural times, especially in relation to motions elevated by the parties and in the preparat ion and the discovery stages. This clearly shows that procedural times are not just associated with an increase in the availability of resources but also with a different use of the previously available resources.

M1 of the significant correlations shown in the matrices display the expected signs. For example, on average, the correlation found between filings per populat ion and total times-to-disposition is significant and strong at .91 in Venezuela (.56 in Argentina's case). However, we may also need to find out if the correlation between filings per population and preparation is also significant--i.e., whether a larger filings per population rate is correlated with longer times devoted to the clerk's preparat ion of a case before being considered by the judge. In both countries commercial courts take more time to prepare the filed cases when congestion increases. The correlations equal .96 in Venezuela and .76 in Argentina. Note also that larger stakes captured by demands / assets tend to pro long the times-to-disposition (.49 and .83 correlations for Argentina and Venezuela, respectively).

A weak or insignificant correlation seems to exist in both countries between filings per populat ion and discussion (judging from the 0.12 result in Venezuela and the 0.23 correlation in Argentina). In other words, the congestion in this case would not affect the time devoted by the parties to the pretrial discussion stage. 48

We turn next to the association between increases in spending devoted to personnel

de Expedientes Tramitados en los Fueros de la Capital Federal y Jurisdicciones Federales del Interior (1991 ). See also Gregor , supra note 35.

47We used the rank-based n o n p a r a m e t r i c Spea rman index. A correla t ion coeff ic ient is always between - 1 and + 1.

A correla t ion coeff icient o f + 1 m e a n s that all o f the data are perfectly positively (directly) correlated. A correlat ion coeff icient o f - 1 m e a n s that all o f the data points are perfectly negat ive (inversely) correlated. I f the correla t ion coeff icient is close to 0, t hen there is no re la t ionship between the variables. In our case, each correla t ion can be s ignif icant o r insignif icant at a 5% conf idence level. In the charts i f a correla t ion is a ccompan ied by the symbol "(1)," then this means that there is m o r e than a 95% chance of a zero correla t ion for the populat ion.

4SWe fu r the r p robed this claim that there is no correla t ion between filings pe r popula t ion and pretr ia l discussion by us ing the t-distribution to compu te the l ikel ihood of a zero correlat ion. We found that there is a v e r y h igh l ikel ihood

of no corre la t ion 's existing. T h a t is, in both countr ies a m o r e conges ted cour t is no t likely to exper i ence a l onge r pretr ial discussion stage.

E. BUSCAGLIA AND T. ULEN

TABI.E 3. Commercial courts: Argentina (100 commercial cases)

289

Total time Preparation Discussion Motions Discovery Sentence

Supply side Time of administrative procedure .75 .88 .00 (I) .09 (I) .61 .45 Total spending resources -.36 .24 (I) - .15 (I) - .02 (I) - .56 - .10 (I) Spending capital -.11 (I) - .26 - .00 -.01 (I) - .12 (I) - .33 Spending court personnel -.45 - .57 - .34 -.03 (I) - .56 -.78 Case management -.89 -.68 -.29 - .79 - .68 -.45 Time dedicated to ADR a -.58 -.45 - .50 -.05 (I) - .07 (1) - .05 (I) Judge active intervention - .38 - .90 -.07 (I) - .39 -.38 -.67 Computer system -.78 - .95 - .56 - .34 - .67 -.81 Case complexity" .76 .44 .51 .59 .89 .92

Demand side Direct costs - .34 .16 (I) - .35 .02 -.67 .18 (I) Filing per court .78 .83 .67 .45 .57 .75 Indirect costs .28 (1) .29 (I) .38 .45 .29 (I) .18 (I) Demand/assets .49 .36 .79 .27 .35 .35 Firms' size -.55 .07 (I) - .39 .17 (I) - .78 .02 (I) Willingness to discount - .39 - .56 -.13 (I) - .16 (I) - .37 -.29 Size of law firm .08 .06 (I) -.01 (I) .07 (I) - .06 (I) - .03 (I) No. of complaints .04 (I) .02 (I) .07 (I) .08 (I) - .05 (I) - .04 (I) Cases per attorney -.12 (I) - .16 (I) - .18 (I) - .24 - .04 (I) .03 (I) Attorney experience .39 .13 (I) .56 .57 .25 (I) .39 Filings/population .56 .76 .23 (I) .11 (I) .89 .72

~'ADR, for purposes of Tables 3 and 4, refers to arbitration, conciliation, and mediation.

and p r o c e d u r a l t imes, H e r e the co r r e l a t i on is weaker than the prev ious o n e b u t is significant . Negat ive cor re la t ions equa l to - 0 . 4 5 in A r g e n t i n a and - 0 . 2 8 in V e n e z u e l a con f i rm the inverse r e l a t ionsh ip b e t w e e n real s p e n d i n g on p e r s o n n e l a n d total t ime- to-disposi t ion wi th in the same year.

We also f ind tha t t he re is a s igni f icant inverse co r r e l a t i on b e t w e e n a l a rger plaintiff- f i rm a n d the t imes- to-disposi t ion. These cor re la t ions are - . 5 5 in A r g e n t i n a - . 4 9 in Venezue la .

As expec t ed , we also see tha t case complex i ty and the use o f c o m p u t e r s have the p r e d i c t e d associa t ion with the t imes- to-disposi t ion obse rved at all stages in b o t h countries. We asked j u d g e s o r clerks to rank the complex i ty o f the i r c o m m e r c i a l cases in t e rms of the r e q u i r e d in t e r ac t ion with part ies , the t echn ica l k n o w l e d g e r equ i r ed , a n d the e x t e n t o f the discovery process. We asked t h e m to rank complex i ty on a 1-to-10 scale, w h e r e "1" m e a n s "s imple" a n d "10" m e a n s "ex t r eme ly complex . " We t h e n com- p u t e d the co r r e l a t i on b e t w e e n these rankings and the t imes obse rved at each p roce - dura l stage. Even t h o u g h we observe a s ignif icant a n d posi t ive co r r e l a t i on all across the b o a r d (as e x p e c t e d ) , we also f ind that the s t ronges t posit ive cor re la t ions exist at the discovery a n d s e n t e n c i n g stages, w h e r e the complex i ty o f the cases d e m a n d add i t iona l t ime f r o m cou r t pe r sonne l .

Finally, we sough t to f ind a co r r e l a t i on b e t w e e n the t e c h n o l o g y available to the c o u r t a n d the p r o c e d u r a l t imes in the d i f f e ren t phases o f l i t igat ion. ( C o m p u t e r t e c h n o l o g y is of ten useful as a m e t h o d o f c o m p i l i n g a da tabase o f cases o r in s ea rch ing for cases on point , in i m p l e m e n t i n g a case- t racking system, a n d as a w o r d processor . ) In o u r sample ,


TABLE 4. Commercial courts: Venezuela (90 commercial cases)

7btal time Preparation Discussion Motions Discovery Sentence

Supply side Time administrative procedure .41 .81 .06 (1) .02 (I) .59 .78 Total spending resources -.45 - .19 (I) - .78 -.32 -.42 -.18 (I) Spending capital -.01 (l) .06 (I) - .00 (1) .01 (I) - .02 (I) - .15 (I) Spending court personnel - .28 - .27 - .28 .33 (I) - .26 - .55 Case management - .29 -.18 (I) - .59 - .06 (I) .01 (I) - .29 Time dedicated to ADR -.00 (I) - .00 (l) - .50 (I) - .05 (1) .00 (I) - .69 Judge active intervention -.11 (I) - .03 (I) - .27 -.01 (I) .18 (I) - .76 Computer system -.48 -.15 (1) -.17 (I) -.21 (I) .67 - .92 Case complexity .86 .49 .51 .19 (I) .96 .69

Demand side Direct costs - .29 .18 (I) - .77 -.52 -.88 -.01 (I) Filing per court - .29 .18 (I) .77 - .52 - .88 -.01 (I) Indirect costs - .18 (I) .13 (I) - .73 -.59 .71 - .02 (I) Demand/firms' assets .83 .04 (I) .99 .82 .58 .49 Firms' size -.49 .01 (1) -.62 - .66 .01 (I) .09 (I) Willingness to discount .69 .00 (*I) .92 -.38 -.72 -.03 (I) Size of law firm .88 .06 (I) .01 (I) .89 - .02 (I) .03 (I) No. of complaints .00 (I) .07 (I) .11 (I) .29 -.01 (1) -.12 (I) Cases/attorney -.42 .00 (I) - .78 .31 .00 (I) .05 (I) Attorney experience .31 .00 (I) .34 .29 .15 (I) .09 (I) Filings/population .91 .96 .12 (I) .11 (I) .89 .46

45% o f the cour ts chosen for this study used c o m p u t e r t e chno logy bu t only for word process ing. Even so, the use o f c o m p u t e r t e c h n o l o g y in the supply o f c o u r t ser~ices clearly showed a s ignif icant nega t ive associat ion with t imes-to-disposi t ion. Moreove r , we see that the s t ronges t associat ion occurs at the s e n t e n c i n g stage, where the use o f word processors has acce l e ra t ed the process o f wri t ing op in ions . In s o m e cour t s c o m p u t e r s lead to a 3-fold increase in s e n t e n c i n g product ivi ty.

IV. Conclusion

This study provides the first quant i ta t ive analysis o f cour ts wi th in the Lat in A m e r i c a n region. T h e first par t o f this s tudy clearly shows tha t t imes- to-disposi t ion have b e e n inc reas ing at an u n p r e c e d e n t e d rate s ince 1990 t h r o u g h o u t the region. T h e m a i n increases in the t imes- to-disposi t ion seem to be c o n c e n t r a t e d wi th in the discovery stage. This suggests the n e e d to e n f o r c e p r o c e d u r a l dead l ines d u r i n g the discovery process whe re unjus t i f ied m o t i o n s are c o m m o n as a s t rategic tool in l i t igat ion.

It is i m p o r t a n t to stress that the d e t e r i o r a t i o n in the qua l i~ ' o f cou r t services has o c c u r r e d d u r i n g a t ime when, in mos t legal ju r i sd ic t ions , cour ts have inc reased the i r product iv i ty at an inc reas ing rate. These increases, however , have n o t b e e n e n o u g h to m a t c h the inc reas ing d e m a n d m e a s u r e d in te rms of the p e r c e n t a g e changes in cou r t filings. This also suggests that a l t hough cour ts have b e e n responsive to the increases in the d e m a n d for cou r t services, they have n o t b e e n able to "catch up" a n d o v e r c o m e the increases in filings. As a result , p e n d i n g cases have inc reased at an u n p r e c e d e n t e d rate. As a so lu t ion to this p r o b l e m , the jud ic i a ry may a d o p t a m o r e proact ive, and n o t reactive, a p p r o a c h by fo recas t ing the d e m a n d for cou r t services to avoid u n e x p e c t e d

E. BUSCAGLIA AND T. ULEN 291

increases in filings and times-to-disposition. Based on our jurimetric analysis showing the links between times-to-disposition and the supply- and demand-related variables shown in Section II, further increases in time productivity can be accomplished through the creation of additional courts, improvements in case-management techniques, and a uniform, less time-consuming, and more centralized administrative approach. An impor tant conclusion from our analysis is that increases in judicial resources have no significant effect on reducing times-to-disposition, measured with a 2-year lag. Put dramatically, "throwing money" at the problem of judicial inefficiency in Latin America is not likely to work.

It is also interesting to observe that all the supply- and demand-related variables we examined affected the times-to-disposition in commercial jurisdictions in precisely the ways expected. This is the most important conclusion derived from the nonparametr ic analysis of Section II. More specifically, uniform administrative procedures, improvements in case management , the wider availability of computer technology for application in case management , and the size of plaintiff-firms are all factors that are strongly and positively associated with the times-to-disposition observed in commercial litigation in Argentina and Venezuela.

a quantitative assessment of the efficiency of the judicial sector in latin america

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