The judicial system and economic development across EU Member States

This analysis presents a number of correlations between EU Member States (MS) judicial systems and indicators of firm performance. To measure the functioning of the justice systems, we use indicators of efficiency, quality and independence. To measure economic development, business statistics such as value added, turnover, value added per worker and the number of enterprises are employed. Results show some strong correlations between the length of court proceedings - a proxy for efficiency of the justice system - and MS firm performance. At the same time, however, the correlations between economic performances and some of the available measures capturing more complex facets of an effective justice system, namely quality and independence, are less pronounced and robust. Policy implications should be drawn with caution due to the small sample size and the short time period available. Moreover, although our findings reveal interesting relations, the evidence is best described as descriptive rather than causal.