Economic growth and judicial independence, a dozen years on: Cross-country evidence using an updated Set of indicators

- We introduce new objective indicators of de jure and de facto judicial independence (JI).
- De jure JI does not have a significant influence on growth, whereas de facto JI does.
- Improvements in de facto judicial independence are associated with higher growth.
- The growth-enhancing effect of de facto JI is independent of a country's income.

Over 10 years ago, Feld and Voigt (2003) introduced an indicator for objectively measuring the actual independence of the judiciary and demonstrated its utility in a large cross-section of countries. The indicator has been widely used, but also criticized. Many new indicators for judicial independence have been developed since. Yet, all of them are based on subjective evaluations by experts or confined to measuring the legally prescribed level of independence. This paper presents more recent objective data on de jure and de facto judicial independence (JI) and strongly confirms previous results that de jure JI is not systematically related to economic growth, whereas de facto JI is highly significantly and robustly correlated with growth. In addition, we show that the effect of de facto JI depends on the institutional environment, but not on a country's initial per capita income.