The impact of the judiciary on entrepreneurship: Evaluation of Pakistan's “Access to Justice Programme”

In 2002, the Pakistani government implemented a judicial reform that cost $350 million or 0.1% of Pakistan's 2002 GDP. This reform did not involve increased incentives for judges to improve efficiency but merely provided them with more training. Nonetheless, the reform had dramatic effects on judicial efficiency and consequently on entrepreneurship: judges disposed of a quarter more cases and entry rate of new firms increased by half due to the reform. Using data from the World Bank Group Entrepreneurship Database, our estimates suggest that this translates into an increase of Pakistan's GDP by 0.5%.