Bakhtawar Ali, Sultan Mehmood, 2024, The Economic Journal, Volume 134, Issue 659, pp 1287–1301.
»
We find that allocation of houses to judges in Pakistan increases pro-government rulings
and reduces the number of decisions made on the merits of a case.
RESEARCH QUESTION
Judicial independence is a foundational pillar of governance. It serves as a critical check on government authority, a concept articulated in Enlightenment thought and subsequent works on institutional design. The independence of the judiciary is a defining feature that sets it apart from the bureaucracy and legislature, both of which are accountable to the executive to varying degrees.
Autonomous operation is essential for the judiciary, providing a crucial check on the powers of other government branches and safeguarding individual rights and the rule of law. Judicial partiality therefore has profound implications, compromising the judiciary’s role as the guardian of citizens’ rights and diminishing its capacity to shield citizens from unjust expropriation of their rights and property. Such erosion of judicial authority disproportionately affects the most vulnerable in society, undermining trust in the legal system and jeopardising the very foundation of democratic governance. Meanwhile, the autonomy of the judiciary is pivotal in guaranteeing that justice is accessible to all, particularly the impoverished, who are frequently the most exposed to power abuses and who do not have sufficient resources to defend their rights.
Recent evidence, however, indicates a disturbing global trend: judiciaries, even in long-standing democracies, are increasingly abdicating this essential function and often surrendering to the executive’s influence. This shift has far-reaching implications, undermining the process of accountability, which eventually hampers economic development and enables authoritarian or populist tendencies to take root. Key questions arise: How do governments erode judicial independence, and through what institutional channels is this erosion perpetuated?
PAPER’S CONTRIBUTIONS
This research makes contributions to the literature This research contributes to the literature by presenting quasi-experimental evidence of how a government’s granting favors to the judiciary affects pro-government rulings and decision quality. It does so through a unique natural experiment: the staggered allocation of real estate to judges in Pakistan under the federal government’s «Prime Minister’s Assistance Package.» By combining case-level micro data on judicial decisions and real estate allocations in a generalized differencein-differences empirical strategy, we are able to examine the complete transactional relationship between judiciary and government, including the transfer of real estate from the federal government to judges and the awarding of pro-government rulings by judges. We find that allocation of houses to judges in Pakistan increases pro-government rulings and reduces the number of decisions made on the merits of a case. The evidence suggests that all cases where the federal government’s allocation of real estate is “repaid” by pro-government rulings involve the federal government establishing a straightforward two-way – quid pro quo – transaction. Such transactions lie at the heart of patronage arrangements, since house allocation goes through the federal government and must be “approved” by the Prime Minister.
This study contributes to the literature on institutional integrity, state capacity, and the political economy of corruption by providing robust evidence of how informal exchanges compromise judicial impartiality. It raises important questions about the conditions under which judiciaryexecutive relationships can remain independent and underscores the need for systemic reforms to prevent informal patronage practices.
FUTURE RESEARCH
This study on capture of the judiciary opens several promising avenues for future research that can enrich the literature on judicial independence, governance, and institutional design.
Protection from Judicial capture
Future research could examine how institutional features—such as appointment processes, tenure protections, and judges’ remuneration structures — affect susceptibility to executive influence both in the short and in the long run.
Weaponization of Judicial Systems
It would be valuable to explore how the judiciary can be manipulated for the persecution of political rivals and the entrenchment of power by the incumbent rulers.
Figure: Time-varying impact of house allocation on pro-government rulings
Note: This figure overlays the event-study plots constructed using four different estimators: a dynamic version of the TWFE model, (2), estimated using OLS (with triangle markers); Sun and Abraham (2021) (with diamond markers); Callaway and Sant’Anna (2021) (with cross markers); and Borusyak et al. (2021) (with plus markers). The bars represent 95% confidence intervals with SEs clustered at the judge level.
→ This article was issued in AMSE Newletter, Winter 2024.
