1 The Role of Justice in Development: Empirical Evidence 3 The institutionalist definition of the rule of law focuses on property rights and the efficient administration of justice. This mainly includes laws and regulations, the police, and the judiciary. Each of these institutions is under the control of different branches of government: laws are developed by the legislative branch, the police are controlled by the executive branch, and the judiciary is, in principle, independent. In this paper, we specifically focus on the judiciary. The judicial branch may include both formal and informal institutions that aim to resolve conflicts among citizens, or between citizens, corporations and/or the state.

The lack of high-frequency data is no longer an issue for many judiciaries. Recent years have seen an increase in the availability of data in judicial systems around the world. Many countries have developed electronic case management and e-filing systems. This has led to the creation of massive databases that track every characteristic of each case. In fact, this is by definition a characteristic of the fair administration of justice: everything that happens in a case needs to be tracked to prove the evidence behind fact-based decisions. Even though this data is readily available to policy makers, it has rarely been exploited to evaluate policies or improve the functioning of the judiciary. In other words, courts have become data-rich but information-poor.

In the era of big data, the data revolution opens an immense range of opportunities. These opportunities should be used by policy makers and researchers to understand how to improve the access, quality and efficiency of justice. We examine specific ways in which data has been used, or could be used, by government officials and researchers to make more progress in responding to the “small, concrete questions” that currently dominate the field of development economics. By providing responses to these questions, we will be able to rigorously evaluate the impact of rule of law institutions on the prosperity of developing nations in future years.

In this paper, we divide our review into three parts. Part 1 studies the empirical evidence evaluating the impact of justice on development outcomes. Our review focuses on the impact on poverty reduction and firm growth, the prevention of conflict and violence, as well as on the prevalence of corruption and citizens’ trust in institutions. Part 2 discusses the importance of the data revolution in justice. We focus on the potential for judicial administrative and text data to improve the functioning of judicial institutions throughout the world, particularly in developing countries. We argue that the increase in data availability in judiciaries globally, especially since many have been compelled to transition to data-driven systems in light of the COVID-19 pandemic, has the potential to bring the rule of law back to center stage in the development agenda. Part 3 explores new avenues for future research as well as directions for policy makers to leverage the ongoing expansion of data and e-justice solutions in order to address some of today’s most pressing needs.

# **1 The Role of Justice in Development: Empirical Evidence**

In this section we review the empirical evidence that evaluates to what extent justice matters for development outcomes. Specifically, we focus on three main aspects of development: economic growth, conflict and violence, and trust in institutions.

Overall, empirical evidence shows that the judiciary matters–not only for its intrinsic value, but also for its impact on development outcomes. A more efficient judiciary promotes economic growth through better enforcement of contracts and more secure property rights, while also leading to healthier business environments. The judicial system can incentivize entrepreneurship, have a positive effect on firms’ outcomes and growth, and even affect the output of other industries that heavily rely on contracting. A more effective judiciary may also contribute to reducing violence, by creating a deterrent effect on criminal acts and increasing citizens’ trust in the quality of institutions. Formal institutions can protect vulnerable populations in contexts where customary laws are biased against them, as well as reduce violent resolution of disputes through alternative dispute resolution