1 The Role of Justice in Development: Empirical Evidence 16 all legal systems, especially in civil law and developing countries. Contrary to the view that heavily regulated adjudications ensure fairness, strong formalism is correlated with longer proceedings, less consistent and fair decisions, and greater corruption.

The rise of technology also produces repercussions in the promotion of political and corporate accountability. Social media holds great promise as a tool for detecting and preventing corruption. Enikolopov, Petrova, and Sonin (2018)’s research on the Russian Federation provides a snapshot of how news media disciplines private-sector wrongdoing. Blog posts exposing corrupt practices in state-controlled firms not only caused a decrease in these firms’ market returns, they are also associated with higher management turnover and lower minority stakeholder conflicts.

Another way to combat corruption is improving the governance of social services (Reinikka and Svensson, 2005). In Uganda, public funds were often captured by local officials. After introducing a newspaper campaign exposing this practice, schools in areas with higher newspaper penetration received more funds and were able to allocate them to nonwage items such as textbooks, meals, or uniforms. This in turn caused an increase in enrollment and test scores of students.

In sum, regulatory systems provide powerful antidotes for countries and industries caught in the grip of corruption. However, although unregulated systems frequently fall prey to bribery and corruption, not all regulations are productive. Amirapu and Gechter (2017) discuss one mechanism through which excessive labor regulations worsen economic outcomes and increase corruption. Burdened by higher regulatory costs, Indian firms in intensely regulated industries actually experience worse levels of corruption. One explanation is that inspectors—the primary task force for enforcing labor regulations in India—are threatening firms by overreporting violations to extract more bribes.

# **E↵ects of Justice on Trust and Corruption**

Wielding the power of judicial review, courts in modern democracies represent another key component in the system of checks and balances. The integrity of the judiciary is fundamental to the delivery of justice, citizens’ well-being, and a nation’s stability. Thus, enhancing citizens’ trust in judicial institutions is a potential way to ensure other civil and political processes run smoothly. Empirical evidence in fact shows the role of the judiciary to enhance trust in formal institutions, as well as its association with lower crime and democracy promotion.

Pakistani state courts improved citizens’ trust in the state. Citizens reported higher willingness to use state courts, greater trust in them, and larger allocations of funds to these courts. Choi (2010) offers suggestive evidence on courts’ influence on crime reduction and democracy promotion. From 1984 to 2004, his survey of 131 countries indicates that impartial judicial systems are consistently better equipped to redress the grievances of citizens, cultivating a perception of legitimacy and lessening their tendency to turn to terrorist activities.

In a study based on judicial data from the EU Justice Scoreboard, Gutmann and Voigt (2017) found that citizens’ perception of judicial independence at the national level is negatively associated with the presence of formal legislation considered conducive to judicial independence. The authors suggest that this puzzle is explained by cultural traits: countries with high levels of generalized trust (and to a lesser extent individualistic countries) show increased levels of de facto judicial independence, while also having reduced levels of de jure judicial independence.

On the contrary, previous studies, mostly from India and Pakistan, demonstrate how corruption affects judicial decision-making in favor of the executive.

In India, Aney, Dam, and Ko (2017) study whether judges respond to incentives by ruling in favor of the government in the hope of receiving jobs after retiring from the court. They find that