A vast literature that it would be too long to cite extensively shows that self-governance has worked and still works. The very same literature also shows that self-organization does not imply the absence of conflicts. Much to the contrary: even if human beings are able to self-organize peacefully – or, as peacefully as possible – conflicts are constantly present among human beings and they call for a solution in a way or another. The simplest and most widely employed method still used to resolve disputes is violence, but it presents the dangerous side effect of being very often unpredictable in terms of results. What is more, it increases the risk of escalation, which in turn breeds more conflict in a circle that is particularly vicious. Converging toward an equilibrium – what could be called an equilibrium of violence – is not infrequent but nonetheless produces suboptimal outcomes. This state of uncertainty is not very much welcome neither for society nor for trade and markets. It is more efficient to employ dispute resolution mechanisms or adjudication systems that avoid violence to stop conflicts in order to foster peaceful human interaction and the ancillary activities that takes in human group, including the economic ones. Thus, whatever the form it may take, any adjudication system must solve conflicts by fostering order and peace in the society.

It is therefore not a surprise if we find a ubiquitous emergence of institutions devoted to resolve disputes. Albeit they may differ and present idiosyncratic features according the historical path or local contingencies, they are present everywhere among human groups. Hence while the “technology” used by the adjudication institution can show very specific arrangements – e.g. being a public or a private system,Footnote ¹ using mediation or conciliation rather than litigation, relying upon professional judges or temporarily appointed judges and much more – the first statistical remark is that, in every culture, such institutions exist.Footnote ²

To give but a few examples, one may cite the case of ancient Greece, where law and justice were essentially seen as devices for keeping order and peace in each state (Chroust, Reference Chroust1946). Then, since very often the relationships – especially economic ones – involved two or more Greek city-states, many laws and their enforcement mechanisms converged to preserve order everywhere according to a principle that today we would call “harmonization.”Footnote ³ This was true especially in those sectors concerning the strict interplay among states, like contracts and commerce (Gagarin and Cohen, Reference Gagarin and Cohen2005). Later, and in a totally different setting and in a different form, adjudication institutions were also found to exist in Genghis Khan's Mongolia, where strict enforcement of the Yassa law was aimed at eliminating social and economic conflict among Mongols to allow them to direct their energies to their main business, that is to say, to conquer the world (Vernadksy, Reference Vernadsky1938). The case of medieval Icelandic society (Friedman, Reference Friedman1979; see also Solvasson, Reference Solvasson1993) could also be cited as well as that of the Maghribi traders (Greif Reference Greif1989, Reference Greif1993), the American West in the 19th century (Anderson and Hill Reference Anderson and Hill1977), pirates (Leeson Reference Leeson2009, Reference Leeson2014), and prison gangs (Leeson and Skarbek, Reference Leeson and Skarbek2010; Skarbek, Reference Skarbek2014; Sobel and Osoba, Reference Sobel and Osoba2009). And the list could be easily extended.

The role of these institutions is so important that whenever a legitimate institution – or, at least, one that is official and backed by the state – fails for any reason to reach an acceptable output, it often happens that individuals internalize the failure and see an alternative, parallel dispute resolution system emerging. Again, many examples could be given. A well-known case is the much studied Cosa Nostra, the Sicilian Mafia, which seems to be explainable on one hand by the intense process of land redistribution that took place in Italy after the reunification in 1860 in the boosted trade and commerce, and on the other hand by the dramatic increase in demand for dispute resolution about contracts and property and for protection that the newly created Italian government was unable to provide (Gambetta, Reference Gambetta1993). Another most stunning case has been observed in Liberia, where the traditional criminal trial system using a very old judicial technology, the ordeal, and relying upon poison ingestion, has taken over the legitimate criminal justice system. Not that formal criminal justice institutions did not exist in this country. But, as Pete Leeson and Christopher Coyne explain and document, an inability to satisfy the basic conditions that make a criminal judicial system effective – that is to say, accessibility, creating incentives for judicial administrators to pursue justice and not private ends and generating sensible information about accused persons’ guilt or innocence – results in what some would define as a barbarian institution being a better alternative than the modern institution (Leeson and Coyne, Reference Leeson and Coyne2012).

The previous examples are certainly extreme cases. Yet even in less dramatic situations, we can see the consequences of ineffective judicial systems either in term of use alternative institutions, formal or informal, or in terms of changes in the parties’ behaviors. The pattern is somehow the same: when legal institutions are weak, other informal institutions can substitute for courts or new behaviors emerge in order to countervail these weaknesses. This is the case observed in post-communist transition economies in which the relational contracts remained the core of negotiation between parties when the judicial system and its pivotal element, judges, are unable to show their reliability (Johnson et al., Reference Johnson, McMillan and Woodruff2002).

In this respect, obviously, adjudication institutions are not looked for only to guarantee peaceful interactions. What is important is that they are also – accordingly – able to foster economic activities and economic efficiency. Or, to put it in a reverse order, the ineffective working of these institutions may severely impact the market structure and affect the functioning of the economy.

Again, we can give only a few examples. The incredible length of bankruptcy trials in Italy – which can last up to 24.5 years – significantly alters the entry and exit of firms, with the consequence that zombie firms remain in the market beyond any reasonable term only for avoiding the costs associated with the uncertainty (Melcarne and Ramello, Reference Melcarne and Ramello2018). Additional evidence is provided by the study of financial markets. Thus, weak contract enforcement caused by an ineffective judiciary works like a tax on borrowing and determines a higher debt relative to assets (Arellano et al., Reference Arellano, Bai and Zhang2007). By the same token, strong contract enforcement acts like a subsidy on borrowing, which enables all firms to issue more debt and, likewise, expands the loans availability for small firms. The implication is that, where contract enforcement is weaker, newcomers (generally small firms) experience more difficulties. On the whole, hence, financial constraints arising because of a limited enforceability of contracts are important for explaining firms’ characteristics and once more market structure (Cooley et al. Reference Cooley, Marimon and Quadrin2009). In the same vein other researches have shown how the length of the judicial procedure inversely affects the availability of credit and its price, that is to say the interest rate charged on debtors (Mora-Sanguinetti et al., Reference Mora-Sanguinetti, Martinez-Matute and Garcia-Posada2017; Visaria, Reference Visaria2009).

The list can be further expanded. However despite the glimpses given by the studies cited, a quite limited empirical literature exists focusing on judicial institutions, their technology and its impact on the economic systems. Although many supranational institutions such as the World Bank or the European Commission (via the Council of Europe's European Commission for the Efficiency of Justice, CEPEJ) strongly believe upon the role of judicial system in fostering economic growth, there is a substantial lack of evidence supporting the theoretical claims and functional to draw robust policy implications. In these respect, sometime the trivial conclusion of simply throwing some more judges into the system as a blank cheque for fostering judicial productivity or for solving courts' congestion witnesses the scant knowledge on judicial systems, on what is in its black box and what are its inner relationship with the adjudication system with the other institutions (for a critical viewpoint see Ippoliti and Ramello, Reference Ippoliti and Ramello2018). In most of cases today the judiciary or better its performance enters empirical studies as a right-hand variable, without a great knowledge of what the variable used means. This once more calls for a deeper understanding of dispute resolution institutions, their working and their interplay with the other institutions. This result cannot be reached without an extensive empirical analysis.

In this vein, this special issue tries to further advance the knowledge on the working of judicial systems along the lines highlighted by Stefan Voigt (Reference Voigt2013), on how to measure its performance and how evaluate it impact on the economy or the society, by expanding the current boundaries of the empirical evidence thanks to a peer-reviewed selection of research presented at the Third International Workshop on Economic Analysis of Litigation, held at the University of Montpellier and submitted to this journal. Ideally the pool of papers touches some of the major topics of the research concerning adjudication.

The first article in this special issue, written by Giuseppe Di Vita, Fabio Di Vita and Gianluca Cafiso (Reference Di Vita, Di Vita and Cafiso2017), is entitled “The Economic Impact of Legislation and Litigation on Growth: A Historical Analysis of Italy from its Unification to World War II.” It deals with the basic setting in which a judicial system is embedded, that is to say the legislation, and tries to capture the impact of legislation on the economy and on litigation. By means of a historical case study, the unification of the Kingdom of Italy, the authors test the largely held hypothesis of the positive relationship between an effective legislation and economic growth, according to the idea that that the process of legislative harmonization intrinsic to the unification had a positive effect on the Italian GDP because legislative uniformity facilitates economic transactions. Moreover a uniform and more effective legislation would have caused less litigation and therefore favored economic growth, thanks to smoother relations between economic agents.

The second paper – “The Economic Importance of Judicial Institutions, Their Performance and the Proper Way to Measure Them,” by Alain Marciano, Alessandro Melcarne, and Giovanni B. Ramello (Reference Marciano, Melcarne and Ramello2018) pushes forward the methodological discussion dealing with a key although so far not extensively discussed issue of empirical researches on justice, that is to say how to measure the judicial performance and what is embedded in the main indices currently used. The originality of the paper is that it discusses a distinction between two measures of judicial performance – efficiency and effectiveness – that has frequently been confused in the literature. The paper shows how distinguishing these two dimensions is crucial to avoiding mistakes occurring when policy-makers try to improve judicial performance by relying upon the wrong index. Indeed, it appears that measures of judicial efficiency is not necessarily be positively (and significantly) correlated with indicators of judicial effectiveness. Nor that there exists significant correlation among different metrics of the latter dimension of judicial performance: efficient judiciaries might be slow, just as fast courts might be highly inefficient.

An analysis of these differences opens the way to introducing the open issue of the relation between quantity and quality of the judicial performance, which is also at the core of the subsequent paper “Bias, Insecurity and the Level of Trust in the Judiciary” by Luciana Yeung (Reference Yeung2018). The latter starts with a provocative question – are judges biased in their decisions? The implication is that biases in favor of certain categories of individuals may create uncertainties and instability and be detrimental to efficiency and fairness. This implies that judges could be efficient – in quantitative terms – but of poor quality because of these biases. To answer the question, Yeung enters the black box of one branch of the Brazilian Supreme Court. In particular, the study tries to capture how judicial decision making takes place and more precisely whether there are characteristics of the litigation or of the litigants that make judges more prone to favor debtors or creditors in judicial conflicts related to breach of contracts involving commercial debts.

The fourth paper – “Determinants of In-court Settlements: Empirical Evidence from a German Trial Court,” by Michael Berlemann and Robin Christmann (Reference Berlemann and Christmann2018) – conducts a research on a hand-collected dataset of 860 case records from a German trial court with similar aims to the previous study: trying to understand how institutional factors – oral procedures, length and number of hearings and (non-)appealability of a case on settlements – and judges’ skills affect the probability of in-court settlements. It is then shown that the settlement probability in civil law litigation is strictly depending on these two sets of factors. In particular, having a PhD is important. Gender effects in arranging in-trial settlement are also evidenced. Even if the authors warn us that one should be cautious in generalizing their results, one must nonetheless admit that no consistent policy aimed at enhancing settlement or judicial performance can be done by simply amending the rule of law without taking into account human factors and the working of the judicial technology.

Finally, in the last paper – “What Makes Prosecutors Independent? Analyzing the Determinants of the Independence of Prosecutors” – Stefan Voigt and Alexander Wulf (Reference Voigt and Wulf2017) move a further step in the same direction of deepening the knowledge of the inner working of the judicial technology by shedding light on the pivotal players in criminal justice “value chain”: prosecutors.Footnote ⁴ As the authors note, surprisingly little is known about prosecutors. Indeed, most studies focus on judges. However, in most of criminal justice systems, their role is central – the authors even note that they are the most powerful actors in a country's criminal justice system. Prosecutors are agenda-setters for judges and they formulate charges, they conduct the prosecution, they argue the case in court and they may appeal if they disagree with the court's decision. This paper first insists on the importance of the independence of prosecutors from the other branches of government, and then identifies and discusses the elements that guarantee or contribute to this independence. These are: press freedom, the immunity of parliamentarians and being in a country belonging to the common law tradition.

As with the last paper – which is original because it is one of the first studies on prosecutors – all the papers included in this symposium are original in their own way – because of the type of data they use, the country they study or the scope of their analysis. We do hope that this new empirical step toward a better understanding of the role of judicial institutions will breed more studies.