Interesting read – »Industry Vs. Services: Until the Enforcement Institutions Matter for Economic…«

Differences in economic development in Spain vary widely between highly industrialized northern provinces (Basque Country, Navarra, Aragon) and the service-oriented provinces in the south of the country (Andalucía, Extremadura, Murcia). In a new working paper »Industry Vs. Services: Until the Enforcement Institutions Matter for Economic Specialization: Disaggregated Province-Level Evidence from Spain, «(Banco de España Working Paper No. 1812), Rok Spruk and Juan Sebastian Mora Sanguinetti (Banco de España) show that persistent differences in economic specialization can be explained by the quality and efficiency of judicial institutions. Based on a comprehensive analysis of the Spanish Provincial Courts in the period 1999-2014, they construct congestion rates for administrative, labor and civil jurisdiction. Their results show that rising congestion rates in all three jurisdictions lead to deindustrialization and promote inefficient specialization in low-productivity services. A short summary of an article in Spanish entitled ” Justicia y Economía: ¿Depende la especialización productiva provincial de la congestión judicial?” was published at a large Spanish economic portal Nada es Gratis and can be read here.

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