Review of Law and Economics
selection theory; Priest and Klein; administrative litigation; civil law v. common law; Chinese law; authoritarian legal systems
We test the relevance of the selection theory of litigation in a contemporary, civil law setting, using Chinese judicial data that span 25 years regarding lawsuits against government agencies. Civil law systems may be characterized by lower costs of litigation and lower rates of settlement than the U.S. legal system, and therefore the presence of selection effects cannot be assumed. We show that selection effects are indeed manifest in Chinese administrative litigation, and suggest that this may be explained by hidden or intangible litigation costs. Our test for selection effects builds on the approach of previous U.S. studies and potentially allows the identification of selection effects to help improve inferences from decided cases. Finally, we examine patterns of settlement and plaintiff wins in pre-litigation administrative appeals in China, and do not find sufficient evidence for selection effects in this process. This could potentially be explained if most appellees pursuing administrative appeals do not intend to litigate.
Wei Cui & Zhiyuan Wang, "The Selection of Litigation against Government Agencies: Evidence from China" [forthcoming in 2017] Rev L & Econ.