How to make judicial independence measurable?

Judicial independence plays a crucial role in fostering long-term economic growth, but not all forms of independence matter equally. What truly drives growth is de facto judicial independence—meaning the actual, practiced autonomy of the judiciary, not just its legal enshrinement. This real-world independence is more likely to emerge in democratic contexts and in countries with strong press freedom, which makes it politically costly for governments to interfere with the judiciary. Interestingly, although legal provisions (de jure independence) do not strongly correlate with de facto independence on their own, they do appear to facilitate it over time. In other words, constitutional reforms may still serve as a lever for real change, albeit indirectly. Another key finding is the relationship between judicial independence and private property rights. While these two can theoretically exist independently, economic growth benefits most when strong property rights are combined with de facto judicial independence. In fact, in countries with weak judicial independence (below a certain threshold), simply strengthening property rights does not yield significant growth benefits. Finally, private arbitration has been considered as a potential shortcut in countries with weak state judiciaries. However, evidence suggests it cannot substitute for a functioning public judiciary. Without de facto judicial independence, non-state arbitration mechanisms offer no reliable path to economic performance. Thus, the independence of state judiciaries remains a foundational requirement for economic development.

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