Retailers’ Perception of the Law During and Post-Global Crisis

The 2008 Global Crisis had profound impacts on economies worldwide, prompting significant scrutiny of various institutional frameworks, including court systems. During this period, legal systems faced unprecedented challenges in addressing the ensuing turmoil. Courts were busy with cases related to foreclosures, bankruptcies, and financial misconduct. Due to the exposed weaknesses in regulatory oversight, reforms were made to improve accountability, transparency, and efficiency within judicial systems. Transition economies in Eastern Europe and Central Asia bore a significant brunt of the crisis and its subsequent reform endeavors. In this study, we evaluate the perspectives of Eastern European and Central Asian retailers on their court systems during and after the 2008 global crisis. We assess how many of them dealt with the legal system during and after the crisis, how quickly the cases moved through the court system, how fair and impartial the court was, and how successfully the court could enforce its rulings. To evaluate the impact of the global crisis on retailers’ views on the court system, we compare the crisis period to the post-crisis period. The World Bank’s BEEPSII and BEEPSIV surveys performed in Eastern Europe and Central Asia are used as our crisis and post-crisis samples. To compare the crisis period responses to the post-crisis ones, we use nonparametric tests (i.e. the Mann-Whitney-Wilcoxon and the Chi-square tests). Our results show that, after the crisis, fewer retailers went to court, when compared to the crisis period. This finding can be seen as positive. We also find that, after the crisis, retailers were more optimistic about judicial impartiality and case processing speed in their respective countries, compared to the crisis period. On the other hand, our results show that retailers’ assessments of the court’s ability to implement its rulings in these countries did not seem to change after the crisis. These findings have important policy implications. Policymakers can use these findings to take precautions before a global crisis hits. They will know that a global economic/financial crisis affects the volume of cases, courts’ fairness, and processing speed. Therefore, they can hire more employees to deal with the upcoming problems with the volume and the processing speed, and they can increase the scrutiny of the system to protect the system’s fairness.