Courts as monitoring agents: The case of China

Abstract

This paper shows that courts are not only a crucial part of the rule of law in the conventional sense, but that they can also serve an important function in revealing information to the central government about the performance of lower level governments. When courts function in this informative way, the central government is able to improve the performance of lower level governments. After developing a general argument in that vein, the recent reforms to the Chinese court system are partially interpreted as an attempt to make the courts monitoring agents for the central government. Based on primary data from more than 1000 Chinese local courts, the argument is tested empirically and its hypotheses are largely confirmed.