The Selection of Litigation against Government Agencies: Evidence from China
-
Wei Cui
and
Zhiyuan Wang
Abstract
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 appellants pursuing administrative appeals do not intend to litigate.
Acknowledgement
We are grateful to anonymous referees, Professors Donald Clarke and J. J. Prescott, audiences at Zhejiang University Guanghua School of Law, the American Law and Economic Association Annual Meeting (2016) and the Canadian Law and Economics Association Annual Meeting (2016), and especially the Editor in Chief of the Review of Law and Economics (Professor Christoph Engel) for helpful comments. All errors remain our own.
Appendix
The ratio of disposition “Other” over total concluded cases.
Evolution of Chinese administrative litigation: Aggregate patterns (Including Other).
Evolution of Chinese administrative litigation: Aggregate patterns (Excluding Other for Select Years).
Correlation between adjudication and Plaintiff Win Rates: Cases including other, 1989–2013 (OLS with Fixed Effects).
| (1) | |
|---|---|
| D.V.=Plaintiff Win Rate | Fixed Effects |
| Adjudication rate | −0.068 |
| (0.044) | |
| Constant | 0.323*** |
| (0.041) | |
| Observations | 233 |
| R-squared | 0.828 |
| Case FE | yes |
| Year FE | yes |
Standard errors in parentheses.
p<0.01,
p<0.05,
p<0.1.
Correlation between adjudication and Plaintiff Win Rates: Cases excluding other for select years, 1989–2013 (OLS with Fixed Effects).
| (1) | |
|---|---|
| D.V.=Plaintiff Win Rate | Fixed Effects |
| Adjudication rate | −0.110** |
| (0.046) | |
| Constant | 0.351*** |
| (0.044) | |
| Observations | 233 |
| R-squared | 0.792 |
| Case FE | yes |
| Year FE | yes |
Standard errors in parentheses.
p<0.01,
p<0.05,
p<0.1.
Correlation between adjudication and Plaintiff Win Rates cross-agencies: Cases including other, 1989–2013 (OLS with Fixed Effects).
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| D.V.=Plaintiff Win Rate | family planning | industry and commerce | labor and social security | land | other | public health | public security | tax | township government | transportation | urban construction |
| Adjudication Rate | −0.205*** | −0.211 | 0.193 | 0.156 | −0.298*** | 0.025 | −0.414*** | −0.272*** | −0.115 | −0.032 | −0.127 |
| (0.040) | (0.188) | (0.336) | (0.197) | (0.086) | (0.301) | (0.125) | (0.085) | (0.160) | (0.103) | (0.135) | |
| Year Counter | −0.021*** | −0.012*** | −0.013 | −0.008*** | −0.011*** | −0.014*** | −0.011*** | −0.006** | −0.005 | −0.009* | −0.005** |
| (0.002) | (0.002) | (0.011) | (0.001) | (0.001) | (0.003) | (0.001) | (0.003) | (0.006) | (0.005) | (0.002) | |
| Constant | 0.590*** | 0.522*** | 0.326 | 0.311** | 0.543*** | 0.354** | 0.612*** | 0.378*** | 0.425** | 0.344** | 0.394*** |
| (0.052) | (0.124) | (0.424) | (0.134) | (0.054) | (0.147) | (0.070) | (0.062) | (0.185) | (0.119) | (0.065) | |
| Observations | 13 | 20 | 12 | 24 | 24 | 18 | 24 | 16 | 12 | 18 | 20 |
| R-squared | 0.892 | 0.767 | 0.723 | 0.722 | 0.900 | 0.645 | 0.840 | 0.586 | 0.081 | 0.267 | 0.430 |
Robust standard errors in parentheses.
***p<0.01, **p<0.05, *p<0.1.
Note: Agencies of agriculture, culture, environment, forestry and technology supervision are excluded due to data scarcity (n<10).
Correlation between adjudication and Plaintiff Win Rates cross-agencies: Cases excluding other for select years, 1989–2013 (OLS with Fixed Effects).
| (1) | (2) | (3) | (4) | (5) | (6) | (7) | (8) | (9) | (10) | (11) | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| D.V.=Plaintiff Win Rate | family planning | industry and commerce | labor and social security | Land | other | public health | public security | tax | township government | transportation | urban construction |
| Adjudication Rate | −0.409*** | −0.333** | −0.410** | −0.268*** | −0.401*** | −0.307* | −0.457*** | −0.288*** | −0.372* | −0.143 | −0.402*** |
| (0.077) | (0.124) | (0.148) | (0.094) | (0.077) | (0.157) | (0.108) | (0.077) | (0.199) | (0.129) | (0.110) | |
| Year Counter | −0.028*** | −0.012*** | −0.027*** | −0.008*** | −0.011*** | −0.011*** | −0.011*** | −0.006* | −0.010 | −0.008 | −0.004** |
| (0.005) | (0.002) | (0.006) | (0.001) | (0.001) | (0.003) | (0.001) | (0.003) | (0.008) | (0.005) | (0.002) | |
| Constant | 0.843*** | 0.593*** | 0.989*** | 0.589*** | 0.602*** | 0.515*** | 0.642*** | 0.381*** | 0.672** | 0.393** | 0.547*** |
| (0.132) | (0.092) | (0.192) | (0.071) | (0.052) | (0.094) | (0.061) | (0.062) | (0.253) | (0.135) | (0.073) | |
| Observations | 13 | 20 | 12 | 24 | 24 | 18 | 24 | 16 | 12 | 18 | 20 |
| R-squared | 0.822 | 0.699 | 0.709 | 0.473 | 0.864 | 0.502 | 0.831 | 0.596 | 0.275 | 0.177 | 0.414 |
Robust standard errors in parenthese.s
***p<0.01, **p<0.05, *p<0.1.
Note: Agencies of agriculture, culture, environment, forestry and technology supervision are excluded due to data scarcity (n<10).
ANOVA Analysis I (Including Other)
Finally, we perform an ANOVA test on plaintiff win rate and adjudication rate, respectively when we construct two variables by including others. The results show that the means in both the plaintiff win rate and adjudication rate are not equal (p=0.000). However, because we can reject the hypothesis of equal variance for both rates (p=0.002 for the plaintiff win rate, and p=0.000 for the adjudication rate), which violates the equal-variance assumption of ANOVA, we are cautious about the findings.
ANOVA Analysis II (Excluding Other for Select Years)
We also perform an ANOVA test on plaintiff win rate and adjudication rate, respectively when we construct two variables by excluding others for select years. The results show that the means in both the plaintiff win rate and adjudication rate are not equal (p=0.000). However, because we can reject the hypothesis of equal variance for both rates (p=0.005 for the plaintiff win rate, and p=0.000 for the adjudication rate), which violates the equal-variance assumption of ANOVA, we are cautious about the findings.
Violin plot of plaintiff win rate and adjudication rate (Including Other).
Violin plot of plaintiff win rate and adjudication rate (Excluding Other for Select Years).
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- Judicial Behavior and Devolution at the Privy Council
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- The Selection of Litigation against Government Agencies: Evidence from China
Articles in the same Issue
- Anti-Crime Laws and Retail Prices
- Recognition of Non-Controlling Interest in Consolidated Financial Statements Based on Property Rights
- Judicial Behavior and Devolution at the Privy Council
- Quality of Outsourced Services, Opportunism and Contract Design
- Skill-Biased Technological Change, Earnings of Unskilled Workers, and Crime
- The Selection of Litigation against Government Agencies: Evidence from China
