Template-Type: ReDIF-Paper 1.0
Author-Name: Ulf von Lilienfeld-Toal
Author-X-Name-First: Ulf
Author-X-Name-Last: von Lilienfeld-Toal
Author-Email: 
Author-Workplace-Name: Stockholm School of Economics
Author-Name: Dilip Mookherjee
Author-X-Name-First: Dilip
Author-X-Name-Last: Mookherjee
Author-Email: dilipm@bu.edu
Author-Workplace-Name: Boston University
Author-Name: Sujata Visaria
Author-X-Name-First: Sujata
Author-X-Name-Last: Visaria
Author-Email: svisaria@bu.edu
Author-Workplace-Name: Boston University
Title: The Distributive Impact of Reforms in Credit Enforcement: Evidence from Indian Debt Recovery Tribunals
Abstract: It is generally presumed that strengthening legal enforcement of lender rights increases credit access for all borrowers, by expanding the set of incentive compatible loan contracts. This is based on an implicit assumption of infinitely elastic supply of loans. With inelastic supply, strengthening enforcement generates general equilibrium effects which reduce credit access for small borrowers while expanding it for wealthy borrowers. We find evidence from a firm-level panel data set of such adverse distributional impacts of an Indian judicial reform which increased banks’ ability to recover non-performing loans in the 1990s.
Length: 43
Creation-Date: 2009-04
Revision-Date: 
Publication-Status: 
File-URL:http://www.bu.edu/econ/ied/dp/papers/dp%20183.pdf
File-Format: Application/pdf
File-Function: 
Number: dp-183
Classification-JEL: 
Keywords: 
Handle: RePEc:bos:iedwpr:dp-183