The Impact of Legal Frameworks and the Functioning of Judicial Systems on Consumer Over-indebtedness: A Comparative Analysis of EU Member States
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2024-08-16
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en
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How do different judicial climates across EU member states impact consumer over-indebtedness? Over-indebtedness affects the entire economy, and is not just a household level issue. I construct a sample of country-level annual data from Eurostat, CEPEJ, and OECD, with a time frame from 2010 until 2020. The fixed effects model demonstrates that efficient judicial systems, particularly in civil case resolution, can reduce over-indebtedness. Conversely, solely increasing budgetary capacity of judicial systems does not reduce consumer debt. These results are robust findings and underline the importance of context-specific judicial reforms. The effect of judicial factors helps to explain the causes of over-indebtedness under consumers following a period of stable debt increase, which is disconnected from (macro-)economic trends. As such, the analysis provides another potential indicator, and a new research area for consumer debt policy.
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Faculteit der Managementwetenschappen