Economic Efficiency of Public Interest Litigations (PIL): Lessons from India

22 Pages Posted: 26 Jul 2005 Last revised: 22 Apr 2009

See all articles by Francis Rathinam

Francis Rathinam

International Initiative for Impact Evaluation (3ie)

A. V. Raja

University of Hyderabad - School of Economics

Date Written: July 1, 2008

Abstract

Past interest in the phenomena of Public interest litigation has concentrated on a legal justification of PIL and on arguments based on access to Justice for the poor. There seems to be scant literature that looks at PIL from a Law and Economics perspective. This paper sets up a framework to analyze the economic efficiency of public Interest Litigation in the Indian context. We argue that PIL can be justified as an economically efficient choice of redressel if certain conditions are fulfilled. These are, insufficient incentive for private litigation, regulatory failures and the inability of class action to counter harm due to high transaction costs. Thus PIL is seen as an efficient method of bundling interests wherever there are failures of the kind mentioned. We delineate the kinds of economic activity that generate these specific conditions and analyze if PIL has been successful in such cases. We show that PILs filed in India do seem to stem from considerations of Economic efficiency, but there are instances where PIL may be used strategically to pull off private ends and open up a floodgate of litigation.

Keywords: Public Interest Litigations, Litigation Process, Environmental, Health, and Safety Law

JEL Classification: K32, K41

Suggested Citation

Rathinam, Francis Xavier and Raja, A. V., Economic Efficiency of Public Interest Litigations (PIL): Lessons from India (July 1, 2008). Available at SSRN: https://ssrn.com/abstract=760370 or http://dx.doi.org/10.2139/ssrn.760370

Francis Xavier Rathinam (Contact Author)

International Initiative for Impact Evaluation (3ie) ( email )

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A. V. Raja

University of Hyderabad - School of Economics

Gachibowli
Hyderabad, Andhra Pradesh 500046
India

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