Judicial Capture

Abstract We use data from Pakistan to establish a reciprocal exchange relationship between the judiciary and the government. We document large transfers in the form of expensive real estate from the government to the judiciary, and reciprocation in the form of pro-government rulings from the judiciary to the government. Our estimates indicate that the allocation of houses to judges increases pro-government rulings and reduces decisions on case merits. The allocation also incurs a cumulative cost of 0.03% of GDP to the government. However, it allows the government to expropriate additional land worth 0.2% of GDP in one year.