Inefficiency in Brazilian courts has long been discussed within academic and business circles. Most of the discussion, however, is based on personal “feelings”, common sense, and anecdotal evidence. Almost no empirical or quantitative research has ever been carried out in the national literature.

This dissertation offers a qualitative and quantitative analysis of the Brazilian Judiciary, using the perspectives of the Economic Analysis of Law (or Law and Economics). First, it discusses how institutions, in general, and legal institutions, in particular, became subjects of interest for economists. This has to do with the development of Institutional Economics, and more precisely, New Institutional Economics in the 1960s. Since then, pieces of empirical research in the field abound, highlighting the importance of the quality of (legal) institutions over the economy. Economic Analysis of Law was developed within this context.

The dissertation then, offers a descriptive analysis of the current (critical) situation of the Brazilian Judiciary. We present the most “traditional” explanations for inefficiency in courts, mainly the lack of resources, and the bad quality of the procedural law. Then, we offer alternative explanations, which question the emphasis placed on the amount of resources and, instead, focus on the quality of court management as one of the main sources of (in)efficiency.

Then, we apply Data Envelopment Analysis (DEA) to quantitatively and empirically measure relative efficiency of the Brazilian State Courts. Results show that it varies substantially across the different states and cannot be explained mainly by the amount of resources that each one has available.

Finally, we test one of the most acknowledged hypotheses of the Brazilian Law and Economics literature: that judges tend to favor debtors in contractual relations, i.e., that they have a pro-debtor bias when making judicial decisions. Based on a set of 1,687 decisions of the STJ (Superior Tribunal de Justiça) we find that such a pro-debtor bias does not seem to exist in a consistent manner among Brazilian judges, at least not among the STJ Justices. Yet, judicial decisions do seem to be inconsistent over time, what may cause a high degree of uncertainty.

This dissertation tries to offer a contribution in making economic analysis of the Brazilian Judiciary more empirical, and less based on feelings, anecdotes or common sense.