Abstract
Researchers widely recognize that prolonged legal proceedings are a significant factor contributing to an inefficient judicial system, which ultimately hampers economic growth. This paper evaluates the causal impact of Italy’s 2016 bankruptcy reform, Legislative Decree No. 59, on the duration of civil proceedings in bankruptcy-related court sections. The reform introduced digital communication tools, streamlined procedures for creditors’ committees, and stricter deadlines for asset distribution. Using a micro-level dataset of over 40,000 cases from the Court of Catania and a Difference-in-Differences (DID) design, complemented by robustness checks, we estimate the effect of the reform on trial duration. The results indicate that partial implementation in 2016 resulted in modest reductions in trial length (approximately 12%), while full implementation by 2018 generated significantly larger and statistically significant efficiency gains, with trial durations decreasing by around 50%. These effects are observed even in complex cases, suggesting that procedural innovations enhanced case management without undermining procedural safeguards. The findings provide robust evidence that targeted reforms, particularly those based on digitalization, can significantly improve judicial performance. More broadly, the study highlights how institutional innovation in high-friction legal systems can enhance creditor protection, mitigate economic uncertainty, and foster more efficient resource allocation.