In a recent article in The Washington Post, Daniel W. Drezner, professor of international politics at the Fletcher School of Law and Diplomacy at Tufts University, neatly summarised the importance of literature reviews in academic papers:
Done well, a literature review states what the extant research has to say about a topic. Is there a scholarly consensus on the question or not? Are there contending schools of thought? What puzzles persist? What data controversies are there?
Peer referees like to see literature reviews in papers, because it sends a signal that the author is keenly aware of what preceded his or her article. An inadequate literature review can be the kiss of death to a paper if the author then proposes an argument or test that the referee knows about but goes uncited.
More importantly, a literature review is the way for someone who is not an expert on this particular topic to digest the current state of play. As someone who is a bit of a generalist in international relations, I find literature reviews extremely helpful, because they let me get up to speed quickly on a new area of research.
More advice here from the Enago blog.