New Economics Papers
on Law and Economics
Issue of 2009‒06‒17
eight papers chosen by
Jeong-Joon Lee, Towson University

  1. Sex, Money and Corruption By José A. Rodrigues-Neto
  2. A Note on the Complementarity of Uniform Emission Standards and Monitoring Strategies By Arguedas, Carmen; Rousseau, Sandra
  3. Risk management by the Basel Committee: evaluating progress made from the 1988 Basel Accord to recent developments By Ojo, Marianne
  4. Regulatory strategies By Ojo, Marianne
  5. Financial regulation and risk management: addressing risk challenges in a changing financial environment By Ojo, Marianne
  6. Reviewing regulatory objectives: should the scope of regulation be extended? By Ojo, Marianne
  7. Responsive regulation:achieving the right balance between persuasion and penalisation By Ojo, Marianne
  8. Integrated Political Strategy By John M. de Figueiredo

  1. By: José A. Rodrigues-Neto
    Abstract: This paper investigates the consequences of receiving sexual favors or other services as an alternative form of bribery. It infers how these non-monetary payments are made by analyzing the relative effciency of sex bribes and the bargaining power of agents. By assumption, sex payments are less e¢ cient and harder to detect monetary payments. If the Receiver has a sufficiently high (low) utility for consuming sex, then only sex (money) bribes are feasible. In intermediate cases, sexual bribery is offered if and only if the relative bargaining power of the Receiver is sufficiently small compared to that of the Corruptor.
    JEL: K2 K4
    Date: 2009–01
  2. By: Arguedas, Carmen (Departamento de Análisis Económico (Teoría e Historia Económica). Universidad Autónoma de Madrid.); Rousseau, Sandra (Center of Economic Studies, K.U.Leuven, Naamsestraat 69, B-3000 Leuven, Belgium,)
    Abstract: Despite the well-known static cost-inefficiency of uniform emission standards to control pollution, governments continue to use them in a variety of settings. In this paper, we show that inspection agencies can sometimes use their informational advantage to design monitoring strategies that complement uniform emission standards in restoring efficiency.
    Keywords: pollution standards; monitoring; non-compliance.
    JEL: K42 L51 Q58
    Date: 2009–06
  3. By: Ojo, Marianne
    Abstract: This paper traces developments from the inception of the 1988 Basel Capital Accord to its present form (Basel II). In highlighting the flaws of the 1988 Accord, an evaluation is made of the Basel Committee’s efforts to address such weaknesses through Basel II. Whilst considerable progress has been achieved, the paper concludes, based on one of the principal aims of these Accords, namely the management of risk, that more work is still required particularly in relation to hedge funds and those risks attributed to non bank financial institutions.
    Keywords: risk;management;regulation;banks;Basel;Committee
    JEL: K2
    Date: 2008–08
  4. By: Ojo, Marianne
    Abstract: Over the years, there has been a shift from a wide command-and-control style of supervision whereby the regulator imposes detailed rules with which regulators supervise to one which consists of risk based regulatory strategies. ‘Enforced Self Regulation’, a regulatory strategy whereby negotiation takes places between the State and the individual firms, lies between the command-and-control style of supervision and meta risk regulation in that firms are still required to regulate but according to their own models. It differs from the traditional command-and-control style of bank supervision in that firms and not the regulator, are required to regulate. It is similar to meta-risk regulation in that the individual firm’s model is taken into consideration in regulating such firms. Whilst the merits and disadvantages of the individual regulatory strategies are considered, this paper concludes that all regulatory strategies should take into consideration the importance of management responsibilities – both on individual and corporate levels.
    Keywords: command;control;regulation;meta;risk
    JEL: K2
    Date: 2008–09
  5. By: Ojo, Marianne
    Abstract: Amongst other things, this paper aims to address complexities and challenges faced by regulators in identifying and assessing risk, problems arising from different perceptions of risk, and solutions aimed at countering problems of risk regulation. It will approach these issues through an assessment of explanations put forward to justify the growing importance of risks, well known risk theories such as cultural theory, risk society theory and governmentality theory. In addressing the problems posed as a result of the difficulty in quantifying risks, it will consider a means whereby risks can be quantified reasonably without the consequential effects which result from the dual nature of risk that is, risks emanating from the management of institutional risks. Current attempts by the European Union to regulate risks will also be discussed. This discussion will be facilitated through a consideration of recent developments in the EU which are aimed at addressing risks posed by hedge funds. The results obtained from a consultation process on hedge funds, and which will be discussed in the concluding section of this paper, reveal whether the systemic relevance of hedge funds and prime brokerage regulation need to be reviewed. Questions also addressed during the consultation process, which include whether indirect prudential regulation is inadequate to shield the financial system from hedge funds’ failure and whether prudential authorities have necessary tools to monitor exposures of the core financial system to hedge funds, will also be discussed.
    Keywords: risk;regulation;banks;regulators;audit;financial
    JEL: K2
    Date: 2009–04
  6. By: Ojo, Marianne
    Abstract: This paper will consider whether the scope of financial regulation should be extended and if so, ways in which this could occur. In order to carry out these tasks, it will not only address problems identified from the recent crises and Basel 2, gaps which exist in some of the responses to these issues, but will also consider what roles other parties such as central banks and external auditors can play in achieving financial objectives. To a certain extent, it will address these issues by making references to proposals which have been put forward from different sources. It will introduce the points of discussion through an overview of global developments which have necessitated the need for a review of financial regulation and through a review of the present regulatory objectives.
    Keywords: risk;external;auditor;bank;regulation;financial;objectives
    JEL: K2
    Date: 2009–06
  7. By: Ojo, Marianne
    Abstract: This paper not only considers the regulatory challenges faced by regulators, but also the potential of responsive regulation and particularly meta regulation to address these challenges. It explores developments which have necessitated a change from the traditional form of regulation, that is, command and control regulation to more responsive hybrids of regulation. Even though traditional regulation has its advantages, its inability to address the demands of changing business environments has resulted in the adoption of more flexible forms of regulation such as risk based regulation and responsive regulation. Whilst the potential of responsive regulation is considered, the complexities and challenges faced by the regulator in identifying and assessing risk, solutions aimed at countering problems of risk regulation, along with the problems arising from different perceptions of risk will be addressed only briefly.
    Keywords: meta;responsive;risk;regulation;bank
    JEL: K2
    Date: 2009–03
  8. By: John M. de Figueiredo
    Abstract: This paper reviews the literature on corporate political strategy and identifies a number of open research questions and streams for potential investigation. The paper develops a framework to explain why, when, and how a firm will pursue multi-forum political action as part of its non-market and integrated strategy.
    JEL: K23 P16
    Date: 2009–06

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