New Economics Papers
on Law and Economics
Issue of 2009‒08‒16
three papers chosen by
Jeong-Joon Lee, Towson University

  1. Plea Bargaining with Budgetary Constraints By Steeve Mongrain; Joanne Roberts
  2. Does parental income matter for onset of offending? By Taryn Ann Galloway and Torbjørn Skardhamar
  3. The responsive approach by the Basel Committee (on Banking Supervision) to regulation: Meta risk regulation, the Internal Ratings Based Approaches and the Advanced Measurement Approaches. By Ojo, Marianne

  1. By: Steeve Mongrain; Joanne Roberts
    Abstract: In this paper, we construct a simple model that illustrates a perverse effect associated with plea bargaining in which an increase in sanctions can lead to reduced deterrence. This finding is derived from the interaction of binding budgetary constraints and plea bargaining. In an environment with these institutional features, higher sanctions are not always optimal when resources are limited, even if such sanctions are costless. Such potential phenomena may be useful in explaining the fact that many states have introduced limitations on plea bargaining. Prosecutors being concerned with their conviction rates is necessary for such a result to be present.
    JEL: K42 K14
    Date: 2009–01–23
  2. By: Taryn Ann Galloway and Torbjørn Skardhamar (Statistics Norway)
    Abstract: Although several established theories of crime often suggest an association between socio-economic background and youth criminal involvement, the empirical evidence for such claims diverges considerably. The aim of this paper is to re-investigate the relationship between family income and criminal charges by exploiting the rich register data available in Norway. The longitudinal data sources used in the study encompass the entire resident population from five birth cohorts, and allow us to identify youths charged with crimes committed from 1992 to 2004 and link information on these youths with information on family earnings for several years. In a criminal career perspective, our outcome variable is the age of first offence (onset). We find that family academic resources are more important than family income for all kinds of offences, except for serious theft.
    Keywords: SES; parental income; onset of offending; criminal careers
    JEL: K14 K40 Z00
    Date: 2009–07
  3. By: Ojo, Marianne
    Abstract: The use of complex and sophisticated financial instruments, such as derivatives, in the modern financial environment, has triggered the emergence of new forms of risks. As well as the need to manage such types of risks, this paper investigates developments which have instigated the Basel Committee in developing advanced risk management techniques such as the Internal Ratings Based (IRB) approaches and the Advanced Measurement Approaches (AMA). Developments since the inception of the 1988 Basel Capital Accord have not only led to growing realisation that new forms of risks have emerged, but that previously existing and managed forms require further redress. Basel II has evolved to a form of meta regulation – a type of regulation which involves the risk management of internal risk within firms. This paper attempts to illustrate the extent to which the Basel II Capital Accord has responded to global and financial developments and concludes on the basis of available research evidence, that given the difficulties attributed to the constantly evolving nature of risk and the need for regulators to remain one step ahead, that Basel II, to an extent, has been responsive in meeting with regulatory demands. However, the existence of unregulated instruments such as hedge funds still implies that, despite its advancements and achievements, the Basel Committee still faces uphill challenges in its efforts to address and regulate risks.
    Keywords: Basel; Committee; bank; regulation; AMA; IRB; risk
    JEL: K2
    Date: 2009–08

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