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on Law and Economics |
| By: | Lakshmi Iyer (Harvard Business School, Business, Government and the International Economy Unit); Anandi Mani (University of Warwick); Prachi Mishra (Research Department, IMF); Petia Topalova (Research Department, IMF) |
| Abstract: | Using state-level variation in the timing of political reforms, we find that an increase in female representation in local government induces a large and significant rise in documented crimes against women in India. Our evidence suggests that this increase is good news, as it is driven primarily by greater reporting rather than greater incidence of such crimes. In contrast, we find no increase in crimes against men or gender-neutral crimes. We also examine the effectiveness of alternative forms of political representation: Large scale membership of women in local councils affects crime against them more than their presence in higher-level leadership positions. |
| Keywords: | crime, women's empowerment, minority representation, voice |
| JEL: | J12 J15 J16 P16 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:hbs:wpaper:11-092&r=law |
| By: | Alon Harel; Eyal Winter |
| Abstract: | The traditional premise of criminal law is that criminals who are convicted of similar crimes under similar circumstances ought to be subject to identical sentences. This article provides an efficiency-based rationale for discriminatory sentencing, i.e., establishes circumstances under which identical crimes ought to be subject to differential sentencing. We also establish the relevance of this finding to the practices of sentencing and, in particular, to the Sentencing Guidelines. Most significantly, we establish that the model can explain why celebrities, leaders, or recidivists ought to be subject to harsher sanctions than others. Discriminatory sentencing is optimal when criminals confer positive externalities on each other. If a criminal A who imposes (non-reciprocal) large positive externalities on criminal B is punished sufficiently harshly, B would expect A not to commit the crime and, consequently, he would expect not to benefit from the positive externalities conferred on him by A. Given that B's expected benefits are lower, the sanctions sufficient to deter B are also lower than the ones imposed on A. The result can be easily extended to the case of reciprocal externalities. Assume that a criminal A imposes positive externalities on B and B imposes identical positive externalities on A. If A is subject to a sufficiently harsh sanction and B knows this, B would expect A not to perform the crime and therefore would expect not to benefit from the positive externalities otherwise conferred on B. Consequently, a more lenient sanction than the sanction imposed on A would be sufficient to deter B. |
| JEL: | K13 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp569&r=law |
| By: | David Azriel; Micha Mandel; Yosef Rinott |
| Abstract: | We consider the classical problem of selecting the best of two treatments in clinical trials with binary response. The target is to find the design that maximizes the power of the relevant test. Many papers use a normal approximation to the power function and claim that Neyman allocation that assigns subjects to treatment groups according to the ratio of the responses’ standard deviations, should be used. As the standard deviations are unknown, an adaptive design is often recommended. The asymptotic justification of this approach is arguable, since it uses the normal approximation in tails where the error in the approximation is larger than the estimated quantity. We consider two different approaches for optimality of designs that are related to Pitman and Bahadur definitions of relative efficiency of tests. We prove that the optimal allocation according to the Pitman criterion is the balanced allocation and that the optimal allocation according to the Bahadur approach depends on the unknown parameters. Exact calculations reveal that the optimal allocation according to Bahadur is often close to the balanced design, and the powers of both are comparable to the Neyman allocation for small sample sizes and are generally better for large experiments. Our findings have important implications to the design of experiments, as the balanced design is proved to be optimal or close to optimal and the need for the complications involved in following an adaptive design for the purpose of increasing the power of tests is therefore questionable. |
| Keywords: | Neyman allocation, adaptive design, asymptotic power, Normal approximation, Pitman efficiency, Bahadur efficiency, large deviations |
| JEL: | K13 |
| Date: | 2011–03 |
| URL: | http://d.repec.org/n?u=RePEc:huj:dispap:dp568&r=law |
| By: | Ojo, Marianne |
| Abstract: | In what ways can changes to the structure of regulation (as well as other regulatory reforms) mitigate the effects of policies which trigger financial instability? More specifically policies, information asymmetries or externalities which could give rise to bank contagion, systemic/liquidity risks or procyclical effects? Whilst acknowledging that accounting standards play a fundamental role in addressing problems which could contribute to information asymmetries and ultimately systemic risks, this paper also highlights why the type of regulatory structure, clear allocation of responsibilities between regulators, as well as measures aimed at fostering accountability, constitute vital elements which could serve as safeguards in mitigating procyclical effects (as well as other factors) which could trigger financial instability. In achieving this aim, the paper focusses on the rationale for fair value accounting, as well as problematic issues arising from its implementation. The adoption of international accounting standards is considered to have a vital role in contributing to financial stability. This paper will also illustrate how the implementation of accounting standards and policies, in certain instances, have contrasted with Basel Committee initiatives aimed at mitigating procyclicality and facilitating forward looking provisioning. More importantly, the paper will highlight how and why differences between regulatory and accounting policies could (and should) be mitigated. |
| Keywords: | stability; liquidity risks; systemic risks; pro cyclicality; fair values; information; certainty; regulation; central banks; accountability; macro prudential regulation |
| JEL: | K2 D8 M4 E3 |
| Date: | 2011–03–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:29314&r=law |
| By: | Guzman, Andrew |
| Abstract: | International law is built on the foundation of state consent. A state’s legal obligations are overwhelmingly – some would say exclusively – based on its consent to be bound. This focus on consent offers maximal protection to individual states. If a country feels that a proposed change to international law does not serve its interests, it can avoid that change by withholding its agreement. This commitment to consent preserves the power of states, but it also creates a serious problem for the international system. Because any state can object to any proposed rule of international law, only changes that benefit every single affected state can be adopted. This creates a cumbersome status quo bias. Though legal reforms that would lead to a loss of well-being are avoided, so are reforms that would increase well-being for most but not all states. This Article challenges the conventional view of consent. It argues that our existing commitment to consent is excessive and that better outcomes would result from greater use of non-consensual forms of international law. Though consent has an important role to play, we cannot address the world’s greatest problems unless we are prepared to overcome the problem it creates – the consent problem. International law has developed a variety of ways to live with the consent problem. These include the granting of concessions by supporters of change to opponents thereof, customary international law, and to the United Nations Security Council. None of these, however, provide a sufficient counterweight to the consent problem. There are also strategies employed to work around the consent problem, mostly through the use of soft law. In particular, the international system has developed a plethora of international organizations and international tribunals that generate soft law. As currently used and perceived by the international legal system, states, and commentators, these soft law strategies are helpful, but insufficiently so. We could achieve better results within the system by expanding our acceptance of the soft law promulgated by these bodies and raising the expectation of compliance placed on states. This move toward greater support for non-consensual soft law would help to overcome the consent problem, and represent a step in the right direction for the international system. |
| Date: | 2011–03–10 |
| URL: | http://d.repec.org/n?u=RePEc:cdl:oplwec:1865584&r=law |