New Economics Papers
on Law and Economics
Issue of 2011‒11‒07
four papers chosen by
Jeong-Joon Lee, Towson University

  2. The Role of the Courts in Economic Development: The Case of Prewar Japan By Nakabayashi, Masaki; Okazaki, Tetsuji
  3. Divorce Laws and Divorce Rate in the U.S. By Stefania Marcassa
  4. THE AGENT BASED MODELAPPLIED TO CRIME: By giacomo balbinotto neto; Luiz Marcelo Berger; Denis Borenstein

  1. By: Rosetta Lombardo; Marianna Falcone (Dipartimento di Economia e Statistica, Università della Calabria)
    Abstract: Crime is a complex phenomenon which needs to be investigated at appropriate disaggregate temporal and territorial levels of analysis. The specic issue addressed in this paper concerns the possibility of classifying Italian provinces in groups by using a new methodology that combines cluster analysis with panel time series data regarding a wide range of crime indicators, economic performance indicators and other socio-demographic variables. Our main contribution is to show that crime is not inextricably linked to geographic location as is usually believed. From this point of view, the position of the Italian Mezzogiorno has two facets; one is found in those relatively not affluent provinces which are resistant to random street and organized crime while the other facet is encountered in those provinces which are caught in a vicious circle where increasing criminal activity and weak economic performance feed on each other to undermine the security of the population. The pattern for the Center-North of Italy is much more varied and composed of a series of four clusters. In particular, there is a relatively large cluster of provinces which should be considered at risk because of an increasing value added per capita, high rates of population replacement and female employment; all conditions that might attract and encourage criminal activity.
    Keywords: Law-breaking behavior, Local economic development, Socio-economic factors, Cluster analysis, Time-series-cross-section data
    JEL: C32 E27 D73 K42 O1 R11
    Date: 2011–10
  2. By: Nakabayashi, Masaki; Okazaki, Tetsuji
    Abstract: In this paper, we explore the role of the legal system in economic development, focusing on its relationship to the role of private mechanisms in contract enforcement. We use long-term prefecture-level panel data that cover the early stages of industrialization and urbanization in Japan. We found that industrialization increased the demand for civil lawsuits, but that this was conditional on urbanization. In other words, increased demand for civil suits occurred only where industrialization and urbanization simultaneously progressed. At the same time, the inefficiency of the legal system impeded industrial growth, but only conditional on urbanization. That is, the inefficiency of the legal system impeded industrialization only in urban areas. These findings suggest that community-based contract enforcement mechanisms worked in rural areas and that these mechanisms were replaced by the formal legal system as urbanization progressed and community ties declined.
    Keywords: Court, Law, Contract Enforcement, Economic Development, Japan
    JEL: K10 O12 N45
    Date: 2011–01
  3. By: Stefania Marcassa (Paris School of Economics)
    Abstract: At the end of the 1960s, the U.S. divorce laws underwent major changes and the divorce rate more than doubled in all of the states. The new laws introduced unilateral divorce in most of the states and changes in divorce settlements in every state, such as property division, alimony transfers, and child custody assignments. The empirical literature so far has focused on the switch from consensual to unilateral divorce and found that this change cannot fully account for the increase in the divorce rate. Also, the divorce rate increased even in states where the decision remained consensual. In this paper, I consider the effects of other aspects of the legal change. I show that changes in divorce settlements provide economic incentives for both spouses to agree to divorce. Moreover, I describe a mechanism that can explain the different change in divorce rate by age of couples. I solve and calibrate a model where agents differ by gender, and make decisions on their marital status, investment and labor supply. Under the new financial settlements, divorced men gain from a favorable division of property, while women gain from an increase in alimony and child support transfers. Since both of them are better off in the new divorce setting, the existing requirement of consent for divorce (consensual or unilateral) is no longer relevant. Results show that changes in divorce settlements account for a substantial amount of the increase in the aggregate divorce rate. I also find that the increase in divorce rate of young couples with children contributes the most to the overall increase, which is consistent with the data.
    Keywords: Age-specific divorce rate, unilateral and consensual divorce, divorce laws, property division, alimony and child support, child custody
    JEL: J12 D13 K36
    Date: 2011–03
  4. By: giacomo balbinotto neto; Luiz Marcelo Berger; Denis Borenstein
    Date: 2011

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