New Economics Papers
on Law and Economics
Issue of 2014‒05‒24
twelve papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Lessons from the economics of crime By Philip J. Cook; Stephen Machin; Olivier Marie; Giovanni Mastrobuoni
  2. Globalisation and Law: Impacts of the Globalisation on the Pracitise of Cross-border Transactions from a German Perspective e By Fischer, Peter C.
  3. Crime, Punishment, and Schooling Decisions: Evidence from Colombian Adolescents By David Zarruk; Catherine Rodríguez; Ana María Ibáñez
  4. Gender equality : a european challenge at the crossroads of economics, law and politics By Françoise Milewski; Réjane Sénac
  5. Public Enforcement of Securities Market Rules: Resource-based evidence from the Securities Exchange Commission By Lohse, Tim; Pascalau, Razvan; Thomann, Christian
  6. Disparities in taking sick leave between sectors of activity in France: a longitudinal analysis of administrative data By Thomas Barnay; Sandrine Juin; Renaud Legal
  7. The Impact of the Sense of Security from Crime on Residential Property Values in Brazilian Metropolitan Areas By Rosa M. R. Massena; Kaizô I. Beltrão; David M. Vetter
  8. Reinforcing Rule of Law Oversight in the European Union By J.H.H. Weiler
  9. The role of covenants in bond issue and investment policy. The case of Russian companies. By Flavio Bazzana; Anna Zadorozhnaya; Roberto Gabriele
  10. Are We All Playing the Same Game?: The Economic Effects of Constitutions Depend on the Degree of Institutionalization By Mariano Tommasi; Carlos Scartascini; Germán Caruso
  11. Confidence in Justice: Evidence from Brazil By Joelson Oliveira Sampaio; Rodrigo de Losso da Silveira Bueno; Luciana Gross Cunha
  12. Coasean Bargaining in the Presence of Pigouvian Taxation: Revisiting the Buchanan-Stubblebine-Turvey Theorem By Ian A. MacKenzie; Markus Ohndorf

  1. By: Philip J. Cook; Stephen Machin; Olivier Marie; Giovanni Mastrobuoni
    Abstract: Olivier Marie explains the value of an economic approach to the analysis, design and evaluation of crime-fighting policies.
    Keywords: Crime, offenders, crime control, cost-benefit analysis
    JEL: I2 K42 H00 J65
    Date: 2014–02
  2. By: Fischer, Peter C. (Department of Economics of the Duesseldorf University of Applied Sciences)
    Abstract: Topic of this publication is the impact of globalisation on the practise of cross-border transactions from a German legal perspective. The focus is on four key questions: Who determines the applicable law in case of a cross-border transaction? Who determines which courts shall have international jurisdiction? In which language will the legal documents be negotiated and drafted in practise? The culture of which jurisdiction will actually influence the structure and wording of such legal documentation? The answers to these questions will make clear that cross-border transactions are still primarily ruled by national laws or in case of the member states of the European Union also by supernational law, meaning there is generally no unified international law, while the language of such contractual documents as well as the culture influencing the legal documentation are in practise generally Anglo-Saxon standards.
    Abstract: Der nachstehende Artikel setzt sich mit der Frage auseinander, wie sich aus deutscher juristischer Sicht die Globalisierung bislang auf die Praxis grenz-überschreitender Transaktionen ausgewirkt hat. Dies soll unter vier zentralen Aspekten untersucht werden: Wer bestimmt das anwendbare Recht bei Transaktionen mit Auslandsbezug? Wer bestimmt die internationale Zuständigkeit der Gerichte? In welcher Sprache werden die Vertragsdokumente in der Praxis verhandelt und verfasst? Welche Rechtskultur prägt die Struktur und die Formulierung dieser Vertragsdokumentation? Die Antworten auf diese Fragen werden deutlich machen, dass das Recht der grenzüberschreitenden Transaktionen nach wie vor primär national oder im Falle der EU-Mitgliedsstaaten auch supranational geprägt ist, d.h. international in der Regel nicht einheitlich geregelt ist, während Vertragssprache und Vertragskultur faktisch grundsätzlich angelsächsischen Standards entspricht.
    Keywords: Grenzüberschreitende Transaktionen, Rechtswahl, Internationaler Gerichtsstand, Vertragssprache, Rechtskultur, Russland, Wirtschaftsbeziehungen, Cross-border Transactions, Choice of Law, International Jurisdiction, Language of Contract, Legal Culture, Russia, Economic Relation
    JEL: K12 L14
    Date: 2014–05
  3. By: David Zarruk; Catherine Rodríguez; Ana María Ibáñez
    Abstract: This paper uses a natural policy experiment to estimate how changes in the costs of engaging in criminal activity may influence adolescents¿ decisions in crime participation and school attendance. The study finds that, after an exogenous decrease in the severity of judicial punishment imposed on Colombian adolescents, crime rates in Colombian municipalities increased. This effect appears to be larger in municipalities with a higher proportion of adolescents between 14 and 15 years of age. The study provides suggestive evidence that one possible transmission channel for this effect is a decrease in the effort of the police force to capture teenage suspects. The study also finds that the probability that boys of this same age group attend school decreased following the change in the juvenile justice system. This effect is stronger for boys from homes where the heads of household are less educated.
    Keywords: Judicial Administration & Legal Reform, Education, Youth & Children, Citizen Security & Crime Prevention, Crime, School attendance, Adolescents
    Date: 2013–06
  4. By: Françoise Milewski (OFCE); Réjane Sénac (Centre de recherches politiques de Sciences Po)
    Abstract: Europe is seen as the engine of public policy on gender equality, particularly through Member States’ implementation of EU law into national law. Straddling legislative components and soft law instruments (such as a cross-cutting approach and promoting “best practices”), EU gender equality policies represent a vantage point for analyzing the Europeanization process. We shall begin by discussing the specificity of national situations before analyzing the transnational dimension of the EU law on non-discrimination. We shall then look at European equality policies by looking at current debate including: issues surrounding the European employment Strategy, connections between hard law and soft law, gender equality and Europeanization. In affirming the “principle of equal pay, without discrimination based on sex”, Article 119 of the Treaty of Rome embodies the founding dimension of gender equality in the European project. In this way, EU texts – from the Common Market to the internal market, and then to integration – place gender equality at the crossroads of economics, law and politics. After highlighting how diverse the situation is in different countries, we will present the ways in which European policy on equality addresses
    Date: 2014–05
  5. By: Lohse, Tim (Berlin School of Economics and Law, & Max Planck Institute for Tax Law and Public Finance,); Pascalau, Razvan (Department of Economics and Finance,); Thomann, Christian (Royal Institute of Technology (KTH), Centre of Excellence for Science and Innovation Studies (CESIS), Ministry of Finance, & Leibniz University of Hannover)
    Abstract: We empirically investigate whether increases in the U.S. Securities and Exchange Commission’s (SEC) budget have an effect on firms’ compliance behavior with securities market rules. Our study uses a dataset on the SEC’s resources and its enforcement actions over a period beginning shortly after the Second World War and ending in 2010. We find that increases in the SEC’s resources both improve compliance and lead to an increased activity level of the SEC. The higher level of compliance is reflected by a decrease in the numbers of enforcement cases. The increased activity level is reflected by a surge in the number of inves-tigations conducted by the SEC.
    Keywords: Public enforcement; securities laws; compliance; Securities and Exchange Com-mission; budget
    JEL: D21 G14 G18 K22
    Date: 2014–05–20
  6. By: Thomas Barnay; Sandrine Juin; Renaud Legal
    Date: 2014
  7. By: Rosa M. R. Massena; Kaizô I. Beltrão; David M. Vetter
    Abstract: Using a hedonic residential rent model for Brazil's metropolitan areas calibrated with microdata from Brazil's annual household survey, this study estimates that increasing the sense of security in the home by one standard deviation would increase average home values by R$1,513 (US$757), or about US$13. 6 billion if applied to all 18.0 million households in the study area. The principal components analysis of sense of security and crime victimization variables indicates that higher-income households feel more secure from crime in the home, even though theft and robbery victimization rise with household income and rent level. Higher levels of home protection measures by higher-income households partially explain this result.
    Keywords: Urban Development, Citizen Security & Crime Prevention, Housing, Sense of security, Crime, Hedonic residential rent model
    Date: 2013–06
  8. By: J.H.H. Weiler
    Abstract: This paper provides a critical overview of options available to the EU to deal with the Rule of Law crisis in some of the Member States. The options it engages with were offered and discussed by a handful of the leading experts in the field and drawing on the critical EUI discussion, the first part of the paper tackles the following questions:1. Why should the EU reinforce the oversight of Member States’ Rule of Law performance?2. Are there sufficient legal bases for such oversight – should a reform of the Treaties be required?3. What kind of procedure could be designed to meet the need of such oversight?4. Which body should be entrusted with the oversight function?The second part provides a word of caution warning of the possible problems related to the EU's involvement with the constitutional core of the Member States
    Keywords: rule of law; democracy
    Date: 2014–03–04
  9. By: Flavio Bazzana; Anna Zadorozhnaya; Roberto Gabriele
    Abstract: This study examines the use and determinants of covenants in public debt issued by Russian companies. On the basis of issue characteristics, firm characteristics and systemic risk variables, we investigate that the likelihood of including covenants clause in financial contracts is positively related to the riskiness of bond issues. Us- ing a hand-collected database of Russian firms that place bonds both in domestic and Eurobond market, we provide evidence that the covenant protection in Euro- bond market has a positive impact for those firms that issue in Russian market, with a reduction in covenant intensity. We document that a negative relation be- tween offering yield and the presence of covenants which is consistent with the costly contracting hypothesis (CCH) is registered only in Eurobond market. We al- so find a non linear relation between investment and covenant protection for the firm that issue in Russian market, indicating a possible optimal covenant protec- tion for a bond issue.
    Keywords: covenants, bond, Russian companies
    JEL: G32 G31
    Date: 2014
  10. By: Mariano Tommasi; Carlos Scartascini; Germán Caruso
    Abstract: The understanding of the economic effect of formal institutional rules has progressed substantially in recent decades. These formal analyses have tended to take for granted that institutional arenas such as Congress are the places where decision-making takes place. That is a good approximation in some cases (such as many developed countries today) but not in others. If countries differ in how institutionalized their policymaking is, it is possible that the impact of formal political rules on policy outcomes might depend on that. This paper explores that hypothesis and finds that some important claims regarding the impact of constitutions on policy outcomes do not hold for countries in which institutionalization is low. The findings suggest the need to develop a broader class of policymaking models in which the degree to which decision-making follows "the rules" is also endogenized.
    Keywords: Democracy, Investment, IDB-WP-237
    Date: 2013–07
  11. By: Joelson Oliveira Sampaio; Rodrigo de Losso da Silveira Bueno; Luciana Gross Cunha
    Abstract: One issue that affects the economic and social development of a country is the ability of the judiciary to present itself as a legitimate instance in resolving conflicts that arise in the social, business and economic development. One way to measure this is through legitimacy of the motivations that lead citizens to trust or not in the Judiciary. We created the Brazilian Confidence in Justice Index (BCJI) as a validation argument for our confidence measure. The BCJI is a measure of perception, which shows the opinion of the population about Brazil’s judiciary. Our results indicate that race and gender are important predictors once controlled for other characteristics of the respondents. Blacks have a slightly lower level of confidence in justice than do whites. Women have less confidence than men. Given that blacks and women have lower levels of confidence in justice, efforts should be made to improve the costs and access of the justice system toward this group of individuals. Our findings also have other important implications for confidence in justice. We show that people with low income have lower levels of confidence in justice.
    Keywords: Confidence in Justice; Institutions; Judiciary
    JEL: K11 K30 K40
    Date: 2014–05–15
  12. By: Ian A. MacKenzie (School of Economics, The University of Queensland); Markus Ohndorf (Institute for Environmental Decisions, ETH Zürich)
    Abstract: Coasean arguments against the Pigouvian perspective are well established. A central tenet in this criticism argues that a Pigouvian tax may be a source of inefficiency: if parties were to bargain in the presence of a Pigouvian tax, (allocative) inefficiencies would occur-the so-called Buchanan-Stubblebine-Turvey Theorem. By analyzing a Coasean environment where the appropriation of property rights is costly, we show-in contrast to the Buchanan-Stubblebine-Turvey Theorem-that Coasean bargaining in the presence of a pre-existing (Pigouvian) tax is Pareto improving. This has implications for policy where dual regulatory environments exist, such as regulation at the state and federal level, as well as environmental liability and litigation.
    Date: 2014–05–01

This issue is ©2014 by Eve-Angeline Lambert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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