nep-law New Economics Papers
on Law and Economics
Issue of 2014‒10‒03
three papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Does the Appeals Process Lower the Occurrence of Legal Errors? By Bertrand Chopard; Edwige Marion; Ludivine Roussey
  2. Isolated Capital Cities, Accountability, and Corruption: Evidence from US States By Filipe R. Campante; Quoc-Anh Do
  3. Costly Institutions as Substitutes: Novelty and Limits of the Coasian Approach By Ugo Pagano; Massimiliano Vatiero

  1. By: Bertrand Chopard; Edwige Marion; Ludivine Roussey
    Abstract: This paper challenges the commonly held idea that the appeals process lowers the occurrence of legal errors. We show that, even if incorporating the right to bring an appeal in criminal adjudication directly offers the opportunity to correct mistakes made at trial, the …nal impact on the appeals process on the accuracy of judicial decisions is ambiguous because of its effect through trial court decision-makerse's effort and crime deterrence. We …nd out that according to (i) whether trial court decision-makers are rather reputation-concerned or socially-motivated, (ii) the distribution of the population of potential offenders and (iii) the marginal effecf of decision-makers'effort on the probability of wrongful conviction compared to wrongful acquittal, implementing an appeals process may spur decision-makers to reduce their effort and thus be detrimental to the accuracy of legal decisions. We show that this result is true whether an appeal can be brought both after an acquittal or a conviction at trial, or the right to bring an appeal is limited by double jeopardy.
    Keywords: appeals, legal errors, crime deterrence.
    JEL: K14 K4
    Date: 2014
  2. By: Filipe R. Campante (Harvard University); Quoc-Anh Do (Département d'économie)
    Abstract: We show that isolated capital cities are robustly associated with greater levels of corruption across US states, in line with the view that this isolation reduces accountability. We then provide direct evidence that the spatial distribution of population relative to the capital affects different accountability mechanisms: newspapers cover state politics more when readers are closer to the capital, voters who live far from the capital are less knowledgeable and interested in state politics, and they turn out less in state elections. We also find that isolated capitals are associated with more money in state-level campaigns, and worse public good provision.
    JEL: D72 D73 H41 H83 K42 R23
    Date: 2014–08
  3. By: Ugo Pagano (Department of Economics, University of Siena, Italy); Massimiliano Vatiero (Institute of Law (IDUSI), Università della Svizzera italiana, Lugano, Switzerland)
    Abstract: One of the main contributions of Ronald H. Coase was to demonstrate how mainstream economics was based on a contradictory amalgam of costly physical inputs and free institutional resources, and to gave origin the economics of institutions: each institution is a mode of allocation and organization of economic resources that is to be investigated. In particular, none of the institutions (including the market) is a free lunch. The Coasian approach regards institutions as costly substitutes and provides a fundamental starting point for comparative institutional analysis. However, Coase neglected two issues deriving from the observation that institutions are not cost-free. First, when institutions are costly, one should not only consider their possible substitutes but also how complementary institutions affect their costs, as well as the costs of the possible institutional substitutes. Secondly, the economic analysis should also take into account that the transition from one institutional setup to another cannot occur in costless meta-institutions. The initial conditions may substantially affect the final institutional arrangements. Both the novelty of Coasian approach and its limits were grossly undervalued. The costly institutions assumption requires a view of economics as a historical discipline.
    Keywords: Ronald Coase, transaction costs, institutions, institutional complementarities
    JEL: B25 K0
    Date: 2014–04

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