nep-law New Economics Papers
on Law and Economics
Issue of 2015‒05‒22
twelve papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Market Definition, Market Power By Louis Kaplow
  2. Street Prostitution Zones and Crime By Bisschop, Paul; Kastoryano, Stephen; van der Klaauw, Bas
  3. Kingpin Approaches to Fighting Crime and Community Violence: Evidence from Mexico's Drug War By Jason M. Lindo; María Padilla-Romo
  4. Measuring the negative externalities of a private leisure activity: hooligans and pickpockets around the stadium By Daniel Montolio; Simón Planells-Struse
  5. International refugee law and the European Union's Refugee Protection Protocol: A study on the ius cogens norm of non-refoulement By Balogh, Cintia
  7. Politics in the Courtroom: Political Ideology and Jury Decision Making By Shamena Anwar; Patrick Bayer; Randi Hjalmarsson
  8. Voluntary Associations, Corporate Rights, and the State: Legal Constraints on the Development of American Civil Society, 1750-1900 By Ruth H. Bloch; Naomi R. Lamoreaux
  9. Fiscal federalism and tax enforcement By Bönke, Timm; Joachimsen, Beate; Schröder, Carsten
  10. Does EU Regulation Hinder or Stimulate Innovation? By Jacques Pelkmans; Andrea Renda
  11. Intellectual Property Rights Protection and Trade By Auriol, Emmanuelle; Biancini, Sara; Paillacar, Rodrigo
  12. Do Schools Discriminate Against Homosexual Parents? Evidence from an Internet Field Experiment By Diaz-Serrano, Luis; Meix-Llop, Enric

  1. By: Louis Kaplow
    Abstract: Market definition and market power are central features of competition law and practice but pose serious challenges. On one hand, market definition suffers decisive logical infirmities that render it infeasible, unnecessary, and counterproductive, and the practice of stating market power requirements as market share threshold tests is incoherent as a matter of empirics and policy. On the other hand, market power is often probative of the desirability of liability, yet the typically assumed functional relationship is unexplored and often implausible. These latter deficiencies are addressed through a ground-up analysis of the channels by which market power can be relevant. It is important to explicitly and simultaneously consider both anticompetitive and procompetitive explanations for challenged practices and to attend to the magnitudes of the social consequences of correct and mistaken imposition of liability in order to identify the various ways and senses in which market power bears on optimal decision-making.
    JEL: D42 K21 L12 L40
    Date: 2015–05
  2. By: Bisschop, Paul (SEO Economic Research); Kastoryano, Stephen (University of Mannheim); van der Klaauw, Bas (VU University Amsterdam)
    Abstract: This paper studies the effects of introducing legal street prostitution zones on both registered and perceived crime. We exploit a unique setting in the Netherlands where legal street prostitution zones were opened in nine cities under different regulation systems. We provide evidence that the opening of these zones was not in response to changes in crime. Our difference-in-difference analysis using data on the largest 25 Dutch cities between 1994 and 2011 shows that opening a legal street prostitution zone decreases registered sexual abuse and rape by about 30% to 40% in the first two years. For cities which opened a legal street prostitution zone with a licensing system we also find significant reductions in drug-related crime and long-term effects on sexual assaults. Perceived drug nuisance increases upon opening but then decreases below pre-opening levels in cities with a licensed prostitution zone. In contrast, we find permanent increases in perceived drug crime in the areas adjacent to the legal prostitution zones.
    Keywords: prostitution, registered crime, perceived crime, regulation, difference-in-difference
    JEL: J16 J47 K14 K23 K42
    Date: 2015–05
  3. By: Jason M. Lindo; María Padilla-Romo
    Abstract: This study considers the effects of the kingpin strategy, an approach to fighting organized crime in which law-enforcement efforts focus on capturing the leaders of the criminal organization, on community violence in the context of Mexico's drug war. Newly available historical data on drug-trafficking organizations' areas of operation at the municipality level and monthly homicide data allow us to control for a rich set of fixed effects and to leverage variation in the timing of kingpin captures to estimate their effects. This analysis indicates that kingpin captures have large and sustained effects on the homicide rate in the municipality of capture and smaller but significant effects on other municipalities where the kingpin's organization has a presence, supporting the notion that removing kingpins can have destabilizing effects throughout an organization that are accompanied by escalations in violence.
    JEL: I18 K42 O12
    Date: 2015–05
  4. By: Daniel Montolio (University of Barcelona & IEB); Simón Planells-Struse (University of Barcelona & IEB)
    Abstract: Given the recent increase observed in crime and violence related to sport activities and the subsequent need for governments to devote more resources to deter this pattern, this article presents empirical evidence that could justify the possibility of taxing the negative externalities associated with the staging of football matches. Focusing specifically on theft (mainly pick pocketing) and assault (interpersonal violence or hooliganism), we seek to determine the extent to which this private leisure activity is responsible for negative crime externalities on a urban context. Drawing on data for the matches played by Football Club Barcelona (FCB) and geocoded crime data for the city of Barcelona (Spain), we assess whether there is an increase in thefts and assaults across the city of Barcelona. Then, conducting an Exploratory Spatial Data Analysis (ESDA) and a spatial regression at the census tract level, we determine the effect of football matches on crime by comparing crime rates during home and away matches. We find an increase in the number of thefts across the whole city but, especially, in those census tracts within a 700-meter radius of the stadium, indicating that despite the increase in the number of police officers on duty in the vicinity of the stadium, potential offenders are attracted to crowds where rewards are likely to be higher and the probability of being apprehended lower. These results are confirmed by the relatively low number of crimes committed during away matches in the census tracts around the stadium. A similar spatial pattern is found for assaults, although the overall impact across the city is not significant. Our results, therefore, provide evidence of a displacement effect of violent supporters (hooligans) towards the census tracts closest to the FCB stadium on football days.
    Keywords: Crime, football, hooliganism, negative externalities, police forces
    JEL: K42 H27 R1 L83
    Date: 2015
  5. By: Balogh, Cintia
    Abstract: International refugee law is binding upon all European Union member states, however European regional instruments, relocation theories and practices may diverge from the 1951 Geneva Convention and 1967 Protocol. This may lead to the violation of the ius cogens norm of the principle of non-refoulement. At the time of massive inflows of refugees from the Middle East - especially Syria - and Africa to the Schengen area, European hosting states are put under major pressure. Being signatories of the main refugee treaties, European states should avoid automatic repatriation of asylum seekers. In order to avoid such violations, it is necessary to incorporate the main Geneva articles into European national legal systems. Accordingly, the current paper is examining the legal background of non-refoulement and refugee protection and the discrepancies between the European Union and United Nations frameworks. The paper answers whether the European system is fully incorporating the ius cogens norm of nonrefoulement into its protocol and practice.
    Keywords: asylum,international refugee law,principle of non-refoulement,United Nations High Commissioner for Refugees,intervention,amicus curiae briefs,safe country lists,safe third countries,chain relocation
    JEL: F53 K4 K12 K33
    Date: 2015
    Abstract: Administration is obliged to notify the reasons of administrative act if the obligation to give reasons is explicitly regulated in the law. However, even if there is no explicit obligation to give reasons in positive regulations, in the rule of law, it is essential for the administration to notify the reasons of any administrative act on the basis of the justification principle In other words, even though there is no explicit regulation regarding obligation to give reasons, it is accepted that administrative acts are required to be justified because of the principle of the rule of law. In the light of these explanations, the obligation to give reasons, which does not fall within the implementation of Turkish Law very often while become an indispensable part of a modern administrative procedure, is tried to be examined in this study. Primarily, the definition of the obligation to give reasons, the relation between the reason and grounds for administrative act, and the basis of the obligation to give reasons are indicated. Following this, the functions of the obligation to give reasons, respectively, in terms of administrative, people who are subject to the administrative act and the judicial review, are addressed. Afterwards, the wording of the reasoning is touched upon. Under this title, after stated the requirement for reasoning to be explicit and clear, material and legal reasons and reasoning of administrative act based on discretion are mentioned. Finally, the obligation to give reasons and its breach in Turkish Law are evaluated.
    Keywords: Justification, Obligation to give reasons, Material and Legal Reasons, Separation of Justification and Reason in an Administrative Act, Breach of Obligation to give reasons.
    JEL: K30 K30 K30
  7. By: Shamena Anwar; Patrick Bayer; Randi Hjalmarsson
    Abstract: This paper uses data from the Gothenburg District Court in Sweden and a research design that exploits the random assignment of politically appointed jurors (termed nämndemän) to make three contributions to the literature on jury decision-making: (i) an assessment of whether systematic biases exist in the Swedish nämndemän system, (ii) causal evidence on the impact of juror political party on verdicts, and (iii) an empirical examination of the role of peer effects in jury decision-making. The results reveal a number of systematic biases: convictions for young defendants and those with distinctly Arabic sounding names increase substantially when they are randomly assigned jurors from the far-right (nationalist) Swedish Democrat party, while convictions in cases with a female victim increase markedly when they are assigned jurors from the far-left (feminist) Vänster party. The results also indicate the presence of peer effects, with jurors from both the far-left and far-right parties drawing the votes of their more centrist peers towards their positions. Peer effects take the form of both sway effects, where jurors influence the opinions of their closest peers in a way that can impact trial outcomes, and dissent aversion, where jurors switch non-pivotal votes so that the decision is unanimous.
    JEL: K0 K14 K4
    Date: 2015–05
  8. By: Ruth H. Bloch; Naomi R. Lamoreaux
    Abstract: The freedom of citizens to form voluntary associations has long been viewed as an essential ingredient of modern civil society. Our chapter revises the standard Tocquevillian account of associational freedom in the early United States by accentuating the role of state courts and legislatures in the creation and regulation of nineteenth-century American nonprofit corporations. Corporate status gave associations valuable rights that went beyond the basic right of individuals to associate. Government officials selectively used their power to grant and enforce corporate charters to reward politically favored groups while denying equivalent rights to groups they viewed as politically or socially disruptive.
    JEL: N11
    Date: 2015–05
  9. By: Bönke, Timm; Joachimsen, Beate; Schröder, Carsten
    Abstract: In many countries organized as federations, fiscal-equalization schemes have been implemented to mitigate vertical or horizontal imbalances. Such schemes usually imply that the member states of the federation can only partly internalize marginal tax revenue before redistribution. Aside from this internalized revenue, referred to as the marginal tax-back rate, the remainder is redistributed. We investigate the extent to which extent state-level authorities in such federation under-exploit their tax bases. By means of a stylized model we show that the member states have an incentive to align the effective tax rates on their residents with the level of the tax-back rate. We empirically test the model using state-level and micro-level taxpayer data, OLS regressions and natural experiments. Our empirical findings support the results from our theoretical model. Particularly, we find that states with a higher marginal tax-back rate exploit the tax base to a higher extent.
    Keywords: fiscal federalism,fiscal externalities,natural experiment,treatment analysis,statistical matching
    JEL: C21 H21 H77
    Date: 2015
  10. By: Jacques Pelkmans (Centre for European Policy Studies (CEPS), Brussels, Belgium); Andrea Renda (Centre for European Policy Studies (CEPS), Brussels, Belgium)
    Abstract: ‘Does EU regulation hinder or stimulate innovation’ is a frequently heard query in the EU, but there is little systematic analytical literature on the issue. Fragmented evidence or anecdotes dominate debates among EU regulatory decision-makers and in European business, insofar as there is a genuine debate at all. This text focuses on the multi-faceted, ambiguous and complex relationship between (EU) regulation and innovation in the economy, and discusses the innovation-enhancing potential of certain regulatory approaches as well as factors that tend to reduce incentives to innovate. We adopt an 'ecosystem' approach to both regulation and innovation and study the interactions between the two ecosystems. This general analysis and survey are complemented by seven case studies of EU regulation enabling and disabling innovation, two horizontal and five sectoral ones. The case studies are preceded by a broader contextual analysis of trends in EU regulation over the last three decades. These trends show the significant transformation of the nature as well as improvement of the quality of EU regulation, largely in the deepened internal market, which tend to have a favourable and lasting effect on the rate of innovation in the EU (other things being equal). Our findings include the following: Regulation can at times be a powerful stimulus to innovation. EU regulation matters at all stages of the innovation process. Different types of regulation can be identified in terms of innovation impact: general or horizontal, innovation specific and sector-specific regulation. More prescriptive regulation tends to hamper innovative activity, whereas the more flexible EU regulation is, the better innovation can be stimulated. Lower compliance and red-tape burdens have a positive effect on innovation. We recommend incorporating a specific test on innovation impacts in the ex-ante impact assessment of EU legislation as well as in ex-post evaluation. There is ample potential for fostering innovation by reviewing the EU regulatory acquis.
    Keywords: EU regulation, innovation in economy
    JEL: D02 D23 G38 K23 L51
  11. By: Auriol, Emmanuelle; Biancini, Sara; Paillacar, Rodrigo
    Abstract: The paper studies developing countries' incentives to protect intellectual property rights (IPR). IPR enforcement is U-shaped in a country's market size relative to the aggregated market size of its trade partners: small/poor countries protect IPR to get access to advanced economies' markets, while large emerging countries tend to free-ride on rich countries' technology to serve their internal demand. Asymmetric protection of IPR, strict in the North and lax in the South, leads in many cases to a higher level of innovation than universal enforcement. An empirical analysis conducted with panel data covering 112 countries and 45 years supports the theoretical predictions.
    Keywords: developing countries; imitation; innovation; intellectual property rights; oligopoly; trade policy
    JEL: F12 F13 F15 L13 O31 O34
    Date: 2015–05
  12. By: Diaz-Serrano, Luis (Universitat Rovira i Virgili); Meix-Llop, Enric (Universitat Rovira i Virgili)
    Abstract: The recognition of homosexual rights is a controversial issue in many countries. Spain was the third country in the world (after Netherlands and Belgium) to introduce a law recognizing homosexual marriage and adoption of children. In this paper, we examine for the first time whether schools are more hesitant to give feedback to homosexual parents during children's pre-registration period in Spain. In order to do that, we designed an internet field experiment to be conducted in schools. We created three types of fictitious couples; one heterosexual, one male homosexual and one female homosexual, and send emails to schools making sexual orientation explicit. Our results show that men homosexual couples had a significant lower probability to receive and answer than heterosexual couples (22.5 percentage points less). No statistically significant differences in the response rate were found between female homosexual and heterosexual couples. This result suggests that male homosexual couples might be penalized because of the lack of a maternal figure.
    Keywords: discrimination, field experiment, schools, homosexual rights
    JEL: H41 I20 K36
    Date: 2015–05

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