nep-law New Economics Papers
on Law and Economics
Issue of 2015‒11‒01
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The local determinants of crime victimization By Camille Hemet
  2. Judiciary efficiency and trade in tasks By Antonio Accetturo; Andrea Linarello; Andrea Petrella
  3. Damages in a Consumer Sale Contract: Reviewing the Consumer Protection Bill, 2015 By Pathak, Akhileshwar
  4. City of God Redux: Inequality, Migration, and Violent Crime in Brazil between 1980 and 2000 By Tiago Freire
  5. Better than nothing? : dowry in the absence of the legal protection of women's inheritance rights By Makino, Momoe
  6. The French Bar and the Emerging Legal Profession in Russia By Elizaveta Blagodeteleva
  7. Cartels: a Good or a Bad Strategy? By Pop, Izabela Luiza
  8. Commuting Time and Urban Violence in Brazil By Raul Silveira Neto; Klebson Moura
  9. Asymmetric information as a barrier to knowledge spillovers in expert markets By Feser, Daniel; Proeger, Till
  10. 'Two decades after the war' - the management of international commons By Manuel Coelho

  1. By: Camille Hemet
    Abstract: This paper explores the determinants of crime victimization at the neighborhood level, using data from the French victimization survey. The very local nature of the data enables me to tackle the endogenous location selection issue: once I control for the characteristics of a larger area into which household select their location, the remaining variation of observables across neighborhoods within this larger area can be considered as exogenous. The contribution of this paper to the economics of crime literature is then twofold. First, I show that neighborhood characteristics are important determinants of crime victimization. In particular, local unemployment rate is found to be one of the most important factor explaining victimization. Second, I take advantage of the precise localization of the data to adopt a spatial approach, comparing the effect of unemployment rate in the reference neighborhood and in adjacent neighborhoods. The results support the idea that criminals are mobile across neighborhoods for more serious economic crimes, in line with the Beckerian theory of crime, but that petty crimes and vandalism do not involve any mobility, relating to the social disorganization theory.
    Keywords: crime; neighborhood effects; unemployment; urban and spatial economics
    JEL: K42 R23 J64
    Date: 2015–10
  2. By: Antonio Accetturo; Andrea Linarello; Andrea Petrella
    Abstract: In this paper, we study how contract enforcement at the local level affects a firm's ability to supply customised intermediate inputs to foreign firms. Using Italian firm-level data, we show that firms located in courts with higher judicial trial length in civil disputes, which is our measure of contract enforcement, are less likely to supply customised inputs to foreign firms. The effect is stronger in contact-intensive sectors. In our empirical exercise we take advantage of two important characteristics of the Italian legal system. First, law determines the courts for disputes. This corresponds to the court where the plant is located. Trial length varies from less than one year in the most efficient court to more than seven years in the least efficient one. We observe large heterogeneity despite the fact that law should be uniformly applied over the country. Second, the Italian law codifies a specific contract type for the supply of customised intermediate inputs (contratto di subfornitura). This contract is widely used in the Italian context (Lazerson, 1999). In our data, firms report if they supply intermediate inputs to foreign customers under this type of contract. We deem it to be a very good approximation of the firm-to-firms relations in a Global value chain. We find that, when firms are located in inefficient courts, the probability to supply intermediate inputs abroad decreases. The effect are stronger for firms that operate in industries that are contract intensive. Following Nunn (2007), for each industry we measure contract intensity as the share of products that are not sold on organised markets according to the Rauch (1999) classification. We find that a standard deviation increase in trial length decreases the probability to supply customised inputs by 1.7 to 3 percentage points in industries at the 25th and 75th percentile of contract intensity, respectively.
    Keywords: Local institutions; global value chains; local competitiveness
    JEL: F10 F14 L14
    Date: 2015–10
  3. By: Pathak, Akhileshwar
    Abstract: Consumer protection law rests on the foundations of contract law and the law of sale of goods. A consumer law has to conceptually express this foundation and the modifications it is bringing about in these laws. Without this, the law would become unclear, conflicting and confusing. In this respect, the Consumer Protection Bill, 2015 is not secured in its foundation and needs revision. The paper reviews the rights of the consumer (buyer) to receive damages for breach by the seller. The bill recognises only repair and replacement as damages for the consumer. For claiming other damages, the consumer must establish negligence by the seller. The principle of contract law, to the contrary, is that for every breach, irrespective of the intention or diligence, the seller has to pay damages to the buyer. The bill has mixed up contractual damages with damages under the law of torts. In sale contracts, consequential damages arising from defective goods are readily recognised. The bill should recognise this. The paper, reviewing the law, develops draft provisions on the theme. The draft provisions are in the annexure to the paper.
  4. By: Tiago Freire
    Abstract: There is a long-held belief that inequality is a major determinant of violent crime, particularly homicides. Some previous studies suggest that these results hold in the short term only. This could result from measurement error in income inequality. This study addresses the issue of measurement error in inequality by using the relationship between migration and inequality. Using rainfall shocks and changes in transport costs as exogenous sources of out-migration from rural areas in Brazil between 1980 and 2000, the study shows how migration from rural areas affects income inequality in urban areas. It finds that not only is there a negative and statistically significant relationship between inequality and crime in Brazil, and that the effects are much larger than previously thought, but also that this relationship holds in the long term.
    Keywords: Crime; Inequality; Rural?Urban Migration; Brazil
    JEL: J61 J15 K42 R10
    Date: 2015–10
  5. By: Makino, Momoe
    Abstract: The practice of dowry is often thought to be the root cause of the unequal treatment of women in India. For women without inheritance rights, however, dowry may function as their only source of protection. Using a nationwide dataset and exploiting a natural experimental situation, this study explores the effects of dowry on women's empowerment in India, a society where women do not have inheritance rights. In such a society, dowry seems to enhance women's status in the marital household. The effects reverse when women have equal inheritance rights as their brothers. Empirical analysis suggests that the outright ban on dowry that ignores the context may not necessarily benefit women.
    Keywords: India, Women, Social customs, Property law, Marriage, Dowry, Inheritance rights, Amendment
    JEL: J12 J16 K11 N35 Z13
    Date: 2015–10
  6. By: Elizaveta Blagodeteleva (National Research University Higher School of Economics)
    Abstract: The complex and seemingly inconsistent use of the social vocabulary has been on the research agenda of those who study the Russian Empire for quite some time. Historians have long believed that the indiscriminate use of such terms as “estate” (“soslovie”) and “corporation” reflected Russian backwardness and eventually impeded further social and economic development, especially when it came to professional groups. The paper examines this assumption by focusing on the terminology deployed for the designation of Russian lawyers, in comparison to their French counterparts. Therefore, it dwells at length on the references to the French Bar in the bureaucratic discussion and in current press at the time of drafting the basic principles of the future Bar organization in Russia between 1857 and 1864. The comparison of the two sets of references provided plenty of evidence that the French notion of the estate (l'ordre des avocats) had a dramatic impact on the interpretation of Russian soslovie of legal practitioners. The French model seemed to spur social imagination and eventually helped Russian political and intellectual elites envisage a new type of social organization encompassing free, well-educated and politically engaged men.
    Keywords: Russian Empire, France, legal profession, lawyers, the Bar, estate, estate paradigm
    JEL: Z
    Date: 2015
  7. By: Pop, Izabela Luiza
    Abstract: Any organization should seek the efficiency maximization, namely the achievement of an effect/effort ratio as high as possible. In order to apply this economic ground rule, some companies use strategies based on gaining a competitive advantage over competitors. In contrast, other companies choose lighter options to increase profitability. They apply strategies focused on agreements with competitors that aim to maintain prices at a certain level regardless of economic factors governing the market mechanism. The purpose of this paper is to highlight the positive and negative effects of cartels as a management strategy. In this regard, the first part of the article summarizes the most important theories about cartels and their characteristics, while the second part presents some European and Romanian cartels, based on data provided by the European Commission and the Competition Council. The final part presents the most important findings and conclusions but also some recommendations for future research.
    Keywords: cartels, competition, strategies, development, price
    JEL: L10 L12 M10 M21
    Date: 2015–06
  8. By: Raul Silveira Neto; Klebson Moura
    Abstract: Empirical evidence about the influence of exposure to public spaces on victimization strongly support the routine activities theory but, maybe reflecting the difficult of available data, specific evidence about the influence of the commuting on probability of victimization is not abundant. As registered by United Nation Office on Drugs and Crimes (UNODOC, 2012), Brazil is one of the most violent country of the world, with homicide rates around 27.1 (homicides per one hundred thousand people) in 2011, the third highest rate among Latin America countries (behind of only Colombia and Venezuela). This situation, in fact, reflect a general situation of high violence related to other kinds of crime in the country; as related to the violence associated to robbery, for example, the numbers of UNDOC (2012) for 2010 put Brazil, with rates (occurrences per one hundred thousand) of robbery and of theft among the three most violent Latin American Countries. But the problem of urban violence is neither the only substantive urban problem of Brazilian big urban centers, nor it is dissociated to other urban problems in these centers. Besides the risk of being victim of urban violence, visitors or inhabitants of Brazilian metropolitan regions must face with the problem of low mobility in these cities. The very bad quality of public transport together with public indirect subsidies for using individual transport make short distance locomotion a very high time demand action (IPEA, 2013). According to the more recent information of PNAD (PNAD 2012), the average commuting time for the inhabitant of Brazilian metropolitan regions was around 40.8 minutes in 2012, a very high number if compared to metropolitan regions around the world (Pereira and Schwanen, 2013; Silveira Neto et al. 2014). In this paper, we analyze this relationship using a large nationally representative cross-section sample of Brazilian individuals for 2009 using more traditional multivariate regressions and propensity score matching techniques to create counterfactuals. We also perform robustness checks, by applying different estimators (Abadie and Imbens, 2002), and implement a simulation-based sensitivity analysis that supports a causal interpretation of the results (Ichino wt al. 2008). We find that individuals with more than one hour of commuting have an overall 2.1% increase in the probability of being victim of robbery, with no robust impact on theft. Also, following the exposure literature we find larger effect on the probability of robbery victimization on women when compared with men, 2.5% and 2.2% respectively.
    Keywords: commuting; urban violence; treatment effect
    JEL: C21 K49
    Date: 2015–10
  9. By: Feser, Daniel; Proeger, Till
    Abstract: This paper investigates barriers to effective knowledge spillovers for markets in which the product can be characterized as a credence good, i.e. its complexity impedes the evaluation of quality by customers both ex-ante and ex-post. We focus on the German market for energy efficiency consultants, as an emerging and subsidized sector in which the service offered has strong credence good properties. Based upon in-depth interviews with stakeholders, we analyze the determinants and barriers to knowledge spillovers. We find that the incentive to foster spillovers to increase suppliers´ knowledge is limited by the difficult commercialization of additional capabilities. The implementation of a public certification scheme has failed to increase the sectoral knowledge spillovers. By contrast, the participation in formal knowledge networks has been more effective in prompting companies to foster knowledge spillovers, which has also led to a higher degree of specialization. We conclude that access to certification schemes should be further restricted to increase market transparency and private networks should be supported to achieve the aim of increasing knowledge spillovers.
    Keywords: credence goods,knowledge spillover theory of entrepreneurship,network
    JEL: D21 D82 H41 K23 L14
    Date: 2015
  10. By: Manuel Coelho
    Abstract: Memory is important, also for Economics. The ephemeris can be used not only as moments of who relives the past in a single-rewind-perspective but of those who use these occasions to reflect on the past and to project the future from it. 1995 was a special year for fisheries in Portugal. Never before and never again, was the sector so under the eye of the media. First pages every day journals, opening in the TV daily informative programs?, and that, for more than three months. A unique scenario... The cause was a fish war in the NAFO area, between Spain and Canada, about a species, the turbot, that put also the Portuguese in a big tension. Two decades after the war, our proposal goes through resume the so-called turbot war and, from it, to reflect on its causes, how the problems were solved and to outlook for the guidelines of future research. Our paper therefore has the following structure. In the first and second points, the original problems of High Sea fisheries management and how they reflected in practice in the turbot war, are presented. In section 3 we reflect on how the problem was solved. Theoretically we shortly review the basic results of the literature on this issue, in particular those arising from the usual combination of the basic model of fisheries management with Game Theory. In empirical terms we draw attention to the diplomatic efforts between the EU and Canada to overcome disagreements that led to war and to promote a cooperative agreement that would avoid the problem of overfishing on the High Sea. The rationale and substance of the 1995 UN Agreement on Transboundary Resources and Highly Migratory Species, its strengths and weaknesses, is presented and discussed. Finally, in Section 4, the paper reflects on the theoretical and practical issues that still pose important questions to this problematic and ask for some perspectives on future developments.
    Keywords: turbot war; hgh sea; management
    JEL: K00 Q00
    Date: 2015–10

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