nep-law New Economics Papers
on Law and Economics
Issue of 2016‒01‒18
eight papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Recognition and legal Forms of Social Enterprises in Europe: A Critical Analysis from a Comparative Law Perspective By Antonio Fici
  2. Better at Home than in Prison ? The Effects of Electronic Monitoring on Recidivism in France By Anaïs Henneguelle; Benjamin Monnery; Annie Kensey
  3. Measuring the Effectiveness of Anti-Cartel Interventions: A Conceptual Framework By Yannis Katsoulacos; Evgenia Motchenkova; David Ulph
  4. The Concept of Law: A Brief Introduction to Jural Aspects of Classical Eurasianism By Bulat V. Nazmutdinov
  5. Sharia Courts: Modern Practice and Prospectives in Russia By Leonid R. Sykiainen
  6. Psychology of Trust: A Three Component Analytical Framework to Explain the Impact of Formal Institutions on Social Trust Formation By Tamilina, Larysa; Tamilina, Natalya
  7. Legal Advice and Evidence with Bayesian and non-Bayesian Adjudicators By Che, Yeon-Koo; Severinov, Sergei
  8. Violent Conflicts and Economic Performance of the Manufacturing Sector in India By Takahiro Sato; Atsushi Kato

  1. By: Antonio Fici
    Abstract: Social enterprise lawmaking is a growth industry. In the United States alone, over the last few years, there has been a proliferation of state laws establishing specific legal forms for social enterprises. The situation is not different in Europe, where the process began much earlier than in the United States and today at least fifteen European Union member states have specific laws for social enterprise. This article will describe the current state of the legislation on social enterprise in Europe, inquiring into its fundamental role in the development of the social economy and its particular logics as distinct from those of the for-profit capitalistic economy. It will explore the models of social enterprise regulation that seem more consistent with the economic growth inspired by the paradigms of the social economy. It will finally explain why, in regulating and shaping social enterprise, the model of the social enterprise in the cooperative form is to be preferred to that of the social enterprise in the company form.
    Keywords: Social enterprise; Social economy; Cooperatives; Comparative law; Non-profit corporate governance
    JEL: K22 L31
    Date: 2015
  2. By: Anaïs Henneguelle (Ecole Normale Supérieure, Cachan ; CNRS (UMR 8533), IDHES); Benjamin Monnery (Université de Lyon, Lyon, F-69007, France ; CNRS, GATE Lyon St Etienne,F-69130 Ecully, France); Annie Kensey (Ministère de la Justice - DAP (PMJ5); CNRS, CESDIP)
    Abstract: Many countries have recently adopted electronic monitoring (EM) as an alternative sentence in order to reduce incarceration while maintaining public safety. However, the empirical evidence on the effects of EM on recidivism (relative to prison) is very scarce worldwide. In this paper, we adress this debated question using quasi-experimental data from France. Our empirical strategy exploits the incremental roll-in of electronic monitoring in France, which started as a local experiment in four courts in 2000-2001, and was later adopted by more and more courts (2002-2003). Our IV estimates show that fully converting prison sentences into electronic monitoring has long-lasting beneficial effects on recidivism, with estimated reductions in probability of reconviction of 6-7 percentage points (9-11%) after five years. There is also evidence that, in case of recidivism, EM leads to less serious offenses compared to prison. These beneficial effects are particularly strong on electronically monitored offenders who received control visits at home from correctional officers, were obliged to work while under EM, and had already experienced prison before. This pattern suggests that both rehabilitation and deterrence are important factors in reducing long-term recidivism, and that electronic monitoring can be a very cost-effective alternative to short prison sentences. However, the massive development of EM in France in recent years, with shorter and less intensive supervision, may reduce its effectiveness.
    Keywords: economics of crime, prison, electronic monitoring, recidivism
    JEL: K42
    Date: 2016
  3. By: Yannis Katsoulacos (Athens University of Economics and Business, Athens, Greece); Evgenia Motchenkova (VU University Amsterdam, the Netherlands); David Ulph (University of St Andrews, St Andrews, Fife, Great Britain)
    Abstract: This paper develops a model of the birth and death of cartels in the presence of enforcement activities by a Competition Authority (CA). We distinguish three sets of interventions: (a) detecting, prosecuting and penalizing cartels; (b) actions that aim to stop cartel activity in the short-term, immediately following successful prosecution; (c) actions that aim to prevent the re-emergence of prosecuted cartels in the longer term. The last two intervention activities have not been analyzed in the existing literature. In addition we take account of the structure and toughness of penalties. In this framework the enforcement activity of a CA causes industries in which cartels form to oscillate between periods of competitive pricing and periods of cartel pricing. We determine the impact of CA activity on deterred, impeded, and suffered harm. We derive measures of both the total and the marginal effects on welfare resulting from competition authority interventions and show how these break down into measures of the Direct Effect of interventions (i.e. the effect due to cartel activity being impeded) and two Indirect/Behavioral Effects – on Deterrence and Pricing. Finally, we calibrate the model and estimate the fraction of the harm that CAs remove as well as the magnitude of total and marginal welfare effects of anti-cartel interventions.
    Keywords: Antitrust Enforcement; Antitrust Law; Cartel; Oligopoly; Repeated Games
    JEL: L4 K21 D43 C73
    Date: 2016–01–07
  4. By: Bulat V. Nazmutdinov (National Research University Higher School of Economics)
    Abstract: Jurists and historians have rarely highlightened jural aspects of classical Russian Eurasianism. There have been several attempts to describe Eurasianist jural philosophy as a coherent system, but they were not fully relevant to the source material. The paper focuses on problems in the background of the creation of holistic Eurasianist jurisprudence during 1920s and 1930s. It emphasizes that the complexity of this process depended on different institutional and especially conceptual terms. The Eurasianists displayed several different approaches to Law whose distinctions were based on metajuridical grounds – phenomenological ideas in the work of Nickolai Alekseev, who argued for legal individualism; the “Alleinheit” theory found in the writings of Lev Karsavin; and a positivist theory in paper by Nickolai Dunaev. Based on published works of Eurasianists and unpublished archival materials, this research concludes that these juridical views were contradictory. These contradictions meant it was impossible to create a coherent Eurasianist jural theory using the terms derived from the authors mentioned, despite the fact that Eurasianist views have some specific characteristics
    Keywords: Eurasianism, ideocracy, legal order, legal theory, legal philosophy, legal schools, Natural Law, phenomenology, Russian philosophy.
    JEL: K10
    Date: 2015
  5. By: Leonid R. Sykiainen (National Research University Higher School of Economics)
    Abstract: This article touches on the fundamental principles of Sharia judiciary, the modern practice of Sharia court activity in Muslim and Western countries and their establishment and functioning in Russia. The place which Sharia courts occupied in the judicial system of the Muslim state during middle ages, the general historical evolution of Sharia justice institutions and the role played by modern Sharia courts in Muslim countries, which depends on the place which Islamic Sharia occupies in their legal systems, are shown. The Sharia model of judiciary has been known in Western countries from the middle ages and today Sharia courts are still functioning in some of them. In Russia, Sharia institutions of dispute resolution were created in the 19th century. They existed in some forms until the end of the 1920s. After that, while they still existed, their decisions did not have any legal force. From the 1990s, Sharia courts began to re-emerge in Russia as religious or civil structures. Russian legislation provides the legal basis for establishing Sharia institutions of dispute resolution in the form of arbitration courts or mediation structures. Such institutions can be an alternative to illegal Sharia courts, and they could assist securing legal fundamentals and values within the Russian Muslim community
    Keywords: Sharia, Sharia courts, fiqh, legal doctrine, adat, Arbitration Act, arbitration tribunal, alternative methods of dispute resolution, mediation.
    JEL: K40
    Date: 2015
  6. By: Tamilina, Larysa; Tamilina, Natalya
    Abstract: Drawing on a social-cognitive theory of psychology, this study introduces a new conceptual framework to explain trust building by individuals and the role that formal rules and laws may play in this process. Trust is viewed as composed of cultural, communal, and contextual components, with the latter encompassing formal institutions. We demonstrate that the contextual component measured through three institutional indexes is the strongest predictor of social trust that may not only condition the importance of cultural and communal components for the process of trust formation, but also trigger changes in them. We also furnish evidence that this impact may vary across formal institutional types and suggest that the autonomy dimension of the institutional framework is particularly important for social trust building.
    Keywords: interpersonal trust, trust formation, formal institutions, social-cognitive psychology
    JEL: K40 Z13
    Date: 2015–02–10
  7. By: Che, Yeon-Koo; Severinov, Sergei
    Abstract: We examine the effect of legal advice on the evidence that reaches the court and thernoutcome of adjudication, and highlight how the adjudicator should allocate thernburden of proof in light of these effects. rnDespite lawyers'rnexpertise in assessing the evidence, their advice is found to havernno effect on adjudication if the lawyers follow the strategies of disclosingrnall favorable evidence, irrespective of whether the adjudicator is Bayesian or rnnon-Bayesian. A lawyer's advice can influence the outcome to his client's favor,rneither if (s)he can credibly advise his client to suppress some favorable rnevidence or if legal advice is costly. The effect is socially undesirable in the rnformer case, but it is desirable in the latter case. rnWe also show that social welfare may be increased by regulating the inferencesrnthat adjudicators are allowed to make. Our results provide a general perspective rnfor understanding the role of private information and expert advice in disclosure.
    Keywords: Legal advice, disclosure of evidence, adjudication of disputes, regulating adjudicators' inferences
    Date: 2015–12–31
  8. By: Takahiro Sato (Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan); Atsushi Kato (School of Business, Aoyama Gakuin University)
    Abstract: We investigate the effects of violent conflicts on the economic performance of manufacturing sector of Indian regional states. The number of violent conflicts, the number of deaths and the number of participants in violent conflicts all have negative impacts on gross value added and capital labor ratio of manufacturing sector. Among violent conflicts, ethnic and religious conflicts, as well as those nested in a large conflict have significantly negative impacts.
    Keywords: Violent conflict, Gross value added, Capital labor ratio, Ethnic conflict, Religious conflict, Nested conflict
    JEL: D74 K42 O43 R3 L2
    Date: 2016–01

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