nep-law New Economics Papers
on Law and Economics
Issue of 2016‒05‒08
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Effects of the Alabama HB 56 Immigration Law on Crime: A Synthetic Control Approach By Zhang, Yinjuejie; Palma, Marco; Xu, Zhicheng
  2. Comparative analysis from qualified law: France, Spain and Hungary By Boldizsár Artúr Szentgáli-Tóth
  3. Balanced budget rules and fiscal outcomes: Evidence from historical constitutions By Asatryan, Zareh; Castellon, Cesar; Stratmann, Thomas
  4. Is more competition always better? An experimental study of extortionary corruption By Dmitry Ryvkin; Danila Serra
  5. INTIMATE PARTNER VIOLENCE IN THE GREAT RECESSION By Daniel Schneider,; Sara McLanahan; Kristen Harknett
  6. Usury laws and Private Credit in Lima, Peru. Evidence from notarized contracts By Luis Felipe Zegarra
  7. Tort Liability and Settlement Failure: Evidence on Litigated Auto Insurance Claims By Danial Asmat; Sharon Tennyson
  8. Right to the City or Urban Commoning? Thoughts on the Generative Transformation of Property Law By Ugo Mattei; Alessandra Quarta
  9. High Times: The Effect of Medical Marijuana Laws on Student Time Use By Chu, Yu-Wei Luke; Gershenson, Seth
  10. Child Access Prevention Laws, Youth Gun Carrying, and School Shootings By Anderson, D. Mark; Sabia, Joseph J.

  1. By: Zhang, Yinjuejie; Palma, Marco; Xu, Zhicheng
    Abstract: The act of Alabama HB 56, passed in 2011 is considered to be the strictest anti-illegal immigration bill in the United States. This paper evaluates the impact of this policy on crime, by using the synthetic control method to create a counterfactual Alabama. The results provide suggestive evidence of heterogeneous causal effects of Alabama HB 56 on crime. Compared to the synthetic group, the violent crime rate increased as a response to Alabama HB 56, while there was no significant change in property crime rate after the act. A placebo test was also performed to demonstrate the robustness of the results.
    Keywords: anti-illegal immigrant law, Alabama, crime, synthetic control, Labor and Human Capital, Public Economics, J15, J61, K37,
    Date: 2016–02–09
  2. By: Boldizsár Artúr Szentgáli-Tóth (Eötvös Loránd University, Budapest)
    Abstract: During the last decades, several countries have entrenched a special subcategory of law, which is adopted by stricter procedural rules, than the requirements of the ordinary legislative process. These laws are enacted by qualified majority, by the consent of the two chambers of the legislation, they are subject to mandatory constitutional review before their promulgation, or additional safeguards are implemented in the ordinary legislative process. In my article, I would compare the experiences of three legal systems, France, Spain, and Hungary, which provide three different frameworks of qualified law. Nevertheless, I would provide further examples from Europe , Africa and Latin America to demonstrate better the diversity of legal concepts. My aim is to identify the most contested issues from the legal nature of qualified laws, and to seek the proper solutions of these issues, as well as an ideal model of qualified law.-Firstly, on the ground of different national experiences, I would seek for a broadly acceptable definition of qualified law. -Secondly, I would briefly compare the historical background of the three emerges. An important common point would be the role of qualified laws during any process of democratic transition.-Thirdly, the scope of qualified law differs significantly from country to country, consequently, I would continue with this issue by arguing for a narrower scope of qualified law. -Fourthly, qualified law may have a special position in the hierarchy of norms, somewhere between statutory and the constitutional level, so I would cover this aspect. I would focus on the level of precision of constitutional articles in this regard.-Furthermore, the separation of powers perspective of qualified laws would be taken into consideration: the neglect of two-third majority, and the mandatory a priory review.-As the main outcome, certain points would be highlighted for a potential constitution-drafting process.
    Keywords: Qualified law, organic law, cardinal law, democratic transition, comparative analysis, hierarchy of norms, constitutional bloc
    JEL: K10 K40
  3. By: Asatryan, Zareh; Castellon, Cesar; Stratmann, Thomas
    Abstract: This paper studies the long-run fiscal consequences of balanced budget rules (BBR) that are enshrined in a country's constitution. Using historical data dating back to the 19th century and applying a difference-in-difference approach we find that the introduction of a constitutional-BBR reduces government debt-to-GDP and expenditure-to-GDP ratios, on average, by around 11 and 3 percentage points, respectively. We do not find evidence that BBRs affect tax revenues. Our analysis indicates that such rules reduce the probability of experiencing a debt crisis and that the effective enforcement of BBRs can be conditional on the quality of democratic institutions. In addition, we implement an instrumental variable approach by instrumenting the probability of having budget rules on de jure constraints on changing the constitution. This and other tests suggest that the relations we find are largely causal going from BBRs to fiscal outcomes.
    Keywords: economic effects of constitutions,fiscal rules,historical public finances,sovereign debt crises
    JEL: H50 H60 K10 N40
    Date: 2016
  4. By: Dmitry Ryvkin (Department of Economics, Florida State University); Danila Serra (Department of Economics, Southern Methodist University)
    Abstract: We test the effectiveness of an anti-corruption policy that is often discussed among practitioners: an increase in competition among officials providing the same good or service. In particular, we investigate whether an increase in overlapping jurisdictions reduces extortionary corruption, i.e., bribe demands for the provision of services that clients are entitled to receive. We overcome measurement and identification problems by addressing our research question in the laboratory. We conduct an extortionary bribery experiment where clients apply for a license from one of many available offices and officials can demand a bribe on top of the license fee. By manipulating the number of available offices and the size of search costs we are able to assess whether increasing competition reduces extortionary corruption. We find that, if search costs are unaffected, increasing the number of providers may actually increase corruption. In particular, our results show that increasing competition has either no eeffect (if search costs are high) or a positive effect (if search costs are low) on bribe demands. We compare our findings to those obtained in a standard market environment and find evidence of different search behaviors in the two settings.
    Keywords: competition, extortionary corruption, experiment
    JEL: D73 D49 C91
    Date: 2015–10
  5. By: Daniel Schneider, (University of California - Berkeley/UCSF); Sara McLanahan (Princeton University); Kristen Harknett (University of Pennsylvania)
    Abstract: In the United States, the Great Recession has been marked by severe negative shocks to labor market conditions. In this study, we combine longitudinal data from the Fragile Families and Child Wellbeing Study with Bureau of Labor Statistics data on local area unemployment rates to examine the relationship between adverse labor market conditions and intimate partner violence between 1999 and 2010. We find that rapidly worsening labor market conditions are associated with increases in the prevalence of violent/controlling behavior in marriage. These effects are most pronounced among whites and those with at least some post-secondary education. Worsening economic conditions significantly increase the risk that white mothers and more educated mothers will be in violent/controlling marriages rather than high quality marital unions.
    Keywords: Recession, Uncertainty, Intimate Partner Violence, Gender
    Date: 2014–05
  6. By: Luis Felipe Zegarra (CENTRUM Católica Graduate Business School)
    Abstract: This article analyzes the effects of usury laws in the credit market of Lima in 1825-49. By relying on a sample of more than 1,100 notarized records, the article shows that the repeal of colonial anti-usury laws in early 1833 led to the increase in interest rates and to a greater access to credit. Furthermore, lenders made loans with greater maturities after the repeal of usury laws.
    Keywords: Mortgage credit, usury laws, interest rates, access to credit, Latin America
    JEL: N2 N26 N46 K1
    Date: 2016–03
  7. By: Danial Asmat (Economic Analysis Group, U.S. Department of Justice); Sharon Tennyson (Cornell University, Department of Policy Analysis & Management)
    Abstract: This paper empirically tests the predictions of the Priest-Klein model of pre-trial bargaining. It exploits variation in tort liability for bad faith insurance law across states and time during two decades of evolving law from the 1970s to the 1990s. Using repeated cross-sectional datasets of auto insurance claims from the Insurance Research Council, it nds evidence consistent with the hypothesis that variance in parties' subjective estimates of trial outcomes drove the likelihood of settlement. The likelihood of trial for an average claim is estimated to have risen by over 20% in the initial years following reform among the rst group of states to enact the tort remedy. Trial rates among tort states thereafter declined through the sample, dropping over 10% below control states by 1997. A similar relationship is estimated for the likelihood of a lawsuit being led, and characteristics of litigated claims are consistent with a di erent subset of claims being disputed following regime change. Results are robust to sample selection bias, endogeneity in settlement time, and other state-level legislation on punitive damages limits and prejudg- ment interest. While there is limited evidence for the predictions of asymmetric information models of settlement, we conclude that policyholders and insurers negotiated in a manner consistent with divergent expectations.
    Date: 2016–01
  8. By: Ugo Mattei (UC Hastings, University of Turin & IUC Turin); Alessandra Quarta (University of Turin & IUC Turin)
    Abstract: The economic and political transformations determined by the rise of neoliberalism are usually studied at a state dimension, while the urban one is quite ignored. Nevertheless, the government of the city has been influenced by global and national recent changes and all the municipal sectors have been touched by the austerity's recipe. The decrease of urban public spaces, their privatizations as well as gentrification transform city planning that is often unable to elaborate alternative solutions against the overexploitation of the urban territory and the increase of inequalities caused by economic crisis. In a city, after all, it is impossible to hide inequalities and injustices. In the last years, cities have often been the theater of political struggles against the privatization of public spaces, evictions and the dissolution of the urban welfare. In many cases, the demonstrators have occupied parks or abandoned buildings (theatre, condominiums...), and used them to find a temporary solution to their different needs (housing, social space, new forms of work, urban gardens...). They denounce the great number of public or private empty spaces (for instance, the abandoned infrastructures left by the process of de-industrialization) and their neglect. According to the right to the city they claim, the inhabitants have to produce urban spaces starting from their own needs: empty spaces become an opportunity, the urban care is a collective task. This approach shares the logic of the commons, which reclaims a new paradigm based on inclusion, participation and social and ecological use of resources: according to many scholars, also urban spaces are commons. After a description of this wide context, the article explores the connection between commons and the right to the city.
    Keywords: urban commons, right to the city, privatization, grassroots action, neoliberalism
    JEL: B59 K11 O18 P48
    Date: 2015–12
  9. By: Chu, Yu-Wei Luke (Victoria University of Wellington); Gershenson, Seth (American University)
    Abstract: Twenty-three states and the District of Columbia have passed medical marijuana laws. Previous research shows that these laws increase marijuana use among adults. In this paper, we estimate the effects of medical marijuana laws (MML) on secondary and post-secondary students' time use using time diaries from the American Time Use Survey. We apply a difference-in-differences research design and estimate flexible fixed effects models that condition on state fixed effects and state-specific time trends. We find that on average, part-time college students in MML states spend 42 fewer minutes on homework, 37 fewer minutes attending class, and 60 more minutes watching television than their counterparts in non-MML states. However, we find no effects of MMLs on secondary or full-time college students. These results provide evidence on the mechanisms through which marijuana use affects educational outcomes, young peoples' behavioral responses to MMLs (and reduced costs of obtaining marijuana), and that the impact of MMLs on student outcomes are heterogeneous and stronger among disadvantaged students.
    Keywords: time use, medical marijuana, unintended consequences
    JEL: I18 K32 K42
    Date: 2016–04
  10. By: Anderson, D. Mark (Montana State University); Sabia, Joseph J. (San Diego State University)
    Abstract: Despite intense public interest in keeping guns out of schools, next to nothing is known about the effects of gun control policies on youth gun carrying or school violence. Using data from the Youth Risk Behavior Surveys (YRBS) for the period 1993-2013, this study is the first to examine the relationship between child access prevention (CAP) gun controls laws and gun carrying among high school students. Our results suggest that CAP laws are associated with a 13 percent decrease in the rate of past month gun carrying and an 18 percent decrease in the rate at which students reported being threatened or injured with a weapon on school property. In addition, we find that CAP laws are associated with a lagged decline in the probability that students miss school due to feeling unsafe. These results are concentrated among minors, for whom CAP laws are most likely to bind. To supplement our YRBS analysis, we collect a novel dataset on school shooting deaths for the period 1991-2013. We find that while CAP laws promote a safer school environment, they have no observable impact on school-associated shooting deaths.
    Keywords: gun control, youth risky behavior, school violence
    JEL: K4 I2 H7
    Date: 2016–03

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