nep-law New Economics Papers
on Law and Economics
Issue of 2018‒05‒07
fifteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Transparent Selection of Judges for EU Courts: Complaint to the European Ombudsman By Shalaby, Omar; Alemanno, Alberto; Eriksson, Anastasia; Li, Mingzhu; Morrow, Paige
  2. Competition agency guidelines and policy initiatives regarding the application of competition law vis-à-vis intellectual property: An analysis of jurisdictional approaches and emerging directions By Anderson, Robert D.; Chen, Jianning; Müller, Anna Caroline; Novozhilkina, Daria; Pelletier, Philippe; Sen, Nivedita; Sporysheva, Nadezhda
  3. Property rights on First Nations' reserve land By Aragon, Fernando; Kessler, Anke
  4. Does Tax Evasion Affect Economic Crime? By Amedeo Argentiero; Bruno Chiarini; Elisabetta Marzano
  5. Market Contestability and Bribe Solicitations: Evidence Across Stages of Firms' Operations By Rajeev K. Goel; Ummad Mazhar; James W. Saunoris
  6. New evidence on determinants of IP litigation: A market-based approach By Czarnitzki, Dirk; van Criekingen, Kristof
  7. Can public and private sanctions discipline politicians? Evidence from the French Parliament By Maxime Le Bihan; Benjamin Monnery
  8. Do Patent Assertion Entities Harm Innovation? Evidence from Patent Transfers in Europe By Gianluca Orsatti; Valerio Sterzi
  9. From Primacy to Commitment: Revising corporate governance theories to account for recent legal innovations in the US By Kevin Levillain; Blanche Segrestin
  10. The effects of official and unofficial information on tax compliance By Filomena Garcia; Luca David Opromolla; Andrea Vezzulli; Rafael Marques
  11. Can economic sanctions be effective? By Smeets, Maarten
  12. Shining a Spotlight on EU Political Group Spending: Legal Guide on Access to Document Requests By Chaudet, Vincent; Alemanno, Alberto; Haynes, Connor; Wieche, Kayla; Morrow, Paige
  13. The Problem of Unpaid Internships: Legal Guide to Complaints Under the European Social Charter By Alemanno, Alberto; Feuerstein, Betsy; Khuong, Kevin; Yazgi, Elizabeth; Morrow, Paige
  14. Does Part-Time Mothering Help Get a Job? The Role of Shared Custody in Women’s Employment By Carole Bonnet; Bertrand Garbinti; Anne Solaz
  15. Age Gradient in Female Crime: Welfare Reform as a Turning Point By Hope Corman; Dhaval M. Dave; Nancy E. Reichman

  1. By: Shalaby, Omar; Alemanno, Alberto; Eriksson, Anastasia; Li, Mingzhu; Morrow, Paige
    Abstract: This complaint to the European Ombudsman by Access Info Europe and the HEC-NYU EU Public Interest Clinic alleges maladministration in the selection of judges for the Courts of Justice of the EU (CJEU). The complaint argues that the Council of Europe wrongly refused access to information on selection processes used for CJEU judges. For each judicial appointment to the CJEU, a special panel issues an opinion regarding the candidate’s suitability. This opinion is not made publicly available and is only shared with member states. Since 2014, the clinic has repeatedly sought access to the panel opinions. The underlying rationale for requesting access to these opinions is that the public has a right to expect a high degree of transparency about the professional competence of candidates during the judicial selection process. The Council denied access to the opinions arguing Regulation 1049/2001 (on public access to EU institutions’ documents) does not apply to the requested documents and that the procedure for appointing judges and Advocates General is not within the Council’s “sphere of responsibility.” The EU Ombudsman opened an investigation in 2015 and after examining the panel’s opinion she encouraged the Council to reconsider its disclosure policy. During this process, the Council announced that it had reassessed its practices and decided to apply Regulation 1049/2001 to documents held by its General Secretariat in relation to tasks supporting various intergovernmental bodies and entities, including the relevant panel. The Ombudsman welcomed the Council's policy change, and encouraged the complainants to file a new access request to the Council. In her final 2016 decision, the Ombudsman stated that data relating to the professional competence and activities of public figures, especially those appointed to a high level public posts, may not require the same level of protection as might apply to personal data in other circumstances. Access Info and the clinic therefore made a repeat request to the Council. A first reply from the Council, received on the same day as the Ombudsman published her final 2016 decision, only granted partial access to the documents and left aside all information relating to the suitability of the candidates – which is the subject matter of this complaint.
    Keywords: Judicial Transparency; CJEU; Court of Justice; EU Law; European Ombudsman; Access to Information; Transparency; Judicial; Judges
    JEL: K23
    Date: 2017–11–01
  2. By: Anderson, Robert D.; Chen, Jianning; Müller, Anna Caroline; Novozhilkina, Daria; Pelletier, Philippe; Sen, Nivedita; Sporysheva, Nadezhda
    Abstract: Competition agency guidelines, policy statements and related advocacy are an important vehicle for policy expression and the guidance of firms across the full spectrum of anti-competitive practices and market conduct. The role of guidelines and policy statements has, arguably, been particularly important in the context of the competition policy treatment of intellectual property rights, given the complexity of this area, the importance that competition agencies attach to it, and its importance for innovation, technology transfer and economic growth. As such, this important normative material also provides a useful empirical foundation for mapping relevant trends and the evolution of policy thinking over time and across jurisdictions. In this light, the paper examines the competition agency guidelines, policy statements and related initiatives regarding intellectual property (IP) of the following three sets of jurisdictions: (i) the United States, Canada, the European Union and Australia; (ii) Japan and Korea; and (iii) the BRICS economies (Brazil, China, India, Russia, and South Africa). It focuses, to the extent possible, on a common set of issues addressed in one way or another in the majority of these jurisdictions, comprising: (i) the treatment of licensing practices, including refusals to license; (ii) anti-competitive patent settlements; (iii) issues concerning standard-essential patents (SEPs); (iv) the conduct of patent assertion entities (PAEs); and (v) competition advocacy activities focused on the IP system. Additionally, while the primary focus of the paper is on competition agency guidelines, policy statements and advocacy activities relating to IP, reference is also made to enforcement and case developments where they are helpful in illustrating relevant approaches and trends. Overall, the analysis suggests, firstly, that, in contrast to the situation prevailing twenty or thirty years ago, interest in the systematic application of competition law vis-à-vis IP certainly is no longer a preoccupation of only a few traditional developed jurisdictions. Secondly, we find evidence of significant cross-jurisdictional learning processes and partial policy convergence across the jurisdictions surveyed. Thirdly, the analysis also reveals the continuing potential for coordination failures in regard to the approaches taken by national authorities in this area, for example where jurisdictions take different approaches to specific practices such as refusals to license and/or give differing weights to industrial policy as opposed to consumer welfare or other objectives in their policy applications.
    Keywords: competition agency guidelines,intellectual property,antitrust,innovation,licensing agreements,refusal to license,anti-competitive patent settlements,standard-essential patents (SEPs),patent assertion entities (PAEs),competition advocacy
    JEL: K21 L4 L41 L43 O3 O34
    Date: 2018
  3. By: Aragon, Fernando; Kessler, Anke
    Abstract: This paper examines the economic effects of existing private property rights on First Nations' reserves. We focus on three forms of land tenure regimes: lawful possession, designated land, and permits. These land regimes have been used to create individual land holdings, and grant secure and transferable rights of use of reserve land to band and non-band members. Using confidential Census micro-data and rich administrative data, we find evidence of improvements in home ownership and housing conditions, as well as increments in band's public spending. However, we find no significant impact on Aboriginal household income nor employment outcomes. Instead, we document that individual land holdings are associated with sizeable increases in the non-Aboriginal population. Our findings suggest that some caution is warranted when discussing the potential economic benefits of property right reforms for First Nations' communities.
    Keywords: economic development; First Nations; institutions; Property rights
    JEL: O12 O43 P48 R14
    Date: 2018–03
  4. By: Amedeo Argentiero; Bruno Chiarini; Elisabetta Marzano
    Abstract: This paper examines the impact of tax evasion on criminal activities in Italy. Specifically, we consider three types of crime that are related to economic determinants: property crimes (including robbery, theft and car theft), fraud and usury. We estimate a dynamic panel using annual data from the Italian provinces (NUTS-3) for the 2006-2010 period and show that tax evasion positively affects economic crimes. Notably, the elasticity of tax evasion to fraud is related to the size of the tax burden; in addition, these crimes demonstrate different levels of persistence over time, reflecting different adjustment costs. Finally, we find that property crimes, fraud and usury are not influenced by deterrence or clearing-up variables.
    Keywords: property crime, usury, fraud, tax evasion, deterrence effect
    JEL: C33 H26 K42
    Date: 2018
  5. By: Rajeev K. Goel; Ummad Mazhar; James W. Saunoris
    Abstract: Adding to the literature on factors driving corruption and bribery, this paper examines the effect of contestability in business operations on bribe solicitations. Contestability undermines bureaucratic rent-seeking potential and this paper tries to capture this empirically using cross-country survey data. Results show that the relatively greater contestability of business startup procedures compared to startup regulatory times led to fewer bribe demands; however, property registration regulations with lower relative contestability led to more bribe demands, especially for import licenses. Finally, older and larger firms received lower bribe demands, ceteris paribus.
    Keywords: bribery, corruption, contestability, import licenses, operating licenses, regulation
    JEL: K42 D73 M21
    Date: 2018
  6. By: Czarnitzki, Dirk; van Criekingen, Kristof
    Abstract: We contribute to the economic literature on patent litigation by taking a new perspective. In the past, scholars mostly focused on specific litigation cases at the patent level and related technological characteristics to the event of litigation. However, observing IP disputes suggests that not only technological characteristics may trigger litigation suits, but also the market positions of firms, and that firms dispute not only about single patents but often about portfolios. Consequently, this paper examines the occurrence of IP litigation cases in Belgian firms using the 2013 Community Innovation Survey with supplemental information on IP litigation and patent portfolios. The rich survey information regarding firms' general innovation strategies enables us to introduce market-related variables such as sales with new products as well as sales based mainly on imitation and incremental innovation. Our results indicate that when controlling for firms' IP portfolio, the composition of turnover in terms of innovations and imitations has additional explanatory power regarding litigation propensities. Firms with a high turnover from innovations are more likely to become plaintiffs in court. Contrastingly, firms with a high turnover from incremental innovation and imitation are more likely to become defendants in court, and, moreover, are more likely to negotiate settlements outside of court.
    Keywords: IP litigation,patenting,innovation,imitation
    JEL: O31 O34
    Date: 2018
  7. By: Maxime Le Bihan (Univ Lyon, Université Lyon 2, GATE UMR 5824, F-69130 Ecully, France); Benjamin Monnery (EconomiX-CNRS, University Paris Nanterre)
    Abstract: This paper investigates the effects of sanctions on the behavior of deputies in the French National Assembly. In 2009, the Assembly introduced small monetary sanctions to prevent absenteeism in weekly standing committee meetings (held on wednesday mornings). Using a rich monthly panel dataset of parliamentary activity for the full 2007-2012 legislature, we study the reactions of deputies to (i) the mere eligibility to new sanctions, (ii) the actual experience of a salary cut, and (iii) the public exposure of sanctioned deputies in the media. First, our diff-in-diff estimates show very large disciplining effects of the policy in terms of committee attendance, and positive or null effects on other dimensions of parliamentary work. Second, exploiting the timing of exposure to actual sanctions (monthly salary cuts versus staggered media exposure), we find that deputies strongly increase their committee attendance both after the private experience of sanctions and after their public exposure. These results suggest that monetary and reputational incentives can effectively discipline politicians without crowding out intrinsic motivation.
    Keywords: political economy, political accountability, sanctions, reputation
    JEL: D72 D78 K42
    Date: 2018
  8. By: Gianluca Orsatti; Valerio Sterzi
    Abstract: The recent upsurge of patent litigation cases initiated by patent assertion entities (PAEs) in the U.S. has led to an intense debate about their effect on innovation performances and on the IP system functioning. We contribute to this debate by providing original evidence based on the patenting activity of PAEs in Europe, a region where the patent assertion landscape is growing rapidly and the imminent introduction of the Unified Patent Court and the Unitary Patent will upset the current schemes. Relying on EPO (European Patent Office) data on patent transfers and patent citations, our results show that PAEs acquire patents with high average technological quality. They may thus increase liquidity in the patent market and enhance its efficiency. However, after a transfer occurs, patents transferred to PAEs receive significantly fewer citations. This suggests that producing companies whose business makes their technologies close to the ones acquired by PAEs may perceive an augmented risk of being sued. As a consequence, they reduce their innovative effort in fields populated by PAEs and this reflects into lower citations flowing towards PAEs’ acquired patents. These results are robust to different measures of citations considered and to different econometric techniques.
    Keywords: Market for technology; Patent assertion entities; Patent trolls; Patent intermediaries; Patent citations; Innovation.
    JEL: O31 O34
    Date: 2018
  9. By: Kevin Levillain (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique); Blanche Segrestin (CGS i3 - Centre de Gestion Scientifique i3 - MINES ParisTech - École nationale supérieure des mines de Paris - PSL - PSL Research University - CNRS - Centre National de la Recherche Scientifique)
    Abstract: For more than twenty years now, Corporate Governance scholars have hesitated between shareholder, director and stakeholder primacy, making the purpose of the corporation " the most important issue in corporate law ". In this paper, we conduct an extensive review of the arguments supporting either of these views in the US context, which shows that analyzing corporate governance through the lens of " primacy " inevitably leads to inconsistent and contradictory interpretations. In the current exploration of new business practices to deal with urgent societal challenges, this misinterpretation undermines the search for conditions to temper the dominant " shareholder value maximization " norm without jeopardizing control and efficiency. Instead we show that interpreting recent US legal innovation requires to drop the concept of " primacy " and to view corporate law as enabling a variety of distribution of decision rights between shareholders and directors. In this light, our model shows that if one is to foster companies' responsible behaviors, it appears necessary to secure both shareholders' and directors' commitment towards a broader purpose. This " commitment " model opens avenues for designing new effective governance practices, including the recent " Benefit Corporation " forms.
    Date: 2018–04–25
  10. By: Filomena Garcia; Luca David Opromolla; Andrea Vezzulli; Rafael Marques
    Abstract: The administration of tax policy has shifted its focus from enforcement to complementary instru- ments aimed at creating a social norm of tax compliance. In this paper we provide an analysis of the effects of the dissemination of information regarding the past degree of tax evasion at the social level on the current individual tax compliance behavior. We build an experiment where, for given levels of audit probabilities, fines and tax rates, subjects have to declare their income after receiving either a communication of the official average tax evasion rate or a private message from a group of ran- domly matched peers about their tax behavior. We use the experimental data to estimate a dynamic econometric model of tax evasion. The econometric model extends the Allingham–Sandmo–Yitzhaki tax evasion model to include self-consistency and endogenous social interactions among taxpayers. We find four main results. First, tax compliance is very persistent. Second, the higher the official past tax evasion rate the higher the degree of persistence: evaders are more likely to evade again, and compli- ant individuals are more likely to comply again. Third, when all peers communicate to have evaded (complied) in the past, both evaders and compliant individuals are more likely to evade (comply). Fourth, while both treatments, and especially the unofficial information treatment, are associated, in the context of our experiment, with a significantly larger growth in evasion intensity, the aggregate effect depends on the characteristics of the population. In countries with inherently low levels of tax evasion, official information can have beneficial effects by consolidating the behavior of compliant in- dividuals. However, in countries with inherently high levels of tax evasion, official information can have detrimental effects by intensifying the behavior of evaders. In both cases, the impact of official information is magnified in the presence of strong peer effects.
    Keywords: Tax morale, Information, Tax evasion, Experiment, Peer Effects
    JEL: H26 D63 C24 C92 Z13
    Date: 2018–04
  11. By: Smeets, Maarten
    Abstract: While economic sanctions may be attractive policy tools for governments wanting to express discontent with a country's behaviour, it is arguable if from an economic perspective sanctions can achieve the change that is often envisaged through the punitive measures taken. In fact, the literature does not present conclusive evidence that economic sanctions are an effective policy instrument. Nevertheless the number of sanction episodes is on the rise and have increasingly gained in popularity in recent years. What can explain that? This paper will review how sanctions work from an analytical perspective and the challenges countries encounter in applying sanctions as an effective policy tool. In doing so, it reviews more specifically the sanction episodes against the Russian Federation and Iran and without offering any views on the merits and/or legitimacy of the actions taken by any of the parties. It will be argued that economic sanctions generally inflict economic costs to all countries involved in the sanction episodes, including those taking the sanctions, thus shooting themselves in the foot. The country facing the sanctions is likely to develop trade relations with third parties that are not part of the sanction coalition. It is observed that sanctions are mostly taken in complement of diplomatic and other forms of pressure. The type of sanctions is also evolving, with countries increasingly using 'smart' sanctions, targeting financial transactions, business activities and individuals there were it hurts most and limiting their freedom of movement. From an analytical perspective, it is noted that when various measures are put in place, it is hard to assess the extent to which the economic sanctions per se contribute to the eventual outcomes, hence the question of attribution. It is the combination of various interventions that could eventually make the sanction episodes effective, if at all and not the economic sanctions per se. Despite such shortcomings and lack of evidence of their effectiveness, it can safely be said that they are the preferred option compared to military intervention. At the same time, and regrettably, sanctions do not necessarily prevent armed conflict adding to the economic cost the tragic cost of human life.
    Keywords: trade sanctions,conflict,trade theory and policy,national security,international relations
    JEL: F13 F51 F52 F53
    Date: 2018
  12. By: Chaudet, Vincent; Alemanno, Alberto; Haynes, Connor; Wieche, Kayla; Morrow, Paige
    Abstract: The purpose of this legal memorandum is to provide advice to organisations and individuals interested in submitting a request for public access to documents under Regulation (EC) No 1049/01 (“Regulation 1049/01”) to the European Parliament for documents related to the spending of political groups covered by Budget Item 400 appropriations under Chapter 7. Requests for those documents may face rejection on grounds related to exceptions provided for in Regulation 1049/01, specifically those found in Articles 4(1)b, 4(2), and 4(3) pertaining to privacy and integrity of the individual, commercial interests, and institution’s decision-making process respectively. This legal memorandum addresses the applicability of those exceptions to the documents requested for potential use in a confirmatory request to be submitted to the European Parliament subsequent to the initial rejection in line with Article 7 of Regulation 1049/01. The memo also provides arguments for overcoming these exceptions in light of: 1) recent developments in the case law of the Court of Justice of the European Union (“CJEU”) relating to the privacy exception; and 2) the strict legal requirements for triggering the commercial interests and institutional decision-making exceptions. The last section of the memo is structured to provide draft responses to the denial of requests for documents and should be tailored to the specific situation in question.
    Keywords: Open Government; Transparency; Participation; Civic Empowerment; Legitimacy; Accountability; Civil Society; European Union; Good Governance
    JEL: K19 K33
    Date: 2017–09–01
  13. By: Alemanno, Alberto; Feuerstein, Betsy; Khuong, Kevin; Yazgi, Elizabeth; Morrow, Paige
    Abstract: Young people entering the job market are in a precarious economic position. Across Europe, and in Belgium in particular, those who wish to enter into the professional world are faced with the de facto mandate that in order to gain experience and build the connections that will enable them to find paid professional work in the future, they must complete several internships. Yet many of these internships are unpaid or underpaid, forcing some young people to rely on their savings or their parents and shutting others out of the process entirely. The European Committee of Social Rights (the “Committee”) accepts collective complaints lodged by non-governmental organisations alleging violations of the European Social Charter (the “Charter”). The EU Public Interest Clinic prepared this draft Complaint for the non-profit organization European Youth Forum, alleging that unpaid internships in Belgium violate the Charter. Specifically, the provisions in Belgian law that enable unpaid internships, and the lack of enforcement of provisions that aim to curtail them, violate Articles 4, 7, and 10 of the Charter, which provide for fair remuneration, the protection of young people, and financial assistance for vocational training, respectively.
    Keywords: Council of Europe; human rights; social rights; monitoring mechanism
    JEL: J83 J88 K30
    Date: 2017–09–01
  14. By: Carole Bonnet; Bertrand Garbinti; Anne Solaz
    Abstract: Though shared custody arrangements after divorce are more and more frequent in many countries, little is known about their economic consequences for parents. By relaxing family time constraints, does shared custody help divorced mothers return to work more easily? This article analyses to what extent the type of child custody arrangement affects mothers' labour market behaviours after divorce. Using a large sample of divorcees from an exhaustive French administrative income-tax database, and taking advantage of the huge territorial discrepancies observed in the proportion of shared custody, we correct for the possible endogeneity of shared custody. As it turns out, the probability of being employed is 16 percentage points higher for mothers with shared custody arrangements compared to those having sole physical custody, with huge heterogeneous effects: larger positive effects are observed for previously inactive women, for those belonging to the lowest income quintiles before divorce, for those with a young child, and for those who have three or more children. Shared custody is particularly helpful for women who are far removed from the labour market.
    Keywords: Divorce, Child custody, Shared custody, Labour supply
    JEL: J12 J18 J22 K36
    Date: 2018–04
  15. By: Hope Corman; Dhaval M. Dave; Nancy E. Reichman
    Abstract: This study explores how a major public policy change—the implementation of welfare reform in the U.S. in the 1990s—shaped the age gradient in female crime. We used FBI arrest data to investigate the age-patterning of the effects of welfare reform on women’s arrests for property crime, the type of crime women are most likely to commit and that welfare reform has been shown to affect. We found that women’s property crime arrest rates declined over the age span; that welfare reform led to an overall reduction in adult women’s property crime arrests of about 4%, with the strongest effects for women ages 25–29 and in their 40s; that the effects were slightly stronger in states with stricter work incentives; and that the effects were much stronger in states with high criminal justice expenditures and staffing. The key contributions of this study are the focus on a broad and relevant policy-based “turning point” (change in circumstances that can lead people to launch or desist from criminal careers), addressing the general question of how a turning point shapes age gradients in criminal behavior, and the focus on women in the context of the age patterning of crime.
    JEL: I38 K42
    Date: 2018–03

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