nep-law New Economics Papers
on Law and Economics
Issue of 2018‒05‒28
ten papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Prices, Policing and Policy: The Dynamics of Crime Booms and Busts By Kirchmaier, Tom; Machin, Stephen; Sandi, Matteo; Witt, Robert
  2. The rule of law and Islam By Gutmann, Jerg; Voigt, Stefan
  3. Economic sanctions and human rights: Quantifying the legal proportionality principle By Gutmann, Jerg; Neuenkirch, Matthias; Neumeier, Florian; Steinbach, Armin
  4. The Moral Hazard of Lifesaving Innovations: Naloxone Access, Opioid Abuse, and Crime By Doleac, Jennifer; Mukherjee, Anita
  5. The Immediate Demand for an Efficient Protection of Witnesses of Justice in Albania By Romina Beqiri
  6. The Legal Academy's Ideological Uniformity By Bonica, Adam; Chilton, Adam; Rozema, Kyle; Sen, Maya
  7. Eclipse of the Public Corporation or Eclipse of the Public Markets? By Doidge, Craig; Kahle, Kathleen M.; Karolyi, George Andrew; Stulz, Rene M.
  8. Child's Gender, Young Fathers' Crime, and Spillover Effects in Criminal Behavior By Christian Dustmann; Rasmus Landersø
  9. Crime is in the Air: The Contemporaneous Relationship between Air Pollution and Crime By Bondy, Malvina; Roth, Sefi; Sager, Lutz
  10. The Migrant Smuggling Crime in Romania By Nicoleta-Elena Buzatu

  1. By: Kirchmaier, Tom (London School of Economics); Machin, Stephen (London School of Economics); Sandi, Matteo (University of Sussex); Witt, Robert (University of Surrey)
    Abstract: In many historical episodes, the extent of criminal activity has displayed booms and busts. One very clear example is the case of metal crime, where in the face of big increases in value driven by world commodity prices, the incidence of metal thefts in the UK (and elsewhere) rose very sharply in the 2000s. Early in the current decade, they fell sharply again. This paper studies the roles of prices, policing and policy in explaining these crime dynamics. The empirical analysis shows sizeable and significant metal crime-price elasticities, in line with the idea that changing economic returns do shape crime. However, the rapid upward and downward trends are not only due to price changes. Their temporal evolution is also explained by changes in policing and policy. On the former, a difference-in-differences approach is used to document an important role of policing as a consequence of an anti-metal crime operation introduced in 2012. On the latter, the introduction of the Scrap Metal Dealers Act 2013 is exploited to study the impact of policy on the economic activity of scrap metal dealers in England and Wales. Results from our difference-in-differences specification suggest that the tougher regulatory system introduced by the policy hindered the economic activity of pre-existing dealers, reflecting the reduced market size for potential metal criminals to sell what they have stolen.
    Keywords: metal crime, metal prices, commodity prices
    JEL: K42
    Date: 2018–04
  2. By: Gutmann, Jerg; Voigt, Stefan
    Abstract: No other religion's role in politics is as controversial as that of Islam – at least in Western societies. It has been claimed that Muslims are more likely than others to voice opinions that conflict with core elements of a free society, such as capitalism, constitutional democracy, and the rule of law. Indeed, Muslim countries seem to struggle with establishing democracy and the rule of law, while the acknowledgement and protection of minority rights in particular are a constant concern in Muslim societies. A recent survey by the PEW Research Centre indicates that values expressed by large numbers of Muslims around the world remain incompatible with the liberalism favoured in modern-day Western societies. Although Muslims in most parts of the world think that women should decide whether they veil themselves, overwhelming majorities of Muslims also say that a wife should always obey her husband. Furthermore it is still controversial whether women should have a right to divorce and whether sons and daughters have the same inheritance rights. Even though a majority of Muslims support democracy and it is almost universally agreed that religious freedom is something positive, the view that religion should play a role in politics is widely embraced among Muslims. A majority of Muslims favour enshrining Shari'a in official state law and specifically among those Muslims, honour killings and the death penalty for apostates are widely supported...
    Date: 2018
  3. By: Gutmann, Jerg; Neuenkirch, Matthias; Neumeier, Florian; Steinbach, Armin
    Abstract: The proportionality principle, as the cardinal principle of international law, includes a necessity and a proportionality test, both of which rest on empirical premises. The necessity test involves an assessment of whether a legal sanction is well-suited to achieve its objective. The proportionality test questions the causal link between the sanction and the human rights situation in the country against which the sanction is aimed. This study analyzes the empirical basis of the proportionality principle by examining the consequences of economic sanctions for the target country’s human rights situation. We use endogenous treatment-regression models to test the empirical basis of the proportionality principle by estimating the causal average treatment effect of US economic sanctions on different types of human rights within a uniform empirical framework. We find that economic sanctions do not pass the legal necessity test in cases where the purpose of the sanctions is to improve the human rights situation. On the contrary, we find that such sanctions actually lead to a deterioration of the human rights situation. Moreover, our finding that the sanctions have no effect on basic, economic, and emancipatory human rights calls into question the dominant view that economic sanctions are disproportionate. On a general note, our study underscores the empirical contingencies of a core legal principle under international and national law.
    Date: 2018
  4. By: Doleac, Jennifer (University of Virginia); Mukherjee, Anita (University of Wisconsin-Madison)
    Abstract: The United States is experiencing an epidemic of opioid abuse. In response, many states have increased access to naloxone, a drug that can save lives when administered during an overdose. However, naloxone access may unintentionally increase opioid abuse through two channels: (1) reducing the risk of death per use, thereby making riskier opioid use more appealing, and (2) saving the lives of active drug users, who survive to continue abusing opioids. By increasing the number of opioid abusers who need to fund their drug purchases, naloxone access laws may also increase theft. We exploit the staggered timing of naloxone access laws to estimate the total effects of these laws. We find that broadening naloxone access led to more opioid-related emergency room visits and more opioid-related theft, with no reduction in opioid-related mortality. These effects are driven by urban areas and vary by region. We find the most detrimental effects in the Midwest, including a 14% increase in opioid-related mortality in that region. We also find suggestive evidence that broadening naloxone access increased the use of fentanyl, a particularly potent opioid. While naloxone has great potential as a harm-reduction strategy, our analysis is consistent with the hypothesis that broadening access to naloxone encourages riskier behaviors with respect to opioid abuse.
    Keywords: naloxone, opioids, moral hazard
    JEL: I18 K42 D81
    Date: 2018–04
  5. By: Romina Beqiri (European University of Tirana)
    Abstract: In spite of the abundant information regarding Albania’s struggle from transition towards the integration into the European Union, envisioning common international justice affairs still remains insufficient and it seems that any close connection to the international criminal courts and tribunals has been largely ignored. This paper gives a picture of the alleged ‘internationalisation’ of the witness protection legislation and touches two aspects: firstly, the issues of the current legal framework in relation to procedural and non-procedural witness protective measures and challenges to ensure their effectiveness and secondly, the incorporation of new provisions in the domestic laws related to the best practices on support and assistance for witnesses at international and regional levels. In order to comprehend Albania’s compliance with the Rome Statute of the International Criminal Court and other European legal instruments, an analysis of official documents was carried out, and a range of interviews were performed with staff of the International Criminal Court, the Courts of Serious Crimes and a District Court in Albania. This study draws conclusions and develops a set of recommendations on the steps that Albania has to take in relation to providing adequate protection and assistance in support of witnesses testifying in serious crimes cases.
    Keywords: witness protective measures, international criminal court, judicial effectiveness and efficiency, process of familiarization
    Date: 2018–03
  6. By: Bonica, Adam (Stanford University); Chilton, Adam (University of Chicago); Rozema, Kyle (Northwestern University); Sen, Maya (Harvard University)
    Abstract: We compare the ideological balance of the legal academy to the ideological balance of the legal profession. To do so, we match professors listed in the Association of American Law Schools Directory of Law Teachers and lawyers listed in the Martindale-Hubbell directory to a measure of political ideology based on political donations. We find that 15% of law professors, compared to 35% of lawyers, are conservative. After controlling for individual characteristics, however, this 20 percentage point ideological gap narrows to around 13 percentage points. We argue that this ideological uniformity marginalizes law professors, but that it may not be possible to improve the ideological balance of the legal academy without sacrificing other values.
    Date: 2017–04
  7. By: Doidge, Craig (University of Toronto); Kahle, Kathleen M. (University of Arizona); Karolyi, George Andrew (Cornell University); Stulz, Rene M. (Ohio State University)
    Abstract: Since reaching a peak in 1997, the number of listed firms in the U.S. has fallen in every year but one. During this same period, public firms have been net purchasers of $3.6 trillion of equity (in 2015 dollars) rather than net issuers. The propensity to be listed is lower across all firm size groups, but more so among firms with less than 5,000 employees. Relative to other countries, the U.S. now has abnormally few listed firms. Because markets have become unattractive to small firms, existing listed firms are larger and older. We argue that the importance of intangible investment has grown but that public markets are not well-suited for young, R&D-intensive companies. Since there is abundant capital available to such firms without going public, they have little incentive to do so until they reach the point in their lifecycle where they focus more on payouts than on raising capital.
    JEL: G18 G24 G28 G32 G35 K22 L26
    Date: 2018–01
  8. By: Christian Dustmann (University College London and Centre for Research and Analysis of Migration (CReAM)); Rasmus Landersø (Rockwool Foundation Research Unit)
    Abstract: This paper studies whether an exogenous reduction in the criminal activity of one individual lowers crimes committed by other young men who live in the immediate neighborhood. Using the randomness of a child's gender, we first show that men who father their first child at a very young age are convicted of significantly fewer crimes in the first years after the birth if the child is a son rather than a daughter. We next show that this leads to behavioral spillovers that significantly reduce criminal convictions among other young men living in the same neighborhood as the father at the child's birth, as well as victimization rates, for at least five years after birth. Evaluating our estimates within a structural model shows that spillovers in crime generate crime multipliers that continue to increase even after the primary impact of the initial shock on the focal individual has dissipated. From the model we further illustrate that crime prevention policies that target high crime individuals at an early stage of their lives are likely to lead to far larger reductions in the cost of crime than suggested by the primary effects alone.
    Date: 2018–05
  9. By: Bondy, Malvina (London School of Economics); Roth, Sefi (London School of Economics); Sager, Lutz (London School of Economics)
    Abstract: Many empirical studies have examined various determinants of crime. However, the link between crime and air pollution has been surprisingly overlooked despite several potential pathways. In this paper, we study whether exposure to ambient air pollution affects crime by using daily administrative data for the years 2004-05 in London. For identification, we mainly rely on the panel structure of the data to estimate models with ward fixed effects. We complement our main analysis with an instrumental variable approach where we use wind direction as an exogenous shock to local air pollution concentrations. We find that elevated levels of air pollution have a positive and statistically significant impact on overall crime and that the effect is stronger for types of crime which tend to be less severe. We formally explore the underlying mechanism for our finding and conclude that the effect of air pollution on crime is likely mediated by higher discounting of future punishment. Importantly, we also find that these effects are present at levels which are well below current regulatory standards and that the effect of air pollution on crime appears to be unevenly distributed across the income distribution. Overall, our results suggest that reducing air pollution in urban areas may be a cost effective measure to reduce crime.
    Keywords: air pollution, crime, economic incentives
    JEL: H23 K42 Q53
    Date: 2018–04
  10. By: Nicoleta-Elena Buzatu (Dimitrie Cantemir Christian University)
    Abstract: The study below is meant to focus on the migrant smuggling crime in Romania, in specially analysis of the migrant smuggling infraction provided in the Romanian Criminal Code. Being a component of the human trafficking activity, the illegal migration is a phenomenon that is continuously extending and harder to stop due to the involvement of the organized crime networks and also due the ingenuousness and maliciousness of the people and the criminals. Therewith, the migrant smuggling is highly connected with drug trafficking, terrorism etc., aspects that are connected with the organized crime. Legally, there are many differences between the source states, the transit states or the destination states, that is slowing the fight of the states for combating this scourge. During this fight of preventing and stopping the illegal migrant smuggling, the states that are involved aligned their own legal frame to the international one in the activity field, by elaborating and promoting the regulatory acts that have been putting the responsibility on the governmental and non-governmental institution in this activity field.
    Keywords: migrant, illegal migration, crime, organized crime, Romanian Criminal Code
    Date: 2018–04

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