nep-law New Economics Papers
on Law and Economics
Issue of 2019‒11‒04
eleven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The Impact of the First Professional Police Forces on Crime By Bindler, Anna; Hjalmarsson, Randi
  2. Prison, Semi-Liberty and Recidivism: Bounding Causal Effects in a Survival Model By Benjamin Monnery; François-Charles Wolff; Anaïs Henneguelle
  3. The Persistence of the Criminal Justice Gender Gap: Evidence from 200 Years of Judicial Decisions By Bindler, Anna; Hjalmarsson, Randi
  4. The Consequences of Extending Equitable Property Division Divorce Laws to Cohabitants By Abraham Chigavazira; Hayley Fisher; Tim Robinson; Anna Zhu
  5. Malpractice – The Phenomenon and the Relevant Advantages of Mediation in Criminal Cases By Crina-Maria Hristodorof
  6. Corrupting Cartels: An Overview of the Petrobras Case By Spagnolo, Giancarlo; Barbosa, Kleno
  7. Particularities of the Forensic Investigation of Software Piracy and Online Piracy By Adrian Cristian Moise
  8. Lending to the Unbanked: Relational Contracting with Loan Sharks By Kevin Lang; Kaiwen Leong; Huailu Li; Haibo Xu
  9. Tying in Evolving Industries, When Future Entry Cannot be Deterred By Chiara Fumagalli; Massimo Motta
  10. Mafia Firms and Aftermaths By Maria Rosaria Alfano; Claudia Cantabene; Damiano Bruno Silipo
  11. Be Cautious with the Precautionary Principle: Evidence from Fukushima Daiichi Nuclear Accident By Matthew J. Neidell; Shinsuke Uchida; Marcella Veronesi

  1. By: Bindler, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University); Hjalmarsson, Randi (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: This paper evaluates how the introduction of professional police forces affected crime using two natural experiments in history: the 1829 formation of the London Metropolitan Police (the first police force ever tasked with deterring crime) and the 1839 to 1856 county roll-out of forces in England and Wales. The London Met analysis relies on two complementary data sources. The first, trial data with geocoded crime locations, allows for a difference-indifferences estimation that finds a significant and persistent reduction in robbery but not homicide or burglary. A pre-post analysis of the second source, daily police reports of both cleared and uncleared crime incidents, finds a significant reduction in all violent crimes but offsetting changes in uncleared (decrease) and cleared (increase) property crimes. These (local) reductions in crime are not just due to crime displacement but represent true decreases in overall crime. Difference-in-difference analyses of the county roll-out find that only sufficiently large forces, measured by the population to force ratio, significantly reduced crime. The results are robust to controlling for spill-over effects of neighboring forces.
    Keywords: police; crime; deterrence; economic history; institutions
    JEL: H00 K42 N93
    Date: 2019–10
  2. By: Benjamin Monnery; François-Charles Wolff; Anaïs Henneguelle
    Abstract: This paper investigates the effect of semi-liberty as an alternative to prison on recidivism in France. Our analysis is based on a unique dataset comprising 1,445 offenders, all eligible to semi-liberty. In the absence of an instrumental variable affecting access to semi-liberty but unrelated to recidivism, we turn to selection-on-observable methods as well as sensitivity analyses to bound the causal effect of interest. Our results under treatment exogeneity (Cox regressions) and conditional independence (matching) show that semi-liberty is associated with a reduction of 22% to 31% in offenders’ hazard of recidivism in the five years after release. The estimated effects decrease, but remain negative and significant when credible confounders are introduced. Overall, our analysis lends strong support for a beneficial effect of semi-liberty compared to prison.
    Keywords: Recidivism, semi-liberty, halfway houses, prison, survival analyses, sensitivity analyses
    JEL: K14 K42 C18
    Date: 2019
  3. By: Bindler, Anna (Department of Economics, School of Business, Economics and Law, Göteborg University); Hjalmarsson, Randi (Department of Economics, School of Business, Economics and Law, Göteborg University)
    Abstract: We document persistent gender gaps favoring females in jury convictions and judge sentences in nearly 200 years of London trials, which are unexplained by case characteristics. We find that three sharp changes in punishment severity locally affected the size and nature of the gaps, but were generally not strong enough to offset their persistence. These local effects suggest a mechanism of taste-based discrimination (paternalism) where the all-male judiciary protected females from the harshest available punishment.
    Keywords: gender; gender gap; crime; verdict; sentencing; discrimination; history
    JEL: J16 K14 K40 N33
    Date: 2019–10
  4. By: Abraham Chigavazira (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Hayley Fisher (University of Sydney); Tim Robinson (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne); Anna Zhu (Melbourne Institute: Applied Economic & Social Research, The University of Melbourne)
    Abstract: This paper analyses the effect of extending equitable property division divorce laws to unmarried cohabiting couples in Australia. Using a triple-difference fixed effects approach we show that existing couples are more likely to make relationship-specific investments after being exposed to laws enabling the equitable redistribution of property in the event of relationship breakdown. In affected couples we find that men increase their employment and women increase time spent on housework. Couples have more children and are more likely to become home owners. These results demonstrate the causal effect of property division laws on relationship-specific investments and inform the ongoing international debate about the appropriate legal treatment of unmarried cohabiting couples.
    Keywords: divorce law, cohabitation, relationship-specific investments, HILDA
    JEL: J12 K36
    Date: 2019–03
  5. By: Crina-Maria Hristodorof (Dimitrie Cantemir Christian University of Bucharest)
    Abstract: Malpractice is a relatively newly recognized phenomenon, whose negative effects regard both the client (patient) and the professional. Nowadays, there is a widely held intention of the client incurring damages from a malpractice case in order to obtain damage-repairs that are higher than deserved, but also to cause a “bad-advertising†for the professional in default, especially in criminal cases. Mediation seems to be an instrument to provide the best solution for both parties involved: the client obtains a better repair than a Court-of-Law can decide upon, while the professional benefits from a more confidential analysis on his default; additionally, the Courts-of-Law are relieved from analyzing malpractice cases. The mediation procedure for medical malpractice cases can be regarded as an extrajudicial alternative, a "WIN-WIN" solution, by its nature, for the parties in conflict who have a possibility of reaching a mutually beneficial agreement. Whereas, according to Article 16 of the New Criminal Procedure Code par. 1 The criminal action cannot be put into motion and when it has been put into motion it can no longer be exercised if: g) the preliminary complaint was withdrawn in the case of offenses for which its withdrawal removes the criminal liability, the reconciliation occurred or a mediation agreement was concluded under the law. Therefore, a positive result of the mediation activity in criminal matters would lead to the suspension of criminal proceedings in the criminal investigation phase or the termination of the trial at the trial stage. In addition to this advantage, other benefits of the mediation procedure in criminal matters will be discussed in the present article.
    Keywords: criminal cases, injury, malpractice, mediation, phenomenon, win-win situation
    Date: 2019–08
  6. By: Spagnolo, Giancarlo (Stockholm Institute of Transition Economics); Barbosa, Kleno (Stockholm Institute of Transition Economics)
    Abstract: This paper provides an overview of the corruption case and the connected cartels that affected one of the biggest Brazilian state-owned companies, Petrobras, and the highly controversial ‘Operation Car Wash’. We focus on the behavior of cartel members and study the size of the contracts affected or potentially affected by the illegal activity, comparing them with comparable sets of contracts selected with three different matching approaches.
    Keywords: Corruption; Cartels; Brazil
    JEL: F19
    Date: 2019–10–25
  7. By: Adrian Cristian Moise (Spiru Haret University of Bucharest, Romania)
    Abstract: Starting from the analysis of the Law no 8/1996 on copyright and related rights in Romania, and continuing with the analysis of the main provisions of the European Union Directive 2001/29/EC on copyright and related rights in the information society and the European Union Directive 2009/24/EC on the legal protection of computer programs, the article presents and analyzes aspects of the criminal investigation of software piracy and online piracy. The article analyzes both some of the criminal investigation acts commonly used in software piracy such as technical-scientific findings and forensic expertise of copyrighted software or related rights, and some methodological issues related to forensic investigation of software piracy and online piracy.
    Keywords: copyrights, forensic investigation, online piracy, software piracy
    Date: 2019–08
  8. By: Kevin Lang; Kaiwen Leong; Huailu Li; Haibo Xu
    Abstract: We study roughly 11,000 loans from unlicensed moneylenders to over 1,000 borrowers in Singapore and provide basic information about this understudied market. Borrowers frequently expect to repay late. While lenders do rely on additional punishments to enforce loans, the primary cost of not repaying on time is compounding of a very high interest rate. We develop a very simple model of the relational contract between loan sharks and borrowers and use it to predict the effect of a crackdown on illegal moneylending. Consistent with our model, the crackdown raised the interest rate and lowered the size of loans.
    JEL: I28 I3 K42
    Date: 2019–10
  9. By: Chiara Fumagalli (Università Bocconi, CSEF and CEPR); Massimo Motta (ICREA-Universitat Pompeu Fabra and Barcelona Graduate School of Economics)
    Abstract: We show that the incentive to engage in exclusionary tying (of two complementary products) may arise even when tying cannot be used as a defensive strategy to protect the incumbent's dominant position in the primary market. By engaging in tying, an incumbent firm sacrifices current profits but can exclude a more efficient rival from a complementary market by depriving it of the critical scale it needs to be successful. In turn, exclusion in the complementary market allows the incumbent to be in a favorable position when a more efficient rival will enter the primary market, and to appropriate some of the rival's efficiency rents. The paper also shows that tying is a more profitable exclusionary strategy than pure bundling, and that exclusion is the less likely the higher the proportion of consumers who multi-home.
    Keywords: Inefficient foreclosure, Tying, Scale economies, Network Externalities
    JEL: K21 L41
    Date: 2019–10–30
  10. By: Maria Rosaria Alfano (Università degli Studi della Campania); Claudia Cantabene (Università degli Studi della Campania); Damiano Bruno Silipo (Università della Calabria)
    Abstract: We use a unique and unexplored dataset to investigate the determinants and effects of mafia firms in Italy. Mafia may use several tools to expand its firms. However, in this paper, we show that they prefer political corruption to violence to expand mafia firms. In particular, they use the latter more to build up their reputation in new established regions. Mafia firms hamper entrepreneurial activity but they can have beneficial effects on unemployment if mafia firms add to not substitute current economic activities. Policy makers should take account of this twofold effects of mafia firms.
    Keywords: Organized Crime, Mafia Firm, Mafia and Development
    JEL: D02 K14 L11
    Date: 2019–10
  11. By: Matthew J. Neidell; Shinsuke Uchida; Marcella Veronesi
    Abstract: This paper provides a large scale, empirical evaluation of unintended effects from invoking the precautionary principle after the Fukushima Daiichi nuclear accident. After the accident, all nuclear power stations ceased operation and nuclear power was replaced by fossil fuels, causing an exogenous increase in electricity prices. This increase led to a reduction in energy consumption, which caused an increase in mortality during very cold temperatures. We estimate that the increase in mortality from higher electricity prices outnumbers the mortality from the accident itself, suggesting the decision to cease nuclear production has contributed to more deaths than the accident itself.
    JEL: I12 K32 Q41
    Date: 2019–10

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