nep-law New Economics Papers
on Law and Economics
Issue of 2019‒12‒23
seven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The impact of experience on how we perceive the rule of law By Benito Arruñada
  2. The process of individualisation of punishment in insolvency crimes By Jozef Čentéš; Michal Mrva; Michal Krajčovič
  3. Trust in State and Non-State Actors: Evidence from Dispute Resolution in Pakistan By Daron Acemoglu; Ali Cheema; Asim Ijaz Khwaja; James A. Robinson
  4. More or less unmarried. The impact of legal settings of cohabitation on labor market outcomes By Marion Goussé; Marion Leturcq
  5. Corruption, Judicial Accountability and Inequality: Unfair Procedures May Benefit the Worst-Off By Berggren, Niclas; Bjørnskov, Christian
  6. Intellectual property rights and the commodification of nature: the case of seeds By Gentilucci, Eleonora
  7. Labor in the Boardroom By Simon Jäger; Benjamin Schoefer; Jörg Heining

  1. By: Benito Arruñada
    Abstract: Experience is a major source of knowledge. Could institutions be improved by eliciting the additional knowledge held by experienced individuals? I show here that in several areas of the law experienced individuals are more critical of institutional quality than inexperienced individuals. Moreover, performance indexes built with experienced subsamples substantially alter country rankings. Assuming no unmeasured confounders, more knowledge arguably leads experienced individuals to revise the more benign view held by the general population, composed mostly of inexperienced individuals. Moreover, experience is a stronger driver than alternative sources of knowledge, including education, which might therefore be reinforcing milder and, arguably, incorrect assessments of institutional quality. After observing how this “experience effect” varies systematically across countries, I conclude by proposing that evaluations of institutional quality pay greater attention to experienced individuals and cautioning against basing inferences on assessments made by the general population.
    Keywords: Institutions, experience, knowledge, perception, rule of law, measurement
    JEL: D02 D71 D83 K12 K14 K31 K32 K41 K42
    Date: 2019–11
  2. By: Jozef Čentéš (Comenius University [Bratislava]); Michal Mrva (Comenius University [Bratislava]); Michal Krajčovič (Comenius University [Bratislava])
    Abstract: In the context of considerations concerning justice in the punishment of criminal offenders it is necessary to focus on the issue of individualisation of the sentence. Through this process the court determines the offender's particular kind of punishment and sentence. The punishment should subsequently be an expression of society's idea of the state's fair reaction to the offence committed. The authors have focused on the process of individualisation of punishment in the case of sentencing offenders in insolvency crime. The theory of rational choice and ideals of restorative justice are of crucial importance in the authors' thinking. In reflection of the object of the criminal activity and the element of reciprocity (presuming rationality of the perpetrator) we come down to the suitability of the more common imposition of pecuniary penalty on these perpetrators. The text analyses both the advantages and disadvantages of pecuniary penalty, not just in relation to insolvency offenders.
    Keywords: insolvency,insolvency crime,punishment,criminal liability,pecuniary penalty,individualisation of punishment
    Date: 2018–12–30
  3. By: Daron Acemoglu; Ali Cheema; Asim Ijaz Khwaja; James A. Robinson
    Abstract: Lack of trust in state institutions, often due to poor service provision, is a pervasive problem in many developing countries. It may also be one of the reasons citizens turn to non-state actors for services. This paper investigates whether information about improved public services can help build trust in state institutions and move people away from non-state actors. We focus on dispute resolution in rural Pakistan. We find that (truthful) information about reduced delays in state courts leads to citizens reporting higher likelihood of using them and to greater allocations to the state in two high-stakes lab-in-the-field games designed to measure belief in the effectiveness of state courts and willingness to contribute resources for others to access them. More interestingly, we find indirect negative effects on non-state actors in the same high-stakes settings. We show that the positive direct and negative indirect effects are both mediated by changes in beliefs about the effectiveness of these actors. Our preferred interpretation explains these behaviors as a response to improved beliefs about state actors which then motivate individuals to interact less with non-state actors and as a result downgrade their beliefs about them. We provide additional checks bolstering this interpretation and alleviating concerns about potential social experimenter effects or mechanical contrasts between the two actors. These results indicate that, despite distrust of the state in Pakistan, credible new information can change beliefs and behavior.
    Keywords: dispute resolution, lab-in-the-field games, legitimacy, motivated reasoning, non-state actors, state capacity, trust
    JEL: D02 D73 D74 D83 C91 C93 K40 O17 P16
    Date: 2019–07
  4. By: Marion Goussé; Marion Leturcq
    Abstract: We show how the legal settings of unmarried cohabitation affect partners' labor market outcomes. In Canada, cohabiting couples are automatically entitled to certain rights after a few years of cohabitation. In some provinces, ex-cohabiting partners can claim for alimony upon separation, in others they can claim for an equal split of all the assets acquired during the relationship. As legal settings of unmarried cohabitation differ across time, provinces and duration of the relationship, it provides a unique framework to analyze how different levels of commitment affect couples' decision regarding labor market supply. Using cross-provinces variation in the legal settings and minimum duration for eligibility, we show that unmarried cohabiting men increase their labor force supply when they become eligible to a more committed cohabitation regime, whereas women decrease theirs. Higher levels of commitment induce larger effects on labor market outcomes.
    Keywords: Unmarried cohabitation, labor supply, alimony rights, common law marriage, Canada, CANADA / CANADA, COHABITATION HORS MARIAGE / NONMARITAL COHABITATION, PENSION ALIMENTAIRE / ALIMONY, POPULATION ACTIVE / LABOUR FORCE
    Date: 2018
  5. By: Berggren, Niclas (Research Institute of Industrial Economics (IFN)); Bjørnskov, Christian (Aarhus University)
    Abstract: We ask whether, as many seem to think, corruption worsens, and judicial accountability improves, inequality, and investigate this empirically using data from 145 countries 1960–2014. We relate perceived corruption and de facto judicial accountability to gross-income inequality and consumption inequality. The study shows that corruption is negatively, and that judicial accountability is positively, related to both types of inequality. The estimates are particularly pronounced in democracies and arguably causal, as we find that the full effect only occurs after institutional stability has been established; The findings suggest that “unfair procedures” – corruption and deviations from judicial accountability – may benefit the economically worst off and worsen the situation of the economic elite.
    Keywords: Corruption; Inequality; Institutions; Accountability; Rent-seeking
    JEL: C31 D02 D31 D72 D73 E26
    Date: 2019–12–16
  6. By: Gentilucci, Eleonora
    Abstract: The paper uses the Ostromian analytical framework of CPRs and commons definitions, in order to analyze the effect of the introduction of IPRs on the seeds. The main contribution of this research is twofold. On the one hand it allows to validate the initial hypothesis (H1) namely that, throughout the history, until the introduction of IPRs on the living (S0), seeds were CPRs and commons and, after the introduction of IPRs (S1), seeds became private goods. The analysis carried out shows that seeds are commons of knowledge and natural resource and that the introduction of IPRs has allowed the appropriation of a resource that was previously common. This is the “commodification” process. On the other hand study deeps a specific tool to overcome the enclosure imposed by IPRs, to seeds: namely the application of free software principles to seeds. This enables a return to the reverse process of “commonification”.
    Keywords: Seeds, Knowledge commons, Common-pool resources, Intellectual property rights, Free software.
    JEL: B52 O13 O34 P14 P16
    Date: 2018–12–13
  7. By: Simon Jäger; Benjamin Schoefer; Jörg Heining
    Abstract: We estimate the effects of a mandate allocating a third of corporate board seats to workers (shared governance). We study a reform in Germany that abruptly abolished this mandate for certain firms incorporated after August 1994 but locked it in for the older cohorts. In sharp contrast to the canonical hold-up hypothesis – that increasing labor's power reduces owners' capital investment – we find that granting formal control rights to workers raises capital formation. The capital stock, the capital-labor ratio, and the capital share all increase. Shared governance does not raise wage premia or rent sharing. It lowers outsourcing, while moderately shifting employment to skilled labor. Shared governance has no clear effect on profitability, leverage, or costs of debt. Overall, the evidence is consistent with richer models of industrial relations whereby shared governance raises capital by permitting workers to bargain over investment or by institutionalizing communication and repeated interactions between labor and capital.
    JEL: G3 K31 J0 J3 J53 J54 M12 M5
    Date: 2019–11

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