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on Law and Economics |
| By: | Yu Aoki; Theodore Koutmeridis |
| Abstract: | We study criminal incentives exploiting the devastating shock of the 1995 Kobe earthquake. Evidence shows that the earthquake decreased burglaries but left other crime types unaffected. The effect stays significant even after controlling for unemployment, policing and income. We corroborate this by instrumenting damages with the distance from the earthquake epicentre. These findings survive various robustness checks under different specifications. The evidence is consistent with a simple theory of crime, value and specialization. We conclude that burglars respond to damages that devaluate their prospective takings. Yet, they cannot shift their specialization and substitute burglaries with other crime types |
| Keywords: | crime, burglary, value, housing damage, specialization |
| JEL: | K42 |
| Date: | 2019–11 |
| URL: | http://d.repec.org/n?u=RePEc:gla:glaewp:2019_13&r=all |
| By: | Abel Brodeur (Department of Economics, University of Ottawa); Marie Christelle Mabeu (Department of Economics, University of Ottawa, Ottawa, ON); Roland Pongou (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | A large literature documents persistent impacts of formal historical institutions. However, very little is known about how these institutions interact with ancestral traditions to determine long-term economic and social outcomes. This paper addresses this question by studying the persistent effect of legal origins on female economic empowerment in sub-Saharan Africa, and how ancestral cultural norms of gender roles may attenuate or exacerbate this effect. Taking advantage of the arbitrary division of ancestral ethnic homelands across countries with different legal origins, we directly compare women among the same ethnic group living in civil law countries and common law countries. We find that, on average, women in common law countries are significantly more educated, are more likely to work in the professional sector, and are less likely to marry at young age. However, these effects are either absent or significantly lower in settings where ancestral cultural norms do not promote women's rights and empowerment. In particular, we find little effect in bride price societies, patrilocal societies, and societies where women were not involved in agriculture in the past. Our findings imply that to be optimal, the design of formal institutions should account for ancestral traditions. |
| Keywords: | Legal Origins, Ancestral Norms, Women's Empowerment, Gender Roles. |
| JEL: | D03 I25 J16 N37 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:2002e&r=all |
| By: | Badar Mohammad Almeajel Alanazi (Shaqra University) |
| Abstract: | This paper aims to develop a practical framework for effective corporate governance in emerging economies. Using qualitative data, we explain the need for the effective implementation of corporate governance through a comparative legal analysis of two countries: Australia and Saudi Arabia. Our analysis indicates that emerging countries in Asia and the Middle East, such as Saudi Arabia, lack proper accountability, management, and understanding of the contractual legal agreement that defines business relationships in corporate organizations. These observations are consistent with the agency theory of corporate governance, which theorizes that effective implementation of corporate governance requires effective management of organizational resources and avoidance of conflict of interest between and among managers and shareholders. Our study enhances our understanding of the ways countries could achieve the proper implementation of corporate governance in practical terms. |
| Keywords: | Corporate Governance, Effective Implementation, Law, Legal Analysis, Australia, Saudi Arabia |
| Date: | 2020–02 |
| URL: | http://d.repec.org/n?u=RePEc:sek:ibmpro:10112634&r=all |
| By: | Lucia Dalla Pellegrina; Giorgio Di Maio; Donato Masciandaro; Margherita Saraceno |
| Abstract: | Excessive and useless reporting, called “crying wolf effect”, is a crucial shortcoming that any anti-money laundering (AML) design aims to address and fix. For this reason, in these years the AML policy has switched both in the US and in Europe from a rule- to a risk-based approach. This study investigates theoretically and empirically whether the risk-based approach delivers the expected results. The theoretical model shows that a tradeoff can emerge between accuracy – less type-I and type-II errors – and deterrence. The empirical analysis, conducted in the aftermath of the introduction of the risk-based approach confirms such a tradeoff in the case of Italy, where deterrence is maximized, while sacrificing accuracy. On this respect, data suggest that Italian bankers are likely to act as crying wolves. |
| Keywords: | Anti-Money Laundering; Suspicious Transaction Reporting; Standard of evidence; Type-I error; Type-II error; Deterrence; Italy. |
| JEL: | G2 K2 K4 |
| Date: | 2020–06 |
| URL: | http://d.repec.org/n?u=RePEc:mib:wpaper:444&r=all |
| By: | Ennis, Sean; Ivaldi, Marc; Lagos, Vicente |
| Abstract: | This paper examines the impact of most favored nation (MFN) clauses on retail prices, taking advantage of two natural experiments that changed vertical contracting between hotels and major digital platforms. The broad E.U. intervention narrowed the breadth of "price parity" obligations between hotels and major Online Travel Agencies (OTAs). Direct sales by hotels to customers subsequently became relatively cheaper. Comparisons with hotel pricing outside the E.U. confirm the reduction in prices for mid-level and luxury hotels. France and Germany went further and eliminated all price-parity agreements. This stronger intervention was associated solely with a significant additional price-reducing effect for mid-level hotels in Germany. Overall, wide MFNs are associated with higher retail prices. Regulating MFNs reduced prices with primary effects coming either from the narrow price-parity intervention or, perhaps, from direct sales becoming cheaper than OTAs in both E.U. and non-E.U. countries, and, interestingly, not from complete elimination of MFNs. |
| Keywords: | Digital Platforms; Hotel Industry; Impact Evaluation; Most favored customer; Most favored nation; Online Travel Agency; Price Parity Clause |
| JEL: | K21 L14 L42 L81 |
| Date: | 2020–05 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:14771&r=all |
| By: | Abel Brodeur (Department of Economics, University of Ottawa); Taylor Wright (Department of Economics, University of Ottawa, Ottawa, ON) |
| Abstract: | Using the universe of individual asylum cases in the United States from 2000-2004 and a difference-in-differences research design, we test whether Sept. 11, 2001 decreased the likelihood that applicants from Muslim-majority countries were granted asylum. Our estimates suggest that the attacks resulted in a 3.2 percentage point decrease in the likelihood that applicants from Muslim-majority countries are granted asylum. The estimated effect is larger for applicants who share a country of origin with the Sept. 11, 2001 attackers. These effects do not differ across judge political affiliation. Our findings provide evidence that emotions affect the decisions of judges. |
| Keywords: | Courts, Crime, Immigration, Judicial Decision, Sentencing and Terrorism. |
| JEL: | D74 K4 K37 P48 |
| Date: | 2019 |
| URL: | http://d.repec.org/n?u=RePEc:ott:wpaper:1906e&r=all |
| By: | Ram Mohan, M.P.; Kini, Els Reynaers |
| Abstract: | The 2018 decision by the International Court of Justice (ICJ) in which it for the first time addressed compensation for environmental damage in the case Certain Activities Carried Out by Nicaragua in the Border Area (Costa Rica v. Nicaragua) – Compensation Owed by The Republic of Nicaragua to The Republic of Costa Rica (‘Costa Rica case’) serves as the perfect opportunity to take stock of where international environmental law stands in terms of liability and compensation for environmental damage. While keeping in mind the distinct features between State responsibility for wrongful acts, the international liability of States in the absence of wrongfulness and the civil liability of persons along with the secondary liability of States as addressed in international treaties (in Part II), this paper seeks to focus on the core elements which one could find at the center of a Venn diagram between these various liability regimes (in Part III), to know: how are international bodies as well as domestic courts, international treaties and national legislations, defining and interpreting environmental damage, and applying it in concrete cases where compensation for environmental damage is in order? What is the standard of care applicable to the no harm obligation – is it based on a fault-based regime, strict or even absolute liability? Which methodology does one apply to calculate environmental harm? Despite some of the progress made with regard to the theoretical aspects of environmental damage, this paper will also review how courts fill in the contours when assessing environmental damages, including their reliance on equity as well as punitive damages when deciding cases, and assess whether international and domestic courts sufficiently rely on independent experts and valuation methods to calculate natural resource damages. In Part IV we will more closely analyze how the weaknesses of the international regime for civil liability for oil pollution has triggered interesting and more robust domestic legislative responses, based on a brief analysis of the Deepwater Horizon oil spill in the United States and the Erika oil spill disaster in France. The red thread running through this paper is that there is a natural and mutual influence between international environmental law developments, be it soft law, treaties or Judgments by the ICJ, and domestic legislative or judicial responses and reasonings. We will be reviewing these various facets through the prism of the Costa Rica case and contrast some of the ICJ’s approaches and conclusions vis-à-vis compensation for environmental damage with responses and methodologies adopted by domestic courts and national legislatures as well as international treaty regimes and international adjudicating bodies. In doing so, we will be able to better place the Costa Rica case in the context of contemporary environmental law developments and identify areas where the ICJ could have walked a more proactive judicial policy path (Part V). |
| Date: | 2020–06–12 |
| URL: | http://d.repec.org/n?u=RePEc:iim:iimawp:14627&r=all |
| By: | James A. Schmitz |
| Abstract: | Today, monopolies inflict great harm on low- and middle-income Americans. One particularly pernicious way they harm them is by sabotaging low-cost products that are substitutes for the monopoly products. I'll argue that the U.S. housing crisis, legal crisis, and oral health crisis facing the low- and middle-income Americans are, in large part, the result of monopolies destroying low-cost alternatives in these industries that the poor would purchase. These results would not surprise those studying monopolies in the first half of the 20th century. During this period extensive evidence was developed showing monopolies engaging in these same activities and many others that harmed the poor. Models of monopoly were constructed by giants in economics and law, such as Henry Simons and Thurman Arnold, to explain these impacts of monopoly. These models are of sabotaging monopolies. Unfortunately, in the 1950s, the economics profession turned its back on this evidence, these models and these giants. It embraced the Cournot model of monopoly, that found in textbooks today. In this model the monopolist chooses its price, nothing more. Gone are the decisions on whether to sabotage substitutes or to employ any of the other weapons at the disposal of sabotaging monopolies. I'll call this Cournot monopoly the toothless monopoly. Using this model, the economics profession has concluded that the costs of monopoly are small. But the toothless monopoly model is ill-equipped to study the "costs of monopoly." By relying on it, the economics profession has made major errors in its study of monopoly. |
| Keywords: | Inequality; Monopoly; Cournot; Competition; Harberger; Sabotage |
| JEL: | K0 D22 L12 K21 D42 L0 |
| Date: | 2020–05–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedmsr:87988&r=all |
| By: | Cragun, Randy |
| Abstract: | With the Australian Family Project and 1970 National Fertility Survey, this paper uses between-states variation in the timing of youth consent laws in Australia and the US in the 1960s and 1970s to show that women in Australia who had never used the pill were 2 percentage points more likely to start at age 19 under an age of majority of 18 instead of 21 (from a base rate around 2%). Women living under liberalized youth consent and legal access to the pill in the US were 10 percentage points more likely to start the pill at age 20. |
| Keywords: | the pill; contraception; power of the pill; age of majority; early legal access |
| JEL: | I18 J13 J31 |
| Date: | 2019–10–24 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100871&r=all |
| By: | Muttaqin, Rahmat; Akın, Emre |
| Abstract: | As part of the G20 countries, Indonesia and Turkey have shown their commitments to the OECD/G20 BEPS Project since the very beginning, including the MLI Project. Along with the other 66 jurisdictions, Indonesia and Turkey signed the MLI on 7 June 2017. Indonesia and Turkey already have a tax treaty in force. In its MLI’s position as of 7 June 2017, Indonesia included its tax treaty with Turkey as one of CTAs and vice versa. Therefore, once both countries have completed all the procedural requirements of the MLI, the MLI provisions will have effect on the existing tax treaty. This article is intended to give a picture for the readers on how the MLI impacts the existing tax treaty between Indonesia and Turkey. This article may also serve as a projection on what a synthesised text might look like even though it has not been published yet by the competent authority of either country. For the MLI changes to apply effectively to the Indonesia-Turkey tax treaty, both countries must adopt the same provisions (unless an asymmetrical adoption is allowed in particular cases). The Authors concluded that considering both countries’ positions at this moment, some of the MLI provisions will affect the existing Indonesia-Turkey tax treaty, i.e. Article 6, 7, 9, 12, 13, 15, and 16 of the MLI. New provisions to be adapted will contribute to preventing BEPS concerns, e.g. through treaty shopping. The authors then recommend that both countries should also need to revise their domestic laws in order to accommodate new features in treaty post-MLI, for instance, the introduction of PPT rule as GAAR in tax treaty should also be accompanied by a comprehensive set of guidelines for tax authorities and must be administered transparently. Following the intention of both countries to increase the trading volume, the Indonesia-Turkey tax treaty post-MLI will play an important role in the future. |
| Keywords: | MLI, OECD, G20, BEPS, Tax Treaty, Tax Law, Indonesia, Turkey, International Tax, PPT, GAAR |
| JEL: | H26 K33 K34 |
| Date: | 2020–05–07 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:100675&r=all |
| By: | Gräbner, Claudius; Tamesberger, Dennis; Heimberger, Philipp; Kapelari, Timo; Kapeller, Jakob |
| Abstract: | By studying the factors underlying differences in trade performance across European economies, this paper derives six different 'trade models' for 22 EU-countries and explores their developmental and distributional dynamics. We first introduce a typology of trade models by clustering countries based on four key dimensions of trade performance: endowments, technological specialization, labour market characteristics and regulatory requirements. The resulting clusters comprise countries that base their export success on similar trade models. Our results indicate the existence of six different trade models: the 'primary goods model' (Latvia, Estonia), the "finance model" (Luxembourg), the "flexible labour market model" (UK), the "periphery model" (Greece, Portugal, Spain, Italy, France), the 'industrial workbench model' (Slovenia, Slovakia, Poland, Hungary, Czech Republic), and the 'high-tech model' (Sweden, Denmark, Netherlands, Belgium, Ireland, Finland, Germany and Austria). Subsequently, we comparatively analyse the economic development and trends in inequality across these trade models. We observe a shrinking wage share and increasing personal income inequality in most of the trade models. The "high-tech model" is an exceptional case, being characterised by a relatively stable economic development and an institutional setting that managed to counteract rising inequality. |
| Keywords: | Trade policy,cluster analysis,European Union,growth models,trade models |
| JEL: | F10 F16 F43 J3 J5 K2 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ifsowp:6&r=all |