nep-law New Economics Papers
on Law and Economics
Issue of 2020‒09‒07
sixteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Some Aspects Specific to the Investigation of Corruption Acts By Nicoleta Elena Heghes
  2. COVID-19 and Crime: Effects of Stay-at-Home Orders on Domestic Violence By Lindsey Rose Bullinger; Jillian B. Carr; Analisa Packham
  3. The Late Emerging Consensus Among American Economists on Antitrust Laws in the Second New Deal (1935-1941) (Revised Version) By Thierry Kirat; Frederic Marty
  4. Entry limiting agreements: First mover advantage, authorized generics and pay-for-delay deals By Farasat A.S. Bokhari; Franco Mariuzzo; Arnold Polanski
  5. Rule of Law in Labor Relations, 1898-1940 By Price V. Fishback
  6. Building the evidence for OECD integrity and anti-corruption agenda: The current situation and avenues for future analysis By Zuzana Smidova
  7. Prospects on the European Investigation Order in Relation to Joint Methods Deficiencies By Marius-Adrian Arva
  8. Immigration and Violent Crime: Evidence from the Colombia-Venezuela Border By Brian G. Knight; Ana Tribin
  9. Particularities on Child-Friendly Justice Concerning Inoperability of Judicial Procedures By Alina Zaharia
  10. Developing international perspectives on digital competition policy By Sean F. Ennis; Amelia Fletcher
  11. Occupational Licensing and Labor Market Fluidity By Morris M. Kleiner; Ming Xu
  12. The Importance of Reconstitution as a Criminalistics Tactical Procedure By Oancea Clara Maria
  13. Do Non-Compete Clauses Undermine Minimum Wages? By Thomas Kohler; Fabian Schmitz
  14. Deterrence Theory in Paraguay: Exploring Fraud and Violation of Trust Cases By Schneider, Andreas
  15. Who Watches the Watchmen? Local News and Police Behavior in the United States By Mastrorocco, Nicola; Ornaghi, Arianna
  16. Procedures for Preventing the Insolvency of Professionals By Daniela Ciochina

  1. By: Nicoleta Elena Heghes (Dimitrie Cantemir Christian University of Bucharest, Romania)
    Abstract: Corruption can be considered the oldest form of crime that has accompanied the development of human society so far, and probably a long time from here on. The topicality of the approached topic has its roots in the urgent need to combat this dangerous reality by adopting a fair and stable legislation, without the existence of loopholes to encourage criminal perseverance. In this article we will emphasize the need for legal regulation of the facts and acts of corruption both internally and internationally, as well as the presentation of the methods or tactics that can prevent or, as the case may be, combat these antisocial facts if the function of prevention of the law did not produce the expected effects, such as the search, the hearing of the suspects, the accused and the witnesses, the flagrant or the spot investigation. With its sanction, corruption has also become a legal phenomenon, crossing purely social borders and becoming a source of criminal consequences. Thus, corruption becomes a legal fact, regulated by rules that attract the most serious form of liability in case of their violation.
    Keywords: crime scene investigation, corruption, flagrant, hearing, investigation, search
    Date: 2020–04
  2. By: Lindsey Rose Bullinger; Jillian B. Carr; Analisa Packham
    Abstract: COVID-19 has led to an abrupt change in time spent at home, with many cities and states implementing official stay-at-home (SAH), or “lockdown” policies. Using cell phone block-level activity data and administrative 911 and crime data from the city of Chicago, we estimate the effects of the Illinois governor's SAH order on calls for police service, crimes recorded by police, and arrests made relating to domestic violence. We find that the SAH order announcement increased time spent at home, leading to a decrease in total calls for police service, but a subsequent increase in domestic violence-related calls for police service. Effects are larger in areas with a high proportion of renters. These effects for domestic violence calls, however, are at odds with reported domestic-related crimes and arrests by police officers; we find that official reports and arrests for domestic violence crimes fell by 8.7 percent and 26.3 percent, respectively. Trends in reported domestic violence crimes mirror drops in total reported crimes; however, declines for domestic violence crimes are an order of magnitude smaller than the decline in other non-violent crime rates. Overall, we estimate that nearly 1,000 cases of domestic violence crimes went underreported between March and April.
    JEL: I18 J12 K42
    Date: 2020–08
  3. By: Thierry Kirat; Frederic Marty
    Abstract: This paper presents the late convergence process from American economists that led them to support a strong antitrust enforcement in the Second New Deal despite their long-standing distrust toward this legislation. The paper presents the path from which institutionalist economists, on one side, and members of the First Chicago School, on the other one, have converged on supporting the President F.D. Roosevelt administration towards reinvigorating antitrust law enforcement as of 1938, putting aside their initial preferences for a regulated competition model or for a classical liberalism. The appointment of Thurman Arnold at the head of the Antitrust Division in 1938 gave the impetus to a vigorous antitrust enforcement. The 1945 Alcoa decision crafted by Judge Hand embodied the results of this convergence: in this perspective, the purpose of antitrust law enforcement does consist in preventing improper uses of economic power. Read the first version of this publication
    Keywords: Antitrust,Efficiency,Economic Power,Institutional Economics,Chicago School,New Deal,
    JEL: B25 K21 L40 N42
    Date: 2020–08–25
  4. By: Farasat A.S. Bokhari (Centre for Competition Policy and School of Economics, University of East Anglia); Franco Mariuzzo (Centre for Competition Policy and School of Economics, University of East Anglia); Arnold Polanski (School of Economics, University of East Anglia)
    Abstract: During patent litigation, pay-for-delay deals involve a payment from a patent holder of a branded drug to a generic drug manufacturer to delay entry and withdraw the patent challenge. In return for staying out of the market, the generic firm receives a payment, and/or an authorized licensed entry at a later date, but before the patent expiration. We examine why such deals are stable when there are multiple potential entrants. We combine the first mover advantage for the first generic with the ability of the branded manufacturer to launch an authorized generic to show when pay-for-delay deals are an equilibrium outcome. We further show that limiting a branded firm's ability to launch an authorized generic prior to entry by a successful challenger will deter such deals. However, removing exclusivity period for the first generic challenger will not.
    Keywords: pharmaceuticals, pay-for-delay, reverse payments, authorized generics, first mover advantage
    JEL: L41 K21 K41
    Date: 2020–01–01
  5. By: Price V. Fishback
    Abstract: The paper examines changes in labor regulation between 1898 and 1940 in the context of issues related to rule of law in two areas. 1) Many see the 1905 Lochner Supreme Court decision on men’s hours laws as the beginning of 30 years in which labor regulation was stymied by the doctrine of “freedom of contract.” Seeing close votes and substantial turnover of judges on the Supreme Court, the de facto situation was more complex as some states maintained their laws or passed new ones. 2) Labor disputes led to some of the greatest threats to rule of law. To limit descents into violence, states passed arbitration laws, pro-union laws, and anti-union laws. Uncertainty about the rules led to a sharp rise in strikes and violence after World War I and again when Congress and the states sought to establish the rules for collective bargaining between 1932 and 1937. A panel analysis of the impact of state laws in bituminous coal mining from 1902 to 1941 shows that the arbitration and pro-union laws were associated with less violence during periods of uncertainty. During several periods state pro-union laws were associated with more strikes and state anti-union laws with fewer strikes.
    JEL: H77 J08 J52 J88 K31 N31 N32
    Date: 2020–07
  6. By: Zuzana Smidova
    Abstract: Potential economic benefits of integrity and anti-corruption policies seem large. Nevertheless, much of the existing empirical evidence lacks precise and actionable policy indicators that could guide policy makers on tangible improvements of successful reforms. To move the policy analysis further, both policy and outcome indicators are needed. In this context, the paper reviews OECD’s involvement in integrity and anti-corruption agenda as well as available indicators of integrity and anti-corruption policies and outcomes. It outlines avenues for future analysis that include assessment of public procurement procedures and policy drivers explaining experience with corruption and public spending efficiency.
    Keywords: anti-corruption, corruption, corruption outcome indicators, experience of corruption, integrity, OECD, perceived corruption, policy indicators, public procurement
    JEL: D72 D73 K42
    Date: 2020–09–04
  7. By: Marius-Adrian Arva (Police Academy “Alexandru Ioan Cuza†of Bucharest, Romania,)
    Abstract: We emphasize in the present study that, in the context of cross-border crime evolution, it was developed an instrument based on mutual recognition of judicial decisions by member states authorities from the European Union, entitled the European Investigation Order, which, although was intended as a unitary approach in the procurement of evidence process, compared to the old fragmentary system, this purpose could not be achieved. We also point out the dangers of violating the protective guarantees of the persons rights, for those individuals that are targeted by the investigative measures, in relation to particularities of various national penal systems regarding the procurement by the executing State of evidence to be used in judicial procedures by the issuing State.
    Keywords: European Investigation Order, human rights infringement, transnational evidence procurement
    Date: 2020–04
  8. By: Brian G. Knight; Ana Tribin
    Abstract: This paper investigates the link between violent crime and immigration using data from Colombian municipalities during the recent episode of immigration from Venezuela. The key finding is that, following the closing and then re-opening of the border in 2016, which precipitated a massive immigration wave, homicides in Colombia increased in areas close to the border with Venezuela. Using information on the nationality of the victim, we find that this increase was driven by homicides involving Venezuelan victims, with no evidence of a statistically significant increase in homicides in which Colombians were victimized. Thus, in contrast to xenophobic fears that migrants might victimize natives, it was migrants, rather than natives, who faced risks associated with immigration. Using arrests data, there is no corresponding increase in arrests for homicides in these areas. Taken together, these results suggest that the increase in homicides close to the border documented here are driven by crimes against migrants and have occurred without a corresponding increase in arrests, suggesting that some of these crimes have gone unsolved.
    JEL: J15 J18 K42
    Date: 2020–07
  9. By: Alina Zaharia (Legal adviser at I.I.O. “Grigorian Andreea†Iași, Romania)
    Abstract: If the purpose of applying a punishment to a felon is firstly retributive, then restorative, when it comes to a child perpetrator, the primary concern to specialists in the legal, psychological and social assistance field must be the effective protection and social reintegration of the minor. The courts for minors are meant to be able to determine the needs of every child who falls under the law, regardless of its quality (perpetrator, victim, witness, collateral victim). Creating a child-friendly justice system gives the child a safe and ideal space where all his rights are respected and his voice is heard, regardless of age, maturity or social status, benefiting from social and legal assistance for the entire duration, prior, incipient and subsequent to a judicial procedure in which the child takes part. In general, court proceedings may be delayed due to certain intervening factors that may have a negative impact on the parties, which is in contradiction with the act of justice. In this context, we point out that the delays in the court proceedings involving children brings with them the victimization and traumatization of the child. Finally, institutional actors have a duty to keep away a child from the rigid and traumatic side of applying justice and transforming it into child-friendly justice.
    Keywords: child, victim, juvenile justice, child-friendly justice, human rights
    Date: 2020–04
  10. By: Sean F. Ennis (Centre for Competition Policy and Norwich Business School, University of East Anglia); Amelia Fletcher (Centre for Competition Policy and Norwich Business School, University of East Anglia)
    Abstract: The year 2019 was a turning point in the debate around how to address competition issues in digital platform markets. At the start of the year, the focus was on reform of competition law. By July, there had been calls – on both sides of the Atlantic – for pro-competitive ex ante regulation. This paper considers these developments through the lens of three influential expert reports, from the EC, UK and US. While the reports offer similar diagnoses of the underlying economic drivers of competition concerns in digital platform markets, they reach somewhat different policy conclusions. The EC report, which was commissioned first, highlights recommendations for antitrust. While it recognises that a regulatory regime may be needed in the longer run, this option is not considered in any detail. By contrast, the UK and US expert reports argue strongly for ex ante regulation. There are other differences too. While the US and EC experts were inclined to relax or reverse burdens of proof for both mergers and abuse of dominance, albeit in specified circumstances only, the UK experts did not recommend this. This paper compares these reports under the categories of mergers, dominance, data, regulation, and international.
    Keywords: Antitrust, Competition Policy, Digital Markets, Platforms, Merger Policy, Regulation, Big Data
    JEL: K21 L13 L40 L50 L86
    Date: 2020–08–24
  11. By: Morris M. Kleiner; Ming Xu
    Abstract: We show that occupational licensing has significant negative effects on labor market fluidity defined as cross-occupation mobility. Using a balanced panel of workers constructed from the CPS and SIPP data, we analyze the link between occupational licensing and labor market outcomes. We find that workers with a government-issued occupational license experience churn rates significantly lower than those of non-licensed workers. Specifically, licensed workers are 24% less likely to switch occupations and 3% less likely to become unemployed in the following year. Moreover, occupational licensing represents barriers to entry for both non-employed workers and employed ones. The effect is more prominent for employed workers relative to those entering from nonemployment, because the opportunity cost of acquiring a license is much higher for employed individuals. Lastly, we find that average wage growth is higher for licensed workers than non-licensed workers, whether they stay in the same occupation in the next year or switch occupations. We find significant heterogeneity in the licensing effect across different occupation groups. These results hold across various data sources, time spans, and indicators of being licensed. Overall, licensing could account for almost 8% of the total decline in monthly occupational mobility over the past two decades.
    JEL: H1 J01 J18 J24 J38 J4 J44 J62 J8 J88 K0 K2 K31
    Date: 2020–07
  12. By: Oancea Clara Maria (Dimitrie Cantemir Christian University of Bucharest)
    Abstract: The advantages of reconstitution in finding out the truth, the necessary requirement for obtaining a fair criminal conviction, are undeniable, of which it is noticeable to carry out the verification directly by the judicial body regarding the possibility of committing the criminal facts, in the way in which they were claimed by denunciation, complaint or the notification of ex officio, and of the perception of these criminal facts by the eyewitnesses or the persons directly involved in their commission. With the help of this tactical procedure, a series of questionable evidence or simple indications can be confirmed or removed, which, in the absence of the reconstitution, would make the investigation more difficult than it would help the criminal investigation bodies. In any case, the conclusions of a reconstitution, like any other means of proof in the criminal process, do not have a special probative value, by themselves, but must be appreciated and analyzed in relation to the other evidence administered in the criminal case, as required by the rules established in par. 97 of the Code of Criminal Procedure.
    Keywords: reconstitution, tactical procedure, eyewitness, criminal investigation, criminal facts, truth, criminal conviction, judicial body, evidence, rules
    Date: 2020–04
  13. By: Thomas Kohler (Bonn Graduate School of Economics, briq); Fabian Schmitz (Bonn Graduate School of Economics, ECONtribute)
    Abstract: Many low-wage workers in the United States are subject to non-compete clauses, which forbid them to work for competitors. Empirical research has found a link between the prevalence of non-compete clauses and minimum wage legislation. To explain this link, we propose a moral hazard model with minimum wages. Non-compete clauses can be used to punish failure. We characterize the optimal contracts with and without the possibility to use a non-compete clause. We find that the principal only uses a non-compete clause if minimum wages are suciently high. Non-compete clauses transfer utility from the agent to the principal because they increase the equilibrium effort without increasing the wages. If non-compete clauses can be arbitrarily severe, there is no minimum wage for which the agent gets a rent. If non-compete clauses are bounded, both the principal and the agent might be made better off than without non-compete clauses.
    Keywords: non-compete clause, minimum wage, limited liability, moral hazard, rent extraction
    JEL: D86 J32 J41 K31
    Date: 2020–08
  14. By: Schneider, Andreas
    Abstract: This research paper contributes to the literature of deterrence theory in general, and in particular, with respect to white-collar crime, offering valuable insight by using a unique dataset of fraud and violation of trust incidents within the jurisdiction of Paraguay. Descriptive evidence shows a clear and continuous misallocation of funds and human capital, therefore providing less efficient services for the public. Regression analysis suggests that clearance rate exerts a highly significant effect in deterring fraud, but the results are not clear for violation of trust incidents. Despite the limitations of available data, results confirm the deterrence theory in Paraguay. However, for more than two-thirds of victims, not even an attempt was made to seek justice. As a side-result, it seems that a soft-on-crime strategy, induced from the former German penal code, has led to an increasing share of pre-trial diversion, therefore enhancing white-collar crimes like fraud and violation of trust, due to impunity.
    Keywords: deterrence; Paraguay; fraud; crime; soft on crime
    JEL: K00 K14
    Date: 2019–01–13
  15. By: Mastrorocco, Nicola (Trinity College Dublin); Ornaghi, Arianna (University of Warwick)
    Abstract: Does media content influence local institutions? We study this question by looking at how a negative shock to local crime-related news, induced by the acquisition of local TV stations by the Sinclair Broadcast Group, affects U.S. municipal police departments. In particular, we implement a triple differences-in-differences design that exploits the staggered timing of acquisitions 2010-2017, together with cross-sectional variation in whether municipalities are covered by local news at baseline, a proxy for exposure to the shock. First, using a newly collected dataset of 300,000 transcripts of local newscasts, we document that once acquired by Sinclair, TV stations decrease news coverage of local crime. Second, we find that after Sinclair enters a media market, municipalities that were likely to be in the news at baseline experience 8% lower violent crime clearance rates with respect to municipalities that were very rarely in the news in the first place. The main mechanism we propose is that the change in content induces police officers to decrease the effort allocated to clearing violent crimes, due to a decline in the salience of crime as an issue in the public opinion.
    Date: 2020
  16. By: Daniela Ciochina (Romanian National Union of Bar Associations Arbitrator - European Court of Arbitration, Vienna International Arbitral Center)
    Abstract: Insolvency procedures are constituted as measures aimed for the debtor and/or creditor/s either to help the former to recover from its financial duress or the later to recover as much debt as is possible without prejudice to others. The insolvency decision must be taken in due time in order to be able to find financing and reorganization solutions for the activity, so as to avoid the bankruptcy of the professional. Most legal systems integrate certain warning-procedures (pre-insolvency procedures) for the debtor or creditor to start so as the former is not subjected to the implications of the more serious insolvency procedure when, in most cases, is too late to recover. The professional is defined by art. 3 par. 2 Civil Code as anyone that is operating an enterprise. The procedures provided by this law apply to these professionals with the exception of those exercising liberal professions, as well as those in respect of which special provisions are provided regarding their insolvency regime (e.g. banks, insurance companies). Insolvency legislation is based on guiding principles, which are found in the Law no 85/2014 regarding prevention procedures of insolvency and insolvency. Starting from my opinion that some of these principles on which the prevention of insolvency of professionals in Law no 85/2014 is based, are sufficiently artificial and rigid, broken by practical applicability, I will address in this article the exclusion of the true basic rules that are disregarded or omitted from a written point of view and especially from the point of view of applicability in practical reality.
    Keywords: insolvency, bankruptcy, professional, company, legal person, contract, procedure, administrator, judicial administrator, syndic judge, creditor, debtor, creditors
    Date: 2020–06

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