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on Law and Economics |
| By: | Sofia Amaral; Sonia Bhalotra; Nishith Prakash |
| Abstract: | We examine the impact of establishing women police stations (WPS) on reporting of gender-based violence. Using administrative crime data and exploiting staggered implementation across Indian cities, we find that the opening of WPS is associated with an increase in police reports of crimes against women of 29 percent, a result driven by domestic violence. This appears to reflect reporting rather than incidence as we find no changes in femicide or in survey-reported domestic violence. We also find some evidence of an increase in women’s labor supply following WPS opening, consistent with women feeling safer once the costs of reporting violence fall. |
| Keywords: | women police stations, gender-based violence, women in policing, India |
| JEL: | J12 J16 J78 K14 K31 K42 N92 I12 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9002&r= |
| By: | Grigory V. Kalyagin (Department of Economics, Lomonosov Moscow State University) |
| Abstract: | The article is devoted to answering the question: is it possible to ensure optimal law enforcement from the point of view of public wel-fare in the presence of non-systemic corruption in law enforcement agencies? Unlike a number of previous papers (see, in particular: [Bowles and Garoupa, 1997; Chang and al., 2000]), in our model, there is no differentiation of police officers either by the costs of participating in corruption transactions, or by any other criteria. Therefore, all police officers react to the incentives created by the principal in the same way: if one po-lice officer, under the given conditions, prefers corruption to honest behavior, then all the rest will choose the same. In our opinion, the greater realism of this assumption in comparison with the alternative one is due to the mechanism of adverse se-lection in the labor market and the phenomenon of self-reproduction of corruption discussed in detail in the literature (see, in particular: [Andvig and Moene, 1990; Tirole, 1996, Bardhan, 1997]). Another key assumption of the article is the information that the agent (policeman) communicates to the princi-pal is hard information. In other words, if he has accurately established the event of the crime and the identity of the offender, he can either tell the principal the truth, or he cannot report anything. A police officer does not have the opportunity to report a crime that did not actually occur or to accuse an obviously innocent person of committing a crime. This paper analyzes various schemes for the payment of remuneration by the principal to law enforcement officers and their reaction to the incentives created in this way. It is proved that if, in the absence of ad-ditional remuneration for law enforcement officers and with the pay-ment of effective wages, it is impossible to achieve the first best result, then when the principal establishes additional remuneration for each solved crime at a level at which the optimal strategy for law enforce-ment officers changes from corruption to fair, it is perhaps even with the spread of corruption in law enforcement agencies. |
| Keywords: | casual corruption, enforcement, deterrence, information, crime and punishment |
| JEL: | D73 D82 K14 K42 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:upa:wpaper:0035&r= |
| By: | Alessandra Fenizia (George Washington University); Raffaele Saggio (University of British Columbia) |
| Abstract: | This paper evaluates the long-run economic impact of the fight against organized crime. It uses rich administrative data from Italy and studies one of the most aggressive policies aimed at combating criminal organizations: the city council dismissal. Under this policy, local administrations believed to be infiltrated by the Mafia are dismissed by the central government and the municipality is then administrated by a team of public servants appointed by the central government for approximately two years. Using a matched difference-in-differences design, we find that this policy fosters economic growth. Specifically, the city council dismissal increases formal employment by 16.9% nine years after the dismissal and this effect appears to be partially driven by the entry of new workers in the formal sector. Treated municipalities also display higher economic dynamism and a surge in industrial real estate prices in the aftermath of the intervention. These effects appear to be mediated by an increase in the quality of local politicians elected after the city council dismissal. We show that these newly elected politicians raise local tax compliance and were able to increase expenditures on roads and infrastructures. Overall, our results imply that there are significant long-run economic benefits associated with targeted law enforcement actions against criminal organizations. |
| JEL: | D73 G38 K42 |
| Date: | 2020 |
| URL: | http://d.repec.org/n?u=RePEc:gwi:wpaper:2020-22&r= |
| By: | Sinning, Mathias (Australian National University); Zhang, Yinjunjie (Australian National University) |
| Abstract: | Very little is known about the efficient collection of fines despite their indispensable contribution to local government budgets. This paper fills an important gap in the literature by studying the effectiveness of deterrence (enforcement) and non-deterrence (social norms) letters that aim to improve the collection of traffic and parking fines. We discuss potential mechanisms through which these letters may affect fine compliance and present results from a natural field experiment that was implemented in collaboration with the government of the Australian Capital Territory (ACT). We find that both letters increase fine payments significantly relative to a control group that did not receive a letter. The effect of the enforcement letter is stronger than that of the social norms letter. Our analysis of heterogenous treatment effects indicates that addressing social norms does not change the behavior of young offenders, those who committed a speeding offence, those with a long outstanding debt and those with a debt above the median. In contrast, the enforcement letter is generally effective across subgroups. |
| Keywords: | fine compliance, natural field experiment, nudges, enforcement, social norms |
| JEL: | H26 K42 C93 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14252&r=all |
| By: | Asongu, Simplice; Uduji, Joseph; Okolo-Obasi, Elda |
| Abstract: | We investigate persistence and determinants of deaths from conflicts in a sample of 163 countries for the period 2010 to 2015. The empirical evidence is based on Generalised Method of Moments. First, the findings are contingent on income levels, religious-domination, landlockedness, regional proximity and legal origins. The persistence of deaths in internal conflict is more apparent in coastal, French civil-law and Islam-oriented countries, compared to landlocked, English common law, Christian-oriented countries, respectively. Second, the following factors are generally responsible for driving deaths from internal conflicts: homicides, conflict intensity and conflicts fought. Furthermore, incarcerations have negative effects on internal conflicts. Justifications for the established tendencies and policy implications are discussed. |
| Keywords: | War; Conflicts; Global evidence; Persistence |
| JEL: | H56 K42 L64 P50 |
| Date: | 2020–01 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107240&r= |
| By: | Keith E. Maskus; Alessandro Peri; Anna Rubinchik |
| Abstract: | Proceeds from illicit activities percolate into the legal economy through several channels. We exploit international regulations targeting money laundering via the financial sector to identify the flows of “dirty money” into legitimate establishments: business-based money laundering (BBML). Our variant of the monopolistic competition model embeds a drug cartel that channels illicit proceeds into an offshore financial investment and into BBML. Tighter regulations in one channel increase the flow in the other. We use a research design that links U.S. county business activity to the evolution of anti-money-laundering regulations in Caribbean jurisdictions to provide the first empirical evidence of the phenomenon. |
| Keywords: | money laundering, business establishment, Panama Papers, anti-money-laundering regulations, monopolistic competition |
| JEL: | F30 K40 G28 H00 D58 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9019&r= |
| By: | Iwasaki, Ichiro; Kočenda, Evžen; Shida, Yoshisada |
| Abstract: | We analyze factors behind 23,213 distressed acquisitions in European emerging markets from 2007–2019. Besides the impact of financial ratios, legal form, ownership structure, firm size, and age, we emphasize the role of institutions and channels of their propagation. We show that the quality and enforcement of insolvency laws are linked with the lower probability of distressed acquisitions, followed by corruption control and progress in banking reforms. The impact of institutions is larger in lessadvanced countries as compared to economically stronger ones. The effect of institutions increased after the financial crisis but declined as the economic situation improved. |
| Keywords: | distressed acquisitions, mergers, European emerging markets |
| JEL: | C35 D02 D22 E02 G34 K20 L22 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:hit:rrcwps:90&r= |
| By: | Bruce Lyons (Centre for Competition Policy and School of Economics, University of East Anglia); Robert Sugden (Centre for Competition Policy and School of Economics, University of East Anglia) |
| Abstract: | There is growing public concern about the ‘unfairness’ of many pricing practices that have become common in consumer, particularly digital, markets. Industrial and behavioural economists have developed theories that explain the conditions under which these practices are profitable for firms, and their implications for consumer welfare. We identify a mismatch between the welfare economic principles used in this theoretical work and the normative perspective in which these practices are viewed as unfair. We develop a concept of ‘transactional fairness’, grounded in the normative approach of Sugden’s Community of Advantage, that is reflective of public concerns. Transactional fairness is complementary to established criteria of economic efficiency and distributional equity, but is based entirely on the relationship between individual buyer and seller. It establishes clear principles with realistic information requirements that are appropriate for compliance by firms. Regulation based on this approach can help to restore public faith in markets. |
| Keywords: | Price discrimination, unfair pricing, consumer law, competition policy |
| JEL: | D61 D63 K21 K23 L40 L51 |
| Date: | 2021–01–28 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2021_03&r= |
| By: | Elliott Ash; Sergio Galletta; Tommaso Giommoni |
| Abstract: | Can machine learning support better governance? In the context of Brazilian municipalities, 2001-2012, we have access to detailed accounts of local budgets and audit data on the associated fiscal corruption. Using the budget variables as predictors, we train a tree-based gradient-boosted classifier to predict the presence of corruption in held-out test data. The trained model, when applied to new data, provides a prediction-based measure of corruption that can be used for new empirical analysis or to support policy responses. We validate the empirical usefulness of this measure by replicating and extending some previous empirical evidence on corruption issues in Brazil. We then explore how the predictions can be used to support policies toward corruption. Our policy simulations show that, relative to the status quo policy of random audits, a targeted policy guided by the machine predictions could detect almost twice as many corrupt municipalities for the same audit rate. Similar gains can be achieved for a politically neutral targeting policy that equalizes audit rates across political parties. |
| Keywords: | algorithmic decision-making, corruption policy, local public finance |
| JEL: | D73 E62 K14 K42 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:ces:ceswps:_9015&r= |
| By: | Dong, Xiaoge |
| Abstract: | In this paper, we focus on determinants of judicial efficiency in China, with efficiency estimates of district courts obtained from data envelopment analysis (DEA). Our dataset comprises 1584 local courts pooled from the year 2014 - 2017. Controlling for local economic development level as well as the financial status and staff quality of local courts, we find a significant and robust impact of the location of local courts. More specifically, the performance of a court will be better when it is located in/closer to a higher city tier, the city center, the city government, or the provincial government even if the economic development of such areas is no better than others. Such courts probably receive (in)-direct political support and favorable local policy. Our result thus also has implications for judicial independence in China. Although the Chinese Central Government has been trying to separate the local legal system from local politics, local courts are still being affected by geopolitical factors in reality. |
| Keywords: | Chinese Court system,Court efficiency,data envelopment analysis,geopolitics |
| JEL: | K1 K40 K30 N45 P21 P37 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ilewps:50&r= |
| By: | Frédéric Marty (Université Côte d'Azur, France; GREDEG CNRS) |
| Abstract: | This contribution deals with the application of competition rules in the digital sector and, in particular, the distortions that can result from self-preferencing strategies. In the context of the European Commission's Digital Markets Act project and the UK's plans to regulate the major digital ecosystems, the aim is to examine the relative effectiveness of the current effects-based approach stemming from competition law enforcement, the use of per-se rules, the implementation of specific regulation or the imposition of structural remedies to address such risks. It is a question of insisting on the objectives pursued (maximisation of consumer welfare, dynamic efficiency, contestability of market positions and fairness) and on the conditions for the implementation of hybrid approaches combining the logic of sectoral regulation and procedures rooted in the enforcement of competition rules. |
| Keywords: | Digital ecosystems, self-preferencing, exclusionary abuses, exploitative abuses, remedies |
| JEL: | L12 L41 L42 L86 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:gre:wpaper:2021-20&r= |
| By: | Daniel L. Chen (TSE - Toulouse School of Economics - UT1 - Université Toulouse 1 Capitole - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Moti Michaeli (University of Haifa [Haifa]); Daniel Spiro (Uppsala University) |
| Abstract: | In many settings of political bargaining over policy, agents care not only about getting their will but also about having others approve the chosen policy thus giving it more weight. What is the effect on the bargaining outcome when agents care about such legitimacy of the policy? We study this question theoretically and empirically. We show that the median-voter theorem holds in groups that are ideologically very cohesive and in groups with extreme ideological disagreement. However, in groups with intermediate ideological disagreement, the median-voter theorem does not hold. This is since, on the individual level, ideological disagreement with the median has a non-monotonic effect on the policy. We test our model in a natural experimental setting—U.S. appeals courts—where causal identification is based on random assignment of judges into judicial panels, each consisting of three judges who rule on a case. Here judges care about legitimacy of the policy they write because a norm of consensus prevails and because increased legitimacy reduces the likelihood of the judicial case to be heard by the Supreme Court. The predicted pattern of how policies depend on the participants' ideologies are corroborated by our empirical tests. |
| Keywords: | Judicial decision making,Group decision making,Legitimacy,Ideology,Bargaining |
| Date: | 2021–03–31 |
| URL: | http://d.repec.org/n?u=RePEc:hal:wpaper:hal-03186882&r= |
| By: | Monteiro, Joseph; Prentice, Barry E. |
| Abstract: | The evolution of the motorized taxi industry in Vancouver is examined with respect to regulatory changes affecting competition. After initial laissez-faire policy, the industry was tightly regulated after 1946. As newer technologies emerged, newer types of services emerged and the demands of the public evolved. Vancouver remains one of the few large Canadian cities to resist increased competition. The protected taxi industry does not want changes pointing to congestion as a justification. The theory on externalities is examined with respect to congestion and information asymmetries. The paper document the most recent developments. |
| Keywords: | taxi regulation Vancouver competition |
| JEL: | R48 |
| Date: | 2019–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107132&r=all |
| By: | Sophie Calder-Wang; Paul Gompers; Patrick Sweeney |
| Abstract: | In this paper, we document the historically low rate of hiring of women in the venture capital sector. We find that the high-profile Ellen Pao v. Kleiner Perkins gender discrimination trial had dramatic treatment effects. In difference-in-differences regressions, we find that the rate of hiring of female venture capitalists increased substantially after the trial and that the hiring was more pronounced in states that were more receptive to the exposure. We use the state-level mandated maternity benefits as an instrument for the receptivity to the treatment effects of the Pao Trial. We also show that the fraction of founders who are female increases after the Pao Trial, but that the increase is driven entirely by the hiring of female venture capitalists. There is no increase in the propensity of male venture capitalists to invest in female founders in the post-Pao Trial period. |
| JEL: | G3 J01 J16 J7 K31 |
| Date: | 2021–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:28679&r=all |
| By: | Ale-Chilet, Jorge; Chen, Cuicui; Li, Jing; Reynaert, Mathias |
| Abstract: | We study collusion among rms in response to imperfectly monitored environmental regulation. Firms improve market prots by shading pollution and evade noncompliance penalties by shading jointly. We quantify the welfare eects of alleged collusion among three German automakers to reduce the size of diesel exhaust uid (DEF) tanks, an emission control technology used to comply with air pollution standards. We develop a structural model of the European automobile industry (2007-2018), where smaller DEF tanks create more pollution damages, but improve buyer and producer surplus by freeing up valuable trunk space and reducing production costs. We nd that choosing small DEF tanks jointly reduced the automakers' expected noncompliance penalties by at least 560 million euros. Antitrust and noncompliance penalties would reach between 1.46 and 14.63 billion euros to remedy the welfare damages of the alleged collusion. |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:tse:wpaper:125488&r= |