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on Law and Economics |
| By: | Rizos, Anastasios; Kapopoulos, Panayotis |
| Abstract: | The growth-enhancing property of a well-functioned judicial system is documented on the back of the safeguarding of property rights and legal investor protection, the well-functioning of financial markets, the support to entrepreneurship and the upholding of the firm growth. We investigate the effects of judicial efficiency on economic growth, using a new dataset over the period 2010-2018 drawn by the EU Justice Scoreboard study. More specifically, we estimate a static growth equation controlling for alternative judicial efficiency measures. Our findings corroborate that the inefficiencies in the operation of judicial systems pose obstacles to economic growth, and consequently, positive developments in judicial efficiency can be growth enhancing. Specifically, inefficiencies in the operation of judicial systems, measured alternatively as (a) lengthier court proceedings, (b) lower rates of clearance of accumulated unresolved cases, (c) increasing burden of pending cases and (d) a high inflow of new cases, all undermine economic growth. Our results justify the further adoption of judicial reforms in European Union members, that strengthen the enforcement of private contracts, incentivizing the domestic and external investment decisions and supporting the European economies to achieve and sustain robust growth rates. Finally, we find that civil origin legal systems, which are characterized by a higher degree of formalism in judicial procedures relative to common law origin systems, hinder economic growth. |
| Keywords: | judicial efficiency, economic growth, disposition time, clearance rate, caseload |
| JEL: | C23 C26 K40 O43 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107861&r= |
| By: | Hémet, Camille; Michel, Bastien |
| Abstract: | How do individuals convicted to incarceration fare in terms of later crime and labor market outcomes compared to those who receive a non-custodial sentence? We answer this question by taking advantage of a Danish reform whereby most offenders tried for a drunk-driving crime were placed on probation rather than sentenced to incarceration. Our first key finding is that stakeholders anticipated the consequences of the reform as significant selection is observed in the nature of the cases tried before and after the reform. To measure its impact, we resort to a novel instrumental variable approach exploiting quasi-exogenous variation in the probability of being tried after the reform and therefore incarcerated, based on the crime date. We find that incarcerated offenders commit more crimes and have weaker ties to the labor market than those placed on probation. The effects are particularly strong among young offenders. Our findings suggest that economic precariousness is an important mechanism explaining subsequent criminal behavior. |
| Keywords: | crime; employment; incarceration; Recidivism |
| JEL: | J24 K14 K42 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15047&r= |
| By: | Montebruno, Piero; Silva, Olmo; Szumilo, Nikodem |
| Abstract: | We study the impact of borrower protection on mortgage and housing demand. We focus on variation in the likelihood that a house is repossessed – conditional on the mortgage being in arrears and taken to court – coming from heterogeneity in the severity of judges that adjudicate on repossession cases in England and Wales. We develop a simple theoretical framework that shows that too much borrower protection restricts supply, while not enough restricts demand. Market outcomes depend on which side dominates. To test the predictions of our model, we exploit exogenous spatial variation in repossession risk created by the boundaries of courts’ catchment areas. In our setting, housing market characteristics, borrower attributes and mortgage rates do not change discontinuously across these boundaries – allowing us to isolate the causal effects of severity. We find that the impact of severity is negative on both mortgage sizes and house prices. This pattern suggests that judges in our sample are too strict and that demand determines market outcomes. Furthermore, we find that our measure of borrower protection does not react to market conditions – causing frictions in credit and housing markets. |
| Keywords: | house repossessions; mortgages; house prices; housing demand; mortgage default |
| JEL: | G21 R21 |
| Date: | 2021–05–01 |
| URL: | http://d.repec.org/n?u=RePEc:ehl:lserod:110474&r= |
| By: | Hjalmarsson, Randi; Lindquist, Matthew |
| Abstract: | This paper studies the effect on mortality of two Swedish early release reforms in 1993 and 1999 that held prison sentences constant but increased the share of time inmates were required to serve from one-half to two-thirds. Contrary to previous correlational evidence, we find that reform exposure, and the corresponding increase in time served, did not harm post-release prisoner health. Rather, the overall risk of death decreases, with especially large and significant effects for those who are positively selected in terms of their criminal careers and connection to society. We also find (i) significant and persistent reductions in the chance of suicide, (ii) short-term reductions in violent death, and (iii) long-term improvement in general health (circulatory death). These cause-specific effects are driven by particular at-risk populations â?? individuals with pre-incarceration mental health problems, violent offenders, and older offenders, respectively. We argue that these findings are primarily driven by a direct in-prison health treatment and services mechanism: we demonstrate that health care utilization and program participation increases with time served. We also find that reform exposure decreases recidivism and has some very short-term beneficial labor market effects. Our main findings, however, do not appear to be driven by these life-style changes. |
| Keywords: | crime; health; Mortality; Prison; Recidivism |
| JEL: | I14 K42 |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15214&r= |
| By: | Economou, Emmanouel/Marios/Lazaros |
| Abstract: | This paper sheds some light to the position of women in Classical Greece regarding their economic and legal rights including property rights and standing in marriage. In essence, the paper cautions against sweeping generalizations about the view of women in Ancient Greece as lower-class citizens and offers a more nuanced view of women. |
| Keywords: | Women’s economic and legal rights, Classical Athens |
| JEL: | K40 N0 N20 N23 Z10 Z13 |
| Date: | 2020–03–12 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107951&r= |
| By: | Galbiati, Roberto; Henry, Emeric; Jacquemet, Nicolas; Lobeck, Max |
| Abstract: | Laws not only affect behavior due to changes in material payoffs, but they may also change the perception individuals have of societal norms, either by shifting them directly or by providing information on these norms. Using detailed daily survey data and exploiting the introduction of lockdown measures in the UK in the context of the COVID-19 health crisis, we provide causal evidence that the law drastically changed the perception of the norms regarding social distancing behaviors. We show this effect of laws on perceived norms is mostly driven by an informational channel. |
| Date: | 2020–08 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15119&r= |
| By: | Shoji, Masahiro; Tsubota, Kenmei |
| Abstract: | Human trafficking is a serious humanitarian problem. Using a nationally representative survey of Bangladeshi child sex workers and an instrumental variable model, we examine the working conditions of trafficked child sex workers and how they differ from those of nontrafficked child sex workers. Existing studies investigating trafficking victimization only used a sample of rescued/escaped victims, and this study is the first to analyze those who are still being exploited. We find that the victims trade sex with 190 percent more clients at a 67.8 percent lower wage and are more exposed to violence, leading to sickness, such as fever and headache. However, the differences in the prevalence of STDs and injury are insignificant presumably because the owners have an incentive to protect the victims from STDs. These findings suggest that evaluating sex workers’ working conditions by the prevalence of STDs alone may underestimate the severity of the exploitation of victims. Furthermore, conducting an empirical analysis without distinguishing between trafficked and nontrafficked workers, as performed in previous studies, leads to misunderstandings regarding the sex industry. We also contribute to the literature concerning the worst form of child labor by providing the first rigorous evidence of the working conditions of child sex workers. Finally, four implications for practitioners are discussed. |
| Keywords: | human trafficking; worst form of child labor; organized crime; sexual crime; child abuse; sexually transmitted diseases; post-disaster crime |
| JEL: | I15 J22 J31 J47 K42 O15 |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107834&r= |
| By: | Fumagalli, Chiara; Motta, Massimo; Tarantino, Emanuele |
| Abstract: | We analyse the optimal policy of an antitrust authority towards the acquisitions of potential competitors in a model with financial constraints and asymmetric information. With respect to traditional mergers, these acquisitions trigger a new trade-off. On the one hand, the acquirer may decide to shelve the project of the potential entrant. On the other hand, the acquisition may allow for the development of a project that would otherwise never reach the market. We first show that a merger policy does not need to be lenient towards acquisitions of potential competitors to take advantage of their pro-competitive effects on project development. This purpose is achieved by a strict merger policy that pushes the incumbent towards the acquisition of potential competitors lacking the financial resources to develop their project independently. An equivalent rule would consist in blocking takeovers whose acquisition price is above a certain threshold. However, we also show that, if the anticipation of a takeover relaxes the target firm's financial constraints, a more lenient merger policy, which allows for the acquisition of firms that have already committed to enter the market, may be optimal. We identify the cumulative conditions necessary for this to be the case. They include the presence of pronounced financial imperfections. Hence, the more developed financial markets, the more likely that a stringent merger policy will be optimal. |
| Keywords: | Conglomerate mergers; Digital Markets; Merger Policy; Potential competition |
| JEL: | K21 L13 L41 |
| Date: | 2020–07 |
| URL: | http://d.repec.org/n?u=RePEc:cpr:ceprdp:15113&r= |
| By: | Jonung, Lars (Department of Economics, Lund University) |
| Abstract: | This paper examines the Swedish record of competition in the supply of bank notes in the 19th century. Between 1831 and 1902, private commercial banks, organized as partnerships with unlimited liability for their owners, issued notes competing with the notes of the Riksbank, the bank owned by the Riksdag, the Swedish parliament. The private banks turned out to be competitive in this market despite several legal obstacles, most notably that private notes were never legal tender – only Riksbank notes were. The private note-issuing banks developed techniques to increase the distribution of their notes. No case of an overissue of notes or of runs by the public on private note banks occurred. No private bank failed to redeem its notes into Riksbank notes. Opinion in the Riksdag remained hostile to private bank notes, reflected in the gradual restriction of the denominations of the notes issued by private banks and in rising taxes on private notes. Eventually, the Riksdag gave its bank, the Riksbank, a monopoly of note issue in Sweden. The evidence from the Swedish experience of free banking suggests that the design of the legal system was the prime explanation for the successful performance of private notes. |
| Keywords: | Free banking; central banking; private bank notes; unlimited liability; currency competition; Riksbank; Sweden |
| JEL: | E42 E51 E58 G21 K20 N13 N23 |
| Date: | 2021–05–11 |
| URL: | http://d.repec.org/n?u=RePEc:hhs:lunewp:2021_006&r= |
| By: | Andreas (Centre for Competition Policy and School of Law, University of East Anglia) |
| Abstract: | This paper fills an important gap in the antitrust compliance literature by exploring the perspective of the price fixer in breaches of competition law. It provides a critical analysis of statements made by price fixers, their competition lawyers and in-house counsel involved in cartel cases. The study draws on a combination of publicly available statements and anonymised accounts collected over 15 years of engaging with each of these three groups. It concludes that those responsible for cartels are motivated by varying factors and do not necessarily understand or accept that cartel behaviour is wrongful. Also, disciplining those individuals is complicated by the incentives created through leniency and settlement programmes. These findings highlight the importance of continued investment in compliance and the broader need for education in competition law to make it less likely that infringements will occur in the first place. |
| Keywords: | Competition Law, Antitrust, Compliance, Cartels. |
| Date: | 2021–05–18 |
| URL: | http://d.repec.org/n?u=RePEc:uea:ueaccp:2021_06&r= |
| By: | Roxana Manea; Patrizio Piraino; Martina Viarengo |
| Abstract: | We study the relationship between housing inequality and crime in South Africa. We create a novel panel dataset combining information on crimes at the police station level with census data. We find that housing inequality explains a significant share of the variation in both property and violent crimes, net of spillover effects, time and district fixed effects. An increase of onestandard deviation in housing inequality explains between 9 and 13 percent of crime increases. Additionally, we suggest that a prominent post-apartheid housing program for low-income South Africans helped to reduce inequality and violent crimes. Together, these findings suggest the important role that equality in housing conditions can play in the reduction of crime in an emerging economy context. |
| Keywords: | Inequality; Crime; Economic Development. |
| Date: | 2021–05–12 |
| URL: | http://d.repec.org/n?u=RePEc:gii:ciesrp:cies_rp_66&r= |
| By: | Ganguly, Madhuparna |
| Abstract: | We analyze the relationship between innovation attributes and competition intensity in a framework of endogenous knowledge spillover due to scientist mobility, and identify the effects of stronger patents on innovation at different levels of product market competition. We �nd non-monotone relations of patenting propensity, innovation incentives and investment in R&D, and monotone relation of scientist mobility, with potential product market competition intensity. The study further shows that stronger patent laws reduce (increase) innovation profitability (R&D expenditure) when the market for the new product is moderately competitive, and have no effect otherwise. The results suggest important implications for patent policy reforms. |
| Keywords: | Competition intensity; Innovation; Patent strength; Scientist mobility |
| JEL: | D43 J60 L11 L13 O34 |
| Date: | 2021–05–19 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:107831&r= |
| By: | Zeinab Rouhollahi |
| Abstract: | Recently, financial institutes have been dealing with an increase in financial crimes. In this context, financial services firms started to improve their vigilance and use new technologies and approaches to identify and predict financial fraud and crime possibilities. This task is challenging as institutions need to upgrade their data and analytics capabilities to enable new technologies such as Artificial Intelligence (AI) to predict and detect financial crimes. In this paper, we put a step towards AI-enabled financial crime detection in general and money laundering detection in particular to address this challenge. We study and analyse the recent works done in financial crime detection and present a novel model to detect money laundering cases with minimum human intervention needs. |
| Date: | 2021–05 |
| URL: | http://d.repec.org/n?u=RePEc:arx:papers:2105.10866&r= |