nep-law New Economics Papers
on Law and Economics
Issue of 2021‒06‒21
sixteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The prohibition of discrimination in labour relations – regulation in universal international legal acts By Стайков, Ивайло
  2. International labour standards and The Republic of Bulgaria – a century of experience By Стайков, Ивайло
  3. The Franchise, Policing, and Race: Evidence from Arrests Data and the Voting Rights Act By Facchini, Giovanni; Knight, Brian; Testa, Cecilia
  4. Crime and Mismeasured Punishment: Marginal Treatment Effect with Misclassification By Vitor Possebom
  5. Delays at the Border: Court Efficiency and Delays in Public Contracts By Decarolis, Francesco; Mattera, Gianpiero; Menon, Carlo
  6. Panic? Probing Angst over Immigration and Crime By Clotilde Mahé; Sergio Parra-Cely
  7. The Intellectual Property Protection System of the Foreign Investment Law: Basic Structure, Motivation and Game Logic By Luo Ying
  8. Elections, Institutions, and the Regulatory Politics of Platform Governance: The Case of the German NetzDG By Gorwa, Robert
  9. Unemployment and Crime Victimization: a Local Approach By Hémet, Camille
  10. Human Rights in Sub Saharan Africa: Understanding the Influence of Militarization, Governance and Democracy By Chimere O. Iheonu; Shedrach A. Agbutun; Chinedum J. Chiemela
  11. Economic, Ethical and Legal Aspectsof Digitalization in The Agri-Food Sector By Kosior, Katarzyna
  12. Judging Under Public Pressure By Alma Cohen; Zvika Neeman; Florian Auferoth
  13. Recent German migration laws: A contribution to fiscal sustainability By Manthei, Gerrit
  14. Lawyer Expertise and Contract Design â?? Evidence from M&A Negotiations By Karsten, Christel; Malmendier, Ulrike M.; Sautner, Zacharias
  15. The Productivity Performance of New Brunswick Manufacturing: A Detailed Analysis, 1997-2019 By Andrew Sharpe
  16. Justice as a Social Bargain and Optimization Problem By Andreas Siemoneit

  1. By: Стайков, Ивайло
    Abstract: In the present scientific article, a short review is made of the historic evolution of the legal regulation in the universal legal acts of the prohibition to and the protection of discrimination in the exercise of the right to work.
    Keywords: prohibition of discrimination, right to work, labour relations, international labour law
    JEL: J71 J80 J83 K31
    Date: 2021
  2. By: Стайков, Ивайло
    Abstract: The study analyzes the nature and importance of international standards for labour and social human rights, which have been created for a century by the International Labour Organization. Briefly presented the instruments that accepts this organization and their role in international legal regulation of labour. The report is dedicated to the 100th anniversary of the membership of Bulgaria in this universal specialized international organization.
    Keywords: International Labour Organization, international labour standards, international labour law, conventions, recommendations, declarations, labour and social human rights, Republic of Bulgaria
    JEL: J80 J83 K31 K33
    Date: 2021
  3. By: Facchini, Giovanni; Knight, Brian; Testa, Cecilia
    Abstract: This paper investigates the relationship between the franchise and law enforcement practices using evidence from the Voting Rights Act (VRA) of 1965. We find that, following the VRA, black arrest rates fell in counties that were both covered by the legislation and had a large number of newly enfranchised black voters. We uncover no corresponding patterns for white arrest rates. The reduction in black arrest rates is driven by less serious offenses, for which police might have more enforcement discretion. Importantly, our results are driven by arrests carried out by sheriffs - who are always elected. While there are no corresponding changes for municipal police chiefs in aggregate, we do find similar patterns in covered counties with elected rather than appointed chiefs. We also show that our findings cannot be rationalized by alternative explanations, such as differences in collective bargaining, changes in the underlying propensity to commit crimes, responses to changes in policing practices, and changes in the suppression of civil right protests. Taken together, these results document that voting rights, when combined with elected, rather than appointed, chief law enforcement officers, can lead to improved treatment of minority groups by police.
    Date: 2020–06
  4. By: Vitor Possebom
    Abstract: Using data from criminal cases in the State of Sao Paulo, Brazil, I analyze whether alternative sentences (e.g., fines or community services) decrease recidivism. To do so, I leverage the random assignment of judges within a court district as a source of exogenous variation in the probability of punishment to identify the effect of alternative sentences in comparison to the no-punishment counterfactual. Initially, I show that the usual identification strategy fails to identify the correct treatment effect parameter if it uses the trial judge's sentence, because the trial judge's decision may misclassify the final sentence due to the appeals process. To avoid this measurement error problem, I follow two approaches. First, I propose a novel partial identification strategy to identify the marginal treatment effect (MTE) with a misclassified treatment. This method explores restrictions on the relationship between the misclassified treatment and the correctly measured treatment, and allows for dependence between the instrument and the measurement error. Second, I collect data on Appeals Court's decisions and estimate the MTE based on the correctly measured final sentence. This last exercise is used as a benchmark for the set identification method that I propose. This draft is preliminary. While its theoretical part is complete, its empirical application is not ready yet.
    Date: 2021–05
  5. By: Decarolis, Francesco; Mattera, Gianpiero; Menon, Carlo
    Abstract: The inefficiency of the judicial system might affect the extent of delays in the execution of public contracts. We leverage on the large variation in the average length of civil proceedings across Italian jurisdictions and a granular dataset of public contracts to apply a border-discontinuity design strategy. Using a quantile regression approach, we uncover a non-linear, causal effect of court inefficiency: slower courts decrease delays at the lowest two deciles of the delay distribution, and increase delays in the top three deciles of the distribution. These findings fit a framework where contract enforcement is a key driver of contract performance.
    Keywords: Court efficiency; public procurement; Quantile regression; spatial discontinuity
    JEL: H11 H57 K41
    Date: 2020–06
  6. By: Clotilde Mahé (Department of Economics and Management, Université du Luxembourg); Sergio Parra-Cely (Universidad San Francisco de Quito, Ecuador)
    Abstract: We examine empirically whether immigration affects crime in an emerging country, Ecuador. We exploit the fact that immigration flows of Venezuelans suddenly evolved from voluntary to forced, and occurred disproportionately along land borders. We use nationally representative administrative and survey data to precisely estimate an economically null effect of Venezuelan immigration on property and violent crime. We also show that natives are more likely to believe that immigration worsens the economy, despite clear evidence of negative labour market impact due to recent Venezuelan inflows. Results confirm that fears over immigration and crime are not necessarily supported by facts.
    Keywords: Immigration, Crime, Ecuador, Venezuela, Latin America.
    JEL: F22 K42
    Date: 2021
  7. By: Luo Ying
    Abstract: The intellectual property protection system constructed by China's Foreign Investment Law has opened a new phase of rule of law protection of intellectual property rights for foreign-invested enterprises, which is an important institutional support indispensable for optimizing the business environment under the rule of law.The development of the regime was influenced by the major concerns of investors' home countries, the "innovation-driven development" strategy, and the trend towards a high level of stringent protection of international intellectual property and investment rules.In addition, there is a latent game of interests between multiple subjects, which can be analyzed by constructing two standard formal game models according to legal game theory.The first game model aims to compare and analyze the gains and losses of China and India's IPR protection system for foreign-invested enterprises to attract foreign investment.The second game model is designed to analyze the benefits of China and foreign investors under their respective possible behaviors before and after the inclusion of IPR protection provisions in the Foreign Investment Law, with the optimal solution being a "moderately cautious" strategy for foreign investors and a "strict enforcement" strategy for China.
    Date: 2021–06
  8. By: Gorwa, Robert
    Abstract: Policy proposals for higher rules and standards governing how major user- generated content platforms like Facebook, Twitter, and YouTube moderate socially problematic content have become increasingly prevalent since the negotiation of the German Network Enforcement Act (NetzDG) in 2017. Although a growing body of scholarship has emerged to assess the normative and legal dimensions of these regulatory developments in Germany and beyond, the legal scholarship on intermediary liability leaves key questions about why and how these policies are developed, shaped, and adopted unanswered. The goal of this article is thus to provide a deep case study into the NetzDG from a regulatory politics perspective, highlighting the importance of political and regulatory factors currently under-explored in the burgeoning interdisciplinary literatures on platform governance and platform regulation. The empirical account presented here, which draws on 30 interviews with stakeholders involved in the debate around the NetzDG’s adoption, as well as hundreds of pages of deliberative documents obtained via freedom of information access requests, outlines how the NetzDG took shape, and how it overcame various significant obstacles (ranging from resistance from other stakeholders and the European Union’s frameworks against regulatory fragmentation) to eventually become law. The article argues, throughout this case study, that both domestic politics and transnational institutional constraints are crucial policy factors that should receive more attention as an important part of platform regulation debates.
    Date: 2021–05–31
  9. By: Hémet, Camille
    Abstract: This paper explores the relationship between unemployment rate and crime victimization at the neighborhood level, using data from the French victimization survey. The very local nature of the data enables me to tackle the endogenous location selection issue: once I control for the characteristics of a larger area into which household select their location, the remaining variation of observables across neighborhoods within this larger area can be considered as exogenous. The contribution of this paper to the economics of crime literature is then twofold. First, I show that, at the very local neighborhood level, unemployment rate is an important factor explaining victimization. Second, I take advantage of the precise localization of the data to compare the effect of unemployment rate in the reference neighborhood and in adjacent neighborhoods. The results support the idea that criminals are mobile across neighborhoods for more serious economic crimes, but that petty crimes and vandalism do not involve any mobility.
    Keywords: crime victimization; neighborhood effects; unemployment
    JEL: J64 K42 R23
    Date: 2020–06
  10. By: Chimere O. Iheonu (Abuja, Nigeria); Shedrach A. Agbutun (University of Nigeria, Nsukka, Nigeria); Chinedum J. Chiemela (University of Nigeria, Nsukka, Nigeria)
    Abstract: This study provides empirical evidence on the impact of militarization, governance, and democracy on human rights in sub-Saharan Africa (SSA) for the period 2002 to 2018. The study employed the instrumental variable Fixed Effects model to account for simultaneity/reverse causality, and unobservable heterogeneity as well as the instrumental variable quantile regression with Fixed Effects to account for existing levels of human rights in SSA. Based on the Fixed Effects results, it is revealed that militarization significantly increases human rights violation in the region, while governance and democracy significantly improve human rights. Results from the quantile regression show that (1) the negative impact of militarization on human rights is observable across all quantiles, (2) the positive impact of the control of corruption on human rights is more pronounced in countries where the existing level of human rights is high, while political stability and rule of law exerts stronger impact on human rights in countries where the existing level of human rights is low, (3) the positive impact of democracy on human rights is stronger in countries where the existing level of human rights is high. Policy recommendations based on these findings are discussed.
    Keywords: Human Rights; Militarization; Governance; Democracy; Sub-Saharan Africa
    JEL: C21 C23 K38
    Date: 2021–01
  11. By: Kosior, Katarzyna
    Abstract: The article aims to contribute to the discussion and research on economic, ethical and legal aspects of digital transformation in the agri-food sector. The previous technological revolution (the so-called Green Revolution) significantly raised the efficiency indices and productivity in agriculture. At the same time, however, it led to many negative environmental consequences. It also deepened income inequalities in the sector. According to some researchers, the current digital revolution, in fact based on intensive use of knowledge, may reverse the adverse consequences of the previous revolution. On the other hand, there is growing evidence that digital technologies lead to new social divides and to greater inequalities in the world. Many digital products and services are developed with the use of data to which ownership rights remain unclear. At the same time, the ongoing digitalization processes seem to significantly increase the risk of privacy violations. The article discusses the benefits, problems and possible risks associated with the digitalization processes in the agri-food sector. Particular attention is devoted to the ethical aspects of collecting, processing, sharing and using digital data from smart farming systems. It is argued that the potential of the digital revolution in the agri-food sector is not fully realized. The influencing factors are i.a. the lack of laws and regulatory frameworks for the governance of digital data gathered in the agriculture and food sector, the structure of the market of digital products and services favoring large and very large farms, low level of trust between actors in the data value chain and insufficient cooperation between the private and the public sector with regard to using and sharing digital data. Therefore, a broad discussion engaging various stakeholders on the vision of digital transformation in the agri-food sector is necessary. The foundations for the development of the agri-food sector based on data exchange and digital innovation should take into account common values and ethical principles, as well as the need to build mutual trust between the actors in the data value chain.
    Date: 2020
  12. By: Alma Cohen; Zvika Neeman; Florian Auferoth
    Abstract: Individuals who engage in “judging” – that is, rendering a determination in a dispute or contest between two parties – might be influenced by public pressure to favor one of the parties. Many rules and arrangements seek to insulate such individuals from public pressure or to address the effects of such pressure. We study this subject empirically, investigating the circumstances in which public pressure is more and less likely to affect judging. Using detailed data from the Bundesliga, Germany’s top soccer league, our analysis of how crowd pressure affects the decisions of referees yields two key insights. First, we show that crowd pressure biases referee’s decisions in favor of the home team for those decisions that cannot be unam-biguously identified as erroneous but not for those decisions that can. In particular, a referee exhibits a bias in favor of the home team with respect to more subjective decisions such as the showing of yellow cards (cautions), which is based on the referee’s judgment, but not with respect to more objective de-cisions such as validating goals and awarding penalty kicks, where live TV coverage often allows for objective identification of errors. Second, we show that the effect of crowd pressure on referee decisions depends on the extent to which such pressure is viewed by the referee as understandable or reasonable (or even justified). Specifically, a referee’s bias in favor of the home team in yellow card issuance is strengthened after the referee makes an objectively identifiable error against the home team and thus might view crowd heckling as understandable. This effect is stronger when the referee’s error is costlier to the home team because the game is more important or the error is more consequential due to the closeness of the game at the time of the error. The introduction of VAR (Video Assistant Referee) technology in 2017 and the restrictions im-posed due to Covid-19 pandemic, which caused games to be played without crowds for the second half of the 2019–20 season, allow us to test our results under three different regimes (pre-VAR, VAR, and VAR/no-crowd). Inspection of the results under these three different regimes serves to reinforce them. As expected, VAR reduces the number of referee errors, but the pattern of no bias with respect to errors is preserved. VAR has no effect on the number of yellow cards, or on the number of goals. Once the crowd disappears, so does the home advantage in goals. Referee errors are unaffected, but the home bias with respect to yellow cards disappears as well. This confirms the effect that the crowd has on referees’ more subjective decisions.
    JEL: K40 Z20
    Date: 2021–06
  13. By: Manthei, Gerrit
    Abstract: The German government recently adopted a large number of changes in migration legislation related to asylum seekers and refugees who have immigrated since 2015. While some reforms may have more socio-political impacts, most also have fiscal implications. This work analyses the effects of individual legislative changes on the German fiscal system based on the established method of generational accounting. The results show that these laws likely will have overall positive effects on future German public finances. They also stress the importance of successful integration in general and the positive financial contributions from the immigration of relatively young, skilled workers.
    Keywords: immigration,law reform,fiscal sustainability
    JEL: E62 F22 H68 K37
    Date: 2020
  14. By: Karsten, Christel; Malmendier, Ulrike M.; Sautner, Zacharias
    Abstract: Using unique data on company acquisition contracts, we document significant variation in contracts depending on the expertise of the negotiating parties. Lawyers with higher expertise relative to their counterparties negotiate better risk allocation for their clients and more favorable target prices, after controlling for the deal environment, the quality of financial advisors, and other features of the contract design. The benefits of high expertise appear to outweigh its costs, largely because high-expertise lawyers economize on transaction costs by shortening negotiation times. Our findings help explain the importance of league tables and variation in legal fees in the M&A industry.
    JEL: D86 G34 K12
    Date: 2020–06
  15. By: Andrew Sharpe
    Abstract: This report provides a detailed analysis of the productivity performance of the manufacturing sector in New Brunswick. Part one of the report provides a detailed overview of the manufacturing productivity in New Brunswick from 1997 to 2019. This part identifies a major turning point in the province's manufacturing productivity performance in 2004, after which output per hour of manufacturing plummetted from 109 percent of the national average to 75 per cent of the national average. Part two of the report attempts to shed light on this important development from different angles, namely, a growth accounting perspective, an industry perspective, a labour perspective along with a fourth section which examines additional explanations.
    Keywords: Productivity, New Brunswick, Manufacturing, Canada, AIPR, Policy
    JEL: D63 I38 I31 J18 J24 J15 J6 K37
    Date: 2021–06
  16. By: Andreas Siemoneit
    Abstract: The question of "Justice" still divides social research and moral philosophy. Several Theories of Justice and conceptual approaches compete here, and distributive justice remains a major societal controversy. From an evolutionary point of view, fair and just exchange can be nothing but "equivalent", and this makes "strict" reciprocity (merit, equity) the foundational principle of justice, both theoretically and empirically. But besides being just, justice must be effective, efficient, and communicable. Moral reasoning is a communicative strategy for resolving conflict, enhancing status, and maintaining cooperation, thereby making justice rather a social bargain and an optimization problem. Social psychology (intuitions, rules of thumb, self-bindings) can inform us when and why the two auxiliary principles equality and need are more likely to succeed than merit would. Nevertheless, both equality and need are governed by reciprocal considerations, and self-bindings help to interpret altruism as "very generalized reciprocity". The Meritocratic Principle can be implemented, and its controversy avoided, by concentrating on "non-merit", i.e., institutionally draining the wellsprings of undeserved incomes (economic rents). Avoiding or taxing away economic rents is an effective implementation of justice in liberal democracies. This would enable market economies to bring economic achievement and income much more in line, thus becoming more just.
    Date: 2021–06

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