nep-law New Economics Papers
on Law and Economics
Issue of 2021‒08‒09
nine papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Plea Bargaining and Investigation Effort: Inquisitorial Criminal Procedure as a Three-Player Game By Christmann, Robin
  2. Wage Determination in the Shadow of the Law: The Case of Works Councilors in Germany By Laszlo Goerke; Markus Pannenberg
  3. A Study on Schrems II Judgement of the European Court of Justice on International Data Flows―With a Focus on Its Effects on the Data Free Flow with Trust Initiative (Japanese) By WATANABE Shota
  4. How Compatible Is the Statutory Child Vaccination Duty with Article 8 of the European Convention on Human Rights? By Titus Corlatean
  5. Border enforcement policies and reforms in South Africa (1994-2020) By Handmaker, J.D.; Nalule, C.
  6. “An Elephants’ Graveyard”: the Deregulation of American Industry in the Late Twentieth Century By Richard N. Langlois
  7. Sentiment and uncertainty about regulation By Tara M. Sinclair; Zhoudan Xie
  8. Disintermediation: the Rise of the Personal Computer and the Internet in the Late Twentieth Century By Richard N. Langlois
  9. Local governance quality and law compliance: The case of Mozambican firms By Hanna Berkel; Christian Estmann; John Rand

  1. By: Christmann, Robin
    Abstract: We study the impact of plea bargaining on decision errors and operating costs of the inquisitorial justice system. Scholars and legal professionals are divided over whether such plea deals are compatible with the inquisitorial tradition. In this paper, we stylize inquisitorial criminal procedure as a sequential game with two benevolent investigators, judge and prosecutor. Both agents are subject to private investigation costs and seek a correct decision over a defendant of uncertain guilt. Our analysis shows that the introduction of plea deals in courtroom helps to overcome the problem of effort coordination between the two investigating agents. All equilibria that involve a conviction also adhere to the ‘beyond reasonable doubt’-conviction threshold. Moreover, we demonstrate that plea bargaining reduces the frequency of wrongful convictions (type I errors) in inquisitorial procedures.
    Keywords: screening, free-riding, litigation, court errors
    JEL: D82 K14 K41
    Date: 2021–07–30
  2. By: Laszlo Goerke (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University); Markus Pannenberg (University of Applied Sciences Bielefeld)
    Abstract: The German law on co-determination at the plant level (Betriebsverfassungsgesetz) stipulates that works councilors are neither to be financially rewarded nor penalized for their activities. This regulation contrasts with publicized instances of excessive payments. The divergence has sparked a debate about the need to reform the law. This paper provides representative evidence on wage payments to works councilors for the period 2001 to 2015. We find wage premia of 2% to 6% in OLS-specifications, which are more pronounced for long-term works councilors. Moreover, we observe no wage premia in linear fixed-effects panel data specifications, suggesting that the OLS-results capture the effect of selection into works councillorship. We obtain no evidence for a delayed compensation or a special treatment of works councilors released from work. Hence, our results indicate that payments to works councilors are broadly in line with legal regulations.
    Keywords: Labor Law, Wages, Works Councils, Socio-Economic Panel (SOEP).
    JEL: J30 J51 J53 J83 K31
    Date: 2021–01
  3. By: WATANABE Shota
    Abstract: The judgement of Schrems II of the European Court of Justice (CJEU) dealt with compatibility of the Privacy Shield agreement (PS) and Standard Contractual Clauses (SCC) with EU legal system. As such, it may have a significant impact on Japanese policies on international data flows. In the Schrems I judgement, CJEU decided that US surveillance activities were incompatible with the European framework and declared the safe harbor agreement, the previous agreement governing the PS, invalid. US and EU governments set up PS to strengthen legal data protection against US surveillance. This most recent Schrems II judgement determined that the updated US system is still insufficient to meet the standards of the EU. This is the first case where CJEU analyzed the level of data protection of a foreign country and confirmed that standards of review under the Data Protection Directive, formed in the Schrems I judgement, are still applicable under the General Data Protection Regulation (GDPR), the successor of the Directive. This judgement revealed that Data Protection Authorities can order the suspension of international data transfers during their handling of complaints, even when an adequacy decision exists. It also determined that SCCs remain valid, however this is conditional upon additional safeguards based on the risks that exist in import countries, including surveillance risks. This article analyzed the similarity of the Schrems II judgement with the Data Free Flow with Trust (DFFT) initiative of the Japanese government, in addition to the accuracy of US criticism that the judgement is discriminatory against US surveillance when compared to EU members due to the fact that surveillance is excluded from protection under GDPR.
    Date: 2021–07
  4. By: Titus Corlatean (Christian University Dimitrie Cantemir, Bucharest, Romania)
    Abstract: On April 8, 2021, the Grand Chamber of the European Court of Human Rights (ECtHR) adopted a first judgment on compulsory childhood vaccination. This judgment, adopted by a clear majority (sixteen votes to one) in the case of VavÅ™iÄ ka and Others v. the Czech Republic, established that the general legal duty consecrated in Czech Republic to vaccinate children against a number of diseases well known to medical science does not violate article 8 (right to respect for private and family life) of the European Convention on Human Rights (ECHR), as requested by the applicants. In the above-mentioned case, the first applicant, according to the Czech legislation, was fined for the failure to respect the vaccination duty for his two children, the other applicants being all denied the admission of their children to preschool for the same reason. Following its constant case law in relation with article 8, the ECtHR examined the issues of the State interference in the right to respect for private life, the legitimate aims pursued by the Czech authorities in protecting health, the margin of appreciation of the State and the proportionality principle. The Court reached the conclusion that in striking the particular balance between the need to respect the right to private life and the legitimate aim to safeguard the health of young children and the community, respectively, the Czech authorities had not exceeded both the recognized margin of appreciation for a State when adopting measures regarded as “necessary in a democratic society†and the principle of proportionality.
    Keywords: childhood vaccination, compulsory, private life, human rights, European Court, Czech Republic, margin of appreciation, interference, proportionality
    Date: 2021–05
  5. By: Handmaker, J.D.; Nalule, C.
    Abstract: Prior to 1994, South Africa was infamous for its racialised policies and seemingly limitless measures of social control through a regime of apartheid, or racialised separation. Its unforgiving approach of previous, white-minority governments extended to mainly black foreigners, including refugees from the civil war in Mozambique from 1977–1992. After democratic elections in 1994, South Africa’s immediate post-apartheid migration regime was still largely oriented around an unreconstructed, apartheid-era approach of controlling the admission into, residence in, and departure from South Africa. This dire situation triggered a call for reform, to which policymakers were very slow to respond. Ultimately, in its efforts to develop and implement a border management and migration framework, the South African government has heavily relied on legal frameworks, border control policies, strategies and technologies transplanted from Europe and the United States. But, despite all this investment in a precedent-based yet foreign machinery, the government still struggles with its porous borders and irregular immigration. As a result, attempts to manage migration through policy reforms in South Africa have been fraught with challenges and contradictions. Particularly from around 2008, South Africa has not only embraced a spate of ever-more restrictive policies and laws that aim to sift out the desirable from the undesirable migrants, it has defied court judgements that have found the government to be in contravention of the law and the Constitution and obliged it to change. This has culminated in an explicitly deterrent and security-oriented approach that continues to lack effective judicial oversight. In this Working Paper, we present a comprehensive overview of South African migration and Border Control policies over a 25-year period. In a separate paper, which builds on this thick description, we argue that South Africa’s efforts to deter immigrants has not been framed by globally-accepted principles, based on South Africa’s ratification of international treaties governing refugees and migrants in particular, but rather has continued to be a policy of rather arbitrary enforcement is a sad reflection of deep-seated governance problems that the country faces generally.
    Keywords: migration, refugees, South Africa
    Date: 2021–07–28
  6. By: Richard N. Langlois (University of Connecticut)
    Abstract: This paper is an excerpt from a larger book project called The Corporation and the Twentieth Century, which chronicles and interprets the institutional and economic history – the life and times, if you will – of American business in the twentieth century. This excerpt examines the era of industrial deregulation of the late twentieth century. As had been the case with financial deregulation, it argues, industrial deregulation and the internationalization of trade were largely a manifestation of the misalignment of the postwar regulatory regime with the realities of economic growth. This misalignment created profit opportunities for entrepreneurs not only in the realm of technology but also, and perhaps more crucially, in the realm of institutions. In some cases, entrepreneurs would expend resources in order to foment political change. In other cases, technological and institutional innovation, aided at times by the depredations of the regulation itself, would so reduce the available rents of a regulatory regime that its supporting coalition would collapse
    Keywords: Deregulation; institutional innovation; technological change; antitrust
    JEL: D23 K21 L4 L51 L52 L6 L9 N42 N62 N72 N82 O3 P12 P P16
    Date: 2021–07
  7. By: Tara M. Sinclair; Zhoudan Xie
    Abstract: Regulatory policy can create economic and social benefits, but poorly designed or excessive regulation may generate substantial adverse effects on the economy. In this paper, we present measures of sentiment and uncertainty about regulation in the U.S. over time and examine their relationships with macroeconomic performance. We construct the measures using lexicon-based sentiment analysis of an original news corpus, which covers 493,418 news articles related to regulation from seven leading U.S. newspapers. As a result, we build monthly indexes of sentiment and uncertainty about regulation and categorical indexes for 14 regulatory policy areas from January 1985 to August 2020. Impulse response functions indicate that a negative shock to sentiment about regulation is associated with large, persistent drops in future output and employment, while increased regulatory uncertainty overall reduces output and employment temporarily. These results suggest that sentiment about regulation plays a more important economic role than uncertainty about regulation. Furthermore, economic outcomes are particularly sensitive to sentiment around transportation regulation and to uncertainty around labor regulation.
    Keywords: Regulation, text analysis, NLP, sentiment analysis, uncertainty
    Date: 2021–07
  8. By: Richard N. Langlois (University of Connecticut)
    Abstract: This paper is an excerpt from a larger book project called The Corporation and the Twentieth Century, which chronicles and interprets the institutional and economic history – the life and times, if you will – of American business in the twentieth century. This excerpt details the history of the personal computer industry and the Internet. It highlights the process of entrepreneurship and decentralized learning in these industries, and it considers the role of industrial and trade polices (in both the U. S. and Japan) in semiconductors and the development of the Internet. The excerpt ends with a consideration of U. S. v. Microsoft at the close of the century.
    Keywords: Innovation; technological change; entrepreneurship; industrial policy; antitrust
    JEL: D23 F14 K21 L26 L4 L52 L63 N62 N82 O3 P12 P P16
    Date: 2021–07
  9. By: Hanna Berkel; Christian Estmann; John Rand
    Abstract: Using panel data of manufacturing enterprises in Mozambique between 2012 and 2017, we investigate how changes in perceived quality of governance are related to firms' law compliance. Controlling for firm-level unobserved heterogeneity, we look at three aspects of governance and their components: transparency, security, and infrastructure. We examine which of these have the potential to alter firm compliance behaviour. We find that enterprises' perceptions of transparency are key to law abidance.
    Keywords: Governance, Transparency, Law, Firms, Firm behaviour
    Date: 2021

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