nep-law New Economics Papers
on Law and Economics
Issue of 2021‒09‒13
fifteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Broken windows policing and crime: Evidence from 80 Colombian cities By Santiago Tobón Zapata; Daniel Mejía; Ervyn Norza; Martín Vanegas-Arias
  2. Extending alcohol retailers opening hours: Evidence from Sweden By Daniel Avdic; Stephanie von Hinke
  3. The effect of design protection on price and price dispersion: Evidence from automotive spare parts By Herz, Benedikt; Mejer, Malwina
  4. The General Court Reverses Commission's Decision in H3G UK/Telefónica UK: Proposing a 'Fruits in a Bowl' to assess the competitive effects of mergers By Tyagi, Kalpana
  5. Tracing Director Liability Framework during Borderline Insolvency & Corporate Failure in India By Ram Mohan, M.P.; Shah, Urmil
  6. Do US firms have an incentive to comply with the FLSA and the NLRA? By Anna Stansbury
  7. The Right to Health and the Health Effects of Denials By Bhalotra, Sonia R.; Fernandez Sierra, Manuel
  8. Adapting Competition Law and Policy for Economic Development: Asian Illustrations By Majah-Leah Ravago; James Roumasset; Arsenio Balisacan
  9. Do gendered laws matter for women’s economic empowerment? By Marie Hyland; Simeon Djankov; Pinelopi Koujianou Goldberg
  10. Governance of Privacy Protection: How Laws Will Be Adopted to Address New Technologies? By Shi, Peilin; Winter, Jenifer Sunrise; Zhang, Bin
  11. The Legal Battle over Telecommunications Service Classification in the U.S.: From Network Neutrality to Voice-Over-Internet Protocol Service By Cherry, Barbara A.
  12. Global norms, regional practices: Taste-based and statistical discrimination in German asylum decision-making By Gundacker, Lidwina; Kosyakova, Yuliya; Schneider, Gerald
  13. Understanding discrimination effects in private rental housing By Maalsen, Sophia; Wolifson, Peta; Rogers, Dallas; Nelson, Jacqueline; Buckle, Caitlin
  14. Addressing the Impact of Border Enforcement Measures on the Self-Reported Health of Migrants Aiming to Enter Japan During the COVID-19 Epidemic. By Wels, Jacques
  15. Intended and Unintended Effects of E-cigarette Taxes on Youth Tobacco Use By Rahi Abouk; Charles J. Courtemanche; Dhaval M. Dave; Bo Feng; Abigail S. Friedman; Johanna Catherine Maclean; Michael F. Pesko; Joseph J. Sabia; Samuel Safford

  1. By: Santiago Tobón Zapata; Daniel Mejía; Ervyn Norza; Martín Vanegas-Arias
    JEL: K42 O17 E26 J48 C93
    Date: 2021–09–01
  2. By: Daniel Avdic (Monash University); Stephanie von Hinke (University of Bristol)
    Abstract: Excessive alcohol use is associated with a wide range of adverse outcomes that inflict large societal costs. This paper investigates the impacts of increases in regulated opening hours of Swedish alcohol retailers on alcohol purchases, health and crime outcomes by relating changes in these outcomes in municipalities that increased their retail opening hours to those in municipalities whose opening hours remained unchanged. We show that extended opening hours led to statistically and economically significant increases in alcohol purchases by around two percent per weekly opening hour, but find no corresponding increases in adverse outcomes related to the consumption of alcohol. We study potential mechanisms, such as consumption spillovers and on and off-premise substitution, and we discuss policy implications of our findings.
    Keywords: alcohol policy, alcohol availability, health effects , crime
    JEL: I12 I15
    Date: 2021–09
  3. By: Herz, Benedikt; Mejer, Malwina
    Abstract: The design right is a widely used but poorly understood intellectual property right that allows the protection of products’ aesthetics and outer appearances. We study the influence of design right protection on price by exploiting cross-country differences in the scope of protection in the European automotive spare parts market: In some countries, repair parts are exempted from design protection, while in others they are not. Based on detailed price data, our difference-in-differences estimates imply that design protection increases prices by about 5–8%, with large differences between carmakers. We then link our findings to the literature on deviations from the law of one price. We document large cross-country price deviations for identical spare parts and provide evidence that a part of these price deviations can be explained by the lack of harmonization of design right protection in combination with carmakers’ pricing-to-market strategies.
    Keywords: design right, design patent, repair clause, law of one price, price dispersion, European car market, automotive aftermarket, spare parts
    JEL: F15 K21 L11 L62 O34
    Date: 2020–06–01
  4. By: Tyagi, Kalpana
    Abstract: The General Court recently annulled the Commission's 2016 H3G UK/Telefónica UK prohibition decision. Commission's failure to meet the Court's newly-found higher threshold demonstrating that the merger would lead to 'significant impediment to effective competition' (SIEC), and that H3G UK was an 'important competitive force' were central to the decision. Considering that on the one hand, the Court's decision is welcome as it reflects that even telecom mergers - that are heavily grounded in economics and econometric simulations - are subject to legal review; then on the other, it also reflects a 'gap'- an evident need to appreciate that economics and econometric simulations, need clear and demonstrable definitions for application by Commission and the courts, as the case may be. This article, using an inter-disciplinary methodology with insights from competition law and economics & business strategy, tries to address this gap, and in the process respectfully highlights how the absence of such a 'vocabulary' and 'structure' led to a decision by the General Court that is good in spirit, but deplorably mistaken in reasoning. Potential remedies that could have alleviated competition concerns, while preserving merger specific efficiencies are also discussed.
    Keywords: H3G UK/Telefónica UK,significant impediment to effective competition,important competitive force,Efficiencies,Merger Remedies,4-to-3 Mobile telecom mergers
    Date: 2021
  5. By: Ram Mohan, M.P.; Shah, Urmil
    Abstract: The life of a company depends upon the fine balance between its management led by Board of Directors and shareholder, and non-shareholder constituencies acting as the risk bearers. The Board of Directors therefore are subjected to fiduciary duties towards both these constituencies at all financial phase of the company – solvency, insolvency and borderline insolvency. The director liability framework in India is currently split with obligations enshrined under the Companies Act, 2013 during solvency and Insolvency and Bankruptcy Code, 2016 during insolvency and borderline stage. The lack of judicial interpretation and scholarly discourse on the insolvent and borderline insolvent director liability framework has resulted in several practical challenges. To understand parallels, the paper comparatively analyzes the liability framework as existing under the corporate and insolvency laws of the United States and the United Kingdom with Indian insolvency law. The paper suggests that there is a need to align the Indian corporate and insolvency law through statutory measures to increase the remedial protections available to creditors during borderline insolvency. The paper also highlights mitigation measures which can be undertaken by the management to reduce the scope for director liability, until legislative or judicial clarity is provided on the framework.
    Date: 2021–08–31
  6. By: Anna Stansbury
    Abstract: To what extent do US firms have an incentive to comply with the Fair Labor Standards Act (FLSA) and the National Labor Relations Act (NLRA)? Stansbury examines this question through a simple comparison of the expected costs of noncompliance (in terms of legal sanctions) to the profits firms can earn through noncompliance. In the case of the FLSA minimum wage and overtime provisions, typical willful violators are required to pay back wages owed and in some cases additional penalties, if detected by the Department of Labor (DOL). Based on available data on the penalties levied, a typical firm would need to expect a chance of at least 78-88 percent that its violation would be detected in order to have an incentive to comply with the FLSA. In practice, the probability of detection many firms can expect to face is likely much lower than this. In the case of the NLRA, a firm that fires a worker illegally is required to reinstate the worker with back pay if the violation is detected. Based on empirical estimates of the effect of unionization on firm profits, a typical firm may have an incentive to fire a worker illegally for union activities if this illegal firing would reduce the likelihood of unionization at the firm by as little as 0.15-2 percent. These analyses illustrate that neither the FLSA nor the NLRA penalty and enforcement regimes create sufficient incentive to comply for many firms. In this context, the substantial evidence of minimum wage and overtime violations, and of illegal employer behavior toward unions, is not surprising.
    Keywords: US-China trade policy, tariffs, trade war timeline, phase one agreement, antidumping, countervailing duties, product exclusions, export controls
    JEL: F13
    Date: 2021–06
  7. By: Bhalotra, Sonia R. (University of Warwick); Fernandez Sierra, Manuel (Universidad de los Andes)
    Abstract: We estimate the health costs of supply-side barriers to accessing medical care. The setting is Colombia, where citizens have a constitutional right to health care, but insurance companies that manage delivery impose restrictions on access. We use administrative data on judicial claims for health as a proxy for unmet demand. We validate this using the register recording all health service utilization, estimating that a one standard deviation increase in judicial claims is associated with pervasive decreases in utilization rates of between 0.25 and 0.71 standard deviations, including in medical consultations, procedures, hospitalizations and emergency care. These restrictions on access manifest in population health outcomes. We estimate that a one standard deviation increase in judicial claims increases the all-cause mortality rate by between 0.10 and 0.23 standard deviations. Increases in mortality are pervasive across causes, with the largest increase in deaths from certain cancers. They are also pervasive across the age and sex distribution but larger among individuals over the age of fifty and (weakly) among women and the low-income population.
    Keywords: health care, health insurance, mortality, right-to-health, litigation, universal-health-coverage, Colombia
    JEL: I11 I13 I18 K4
    Date: 2021–08
  8. By: Majah-Leah Ravago (Economics, Ateneo de Manila, Philippines); James Roumasset (Economics, University of Hawai?i at M?noa); Arsenio Balisacan (Philippine Competition Commission, Quezon City, Philippines)
    Abstract: Do the needs of countries in different economic environments and at various stages of development warrant different policies? In the pursuit of economic development and consumer welfare, competition policy should curb rent-seeking and promote market efficiency without interfering with the extra-market institutions for the dynamic promotion of specialization, innovation, and investment coordination. This requires the coordination of competition policy with other economic roles of government including trade, industrial, and infrastructure policies. We investigate the impact of adoption of competition law on long-term economic growth using cross-country data from 1975-2015. Countries may choose to adopt–or not adopt–competition law depending on their circumstances, including level of economic development, institutions, and geography. Considering endogeneity and self-selection, we employ an endogenous switching regression allowing for the interdependence of economic growth and adoption of competition law. Our analysis shows that adoption increased the growth rates in adopting countries but would have decreased growth in non-adopting countries. This suggest that countries should not be pressured to prematurely adopt competition law but a limited international or regional agreement such as harmonization of policies may instead be pursued. In addition to correcting the abuses of anti-competitive behavior, competition policy should be designed to promote innovation and productivity growth and be well-coordinated with trade and domestic policies. We review these arguments focusing on Asian countries. The cases of Korea, Thailand, and the Philippines capture the characteristics of the law and authorities at various stages of maturity.
    Keywords: Competition policy; antitrust; economic development; economic growth; Asia
    JEL: L40 L51 L52 K21 O57 O53
    Date: 2021–06
  9. By: Marie Hyland (World Bank); Simeon Djankov (Peterson Institute for International Economics); Pinelopi Koujianou Goldberg (Peterson Institute for International Economics)
    Abstract: Greater legal equality between men and women is associated with a narrower gender gap in opportunities and outcomes, fewer female workers in positions of vulnerable employment, and greater political representation for women. While legal equality is on average associated with better outcomes for women, the experience of individual countries may differ significantly from this average trend, depending on the countries’ stage of development (as proxied by per capita GDP). Case studies from the Democratic Republic of the Congo, India, and Spain demonstrate this deviation. Especially in developing countries, legislative measures may not necessarily translate into actual empowerment, due mainly to deeply entrenched social norms, which render legal reforms ineffective. Women are more likely than men to be in vulnerable employment in low- and lower-middle-income economies but less likely than men to be in vulnerable employment in upper-middle- and high-income economies. Analysis of a 50-year panel of gendered laws in 190 countries reveals that country attributes that do not vary or change only slowly over time—such as a country’s legal origin, form of government, geographic characteristics, and dominant religion—explain a very large portion of the variation across countries. This finding suggests that the path to legal equality between men and women may be a long and arduous one. Nevertheless, the data also show that the past five decades have seen considerable progress toward legal gender equality. Gendered laws do evolve, suggesting a role for legal reforms in women’s economic empowerment.
    Keywords: Law, gender equality, discrimination, empowerment
    JEL: J16 K31 K38 N40
    Date: 2021–03
  10. By: Shi, Peilin; Winter, Jenifer Sunrise; Zhang, Bin
    Abstract: In accordance with UNCTAD data, out of 194 countries in the world, 132 countries have enacted laws to protect data and privacy. Among them, most of the laws were issued at the beginning of the 21st century. With the continuous development of digital technology, especially the widespread application of big data technology, existing legislation has been unable to deal with the privacy protection risks brought by new technologies. In recent years, Japan, South Korea, and other countries have begun to revise or expand the definition of personal information protection boundaries and content in laws and regulations to protect the personal information of their citizens in response to the development of new technologies. In early 2020, the COVID-19 epidemic suddenly broke out and quickly swept the world, posing unprecedented challenges to healthcare systems, lifestyles, economic development and social stability in countries around the world. Digital technologies and data applications have played an important role in COVID-19 detection and control, but their characteristics have also raised concerns about the security of personal data and privacy. How the law will be adjusted (or has been adjusted) to deal with new technology will be a challenge.This paper selects the countries (EU, the United States, Japan, South Korea, China) that have modified laws and regulations related to data security and privacy protection in recent years as research objects, analyzes their existing privacy protection laws and regulations governance framework, and then analyzes the privacy risks faced to the new technology. In particular, privacy regulations and compliance guidelines for the application of facial recognition, location tracking and distance learning technology during the COVID-19 epidemic. Then, the governance experience in dealing with the relationship between digital technology progress, personal information protection and public health in the special period was summarized. Finally, it summarizes the future development direction of privacy protection governance from the legal level.
    Keywords: Privacy Protection,New Technologies,Governance,COVID-19 epidemic
    Date: 2021
  11. By: Cherry, Barbara A.
    Abstract: In the U.S., network neutrality policy has been on a trajectory of escalating political instability since the early 2000's. As explained in Cherry (2020), this trajectory can be understood as a microcosm of the more general trajectory of political dysfunction under U.S. governance that coincides with the era of deregulatory policymaking. Under U.S. governance, adversarial legalism - that is, lawyer-dominated litigation - has evolved as a means of policymaking in the U.S., the role of which has intensified with the rise of divided government and party polarization. The federal Telecommunications Act of 1996 was enacted during the waning period of bipartisan negotiation of the 1990's, and its implementation has been left to a heightened period of adversarial legalism under hyperpartisanship between the Republican and Democratic political parties. As a result, the instability of U.S. network neutrality policy is reflective of the current phase of hyperpartisanship within a process of adversarial legalism. [...] This paper expands upon my prior research regarding U.S. deregulatory telecommunications policies (Cherry, 1999, 2003, 2006, 2010, 2015, 2020) to discuss the importance of the I-VOIP litigation, in both the U.S. and the international community. Under U.S. law, its importance arises from legal flaws in the 8th Circuit Court ruling in Charter Advanced Services v. MPUC and the resultant legal confusion as to the scope of federal preemption of state law. It is also the manifestation of yet another step in the trajectory of political instability and flawed legal analyses in U.S. telecommunications policy, distorting the economic and technical evolution of U.S. telecommunications markets. The consequences, however, will not be confined to the U.S. but will likely diffuse to international markets as well. Moreover, understanding these developments in the U.S. can serve as a case study for identifying how political instability in other nations may be distorting telecommunications regulation, markets and technology. International regimes, in turn, may require further evolution in recognition of nations' political instability on global telecommunications.
    Date: 2021
  12. By: Gundacker, Lidwina; Kosyakova, Yuliya; Schneider, Gerald
    Abstract: Asylum policy-making in advanced democracies frequently faces the accusation that prejudice and stereotyping lead to erroneous decisions. The model of taste-based discrimination suggests that the biases of decision-makers or their peers against certain groups of applicants influence the evaluation of an asylum claim. Conversely, the concept of statistical discrimination implies that a dearth of information forces impartial decision-makers to resort to stereotypes. We examine both forms of discrimination, evaluating whether they shape asylum-seekers' chances to receive protection in Germany, currently a key recipient country. Our empirical examination of a representative refugee survey in Germany confirms that asylum decisions are subject to tastebased discrimination: males, Muslims, and applicants assigned to regions with a conservative population or government are less likely to obtain asylum or other forms of protection. Conforming to the theory of statistical discrimination, stereotyping against male or Muslim applicants' manifests most pronouncedly if decision-makers suffer under high workload or possess little information. However, high information costs do not alter stereotyping in more conservative regions. Altogether, our study reveals that extra-legal reasons in the form of prejudice and stereotypes considerably undermine what should be the key criterion in assessing an asylum claim: the credibility of an individual's need for protection.
    Keywords: Asylum recognition,principal-agent models,federalism,immigration attitudes,Germany,discrimination
    JEL: F22 H83 J16 K37 K38
    Date: 2021
  13. By: Maalsen, Sophia; Wolifson, Peta; Rogers, Dallas; Nelson, Jacqueline; Buckle, Caitlin
    Abstract: This research examines discrimination and existing policy, law and practice in Australia’s private rental sector including the impact of informal tenancies and the increasing role of digital technologies.
    Date: 2021–09–01
  14. By: Wels, Jacques
    Abstract: Following the spread of COVID-19 in early 2020, Japan has implemented border enforcement measures to ban most foreigners, including tourists, workers and students from entering Japan for the time being, except for special humanitarian circumstances. For about a year, many migrants have been unable to enter Japan and had to postpone their plans. Using an online questionnaire (N=478), this study aimed to assess the impact of border enforcement measures on migrants’ health and wellbeing. Results indicate that border enforcement measures have generated insecurities, both from a financial and personal point of view. These have had strong negative effects on physical health and, to a greater extent, on sleep quality, level of stress and quality of life. The article demonstrates that insecurity is key for understanding Japanese border policies and, consequently, migrants’ health as it shapes a spectrum between the insiders and the outsiders that is determined by factors that take little account of individuals’ situation and that the state of exception reveals a gradient that is independent from the epidemic situation. It concludes with five points to be discussed further to protect migrants’ heath in case of travel ban: allow a fair treatment of migrants, developing international remote work possibilities, discussing the portability of the costs related to border enforcement measures, allow non-married couples to reunite and give a greater visibility to international migrants.
    Date: 2021–09–01
  15. By: Rahi Abouk; Charles J. Courtemanche; Dhaval M. Dave; Bo Feng; Abigail S. Friedman; Johanna Catherine Maclean; Michael F. Pesko; Joseph J. Sabia; Samuel Safford
    Abstract: Over the past decade, rising youth use of e-cigarettes and other electronic nicotine delivery systems (ENDS) has prompted aggressive regulation by state and local governments. Between 2010 and 2019, ten states and two large counties adopted ENDS taxes. Applying a continuous treatment difference-in-differences approach to data from two large national datasets (Monitoring the Future and the Youth Risk Behavior Surveillance System), this study explores the impact of ENDS taxes on youth tobacco use. We find that ENDS taxes reduce youth e-cigarette consumption, with estimated e-cigarette tax elasticities of -0.06 to -0.21. However, we estimate sizable positive cigarette cross-tax elasticities, suggesting economic substitution between cigarettes and e-cigarettes for youth. These substitution effects are particularly large for frequent cigarette smoking. We conclude that the unintended effects of ENDS taxation may more than fully offset any public health gains.
    JEL: H2 I1 I18
    Date: 2021–09

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