nep-law New Economics Papers
on Law and Economics
Issue of 2021‒10‒18
twelve papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Smoke and Fears: The Effects of Marijuana Prohibition on Crime By Scott Callahan; David M. Bruner; Chris Giguere
  2. The Effect of Job Loss and Unemployment Insurance on Crime in Brazil By Diogo Britto; Paolo Pinotti; Breno Sampaio
  3. Can more police induce more crime? By Casilda Lasso de la Vega; Oscar Volij; Federico Weinschelbaum
  4. On the Tragedy of Mass Shooting: the Crime Effects By Gunadi, Christian
  5. Stay at Home if You Can: COVID-19 Stay-at-Home Guidelines and Local Crime By Díaz, Carlos; Fossati, Sebastian; Trajtenberg, Nicolás
  6. Revamping Policy Governance in Austria: The EU’s impact 25 years on By Handler, Heinz
  7. Tax Evasion by Firms By Laszlo Goerke
  8. To File or Not To File? Another Dimension of Non-Compliance: The Eswatini Taxpayer Survey By Santoro, Fabrizio; Groening, Edward; Mdluli, Winnie; Shongwe, Mbongeni
  9. How Best to Nudge Taxpayers? A Tailored Letter Experiment in Eswatini By Santoro, Fabrizio; Groening, Edward; Mdluli, Winnie; Shongwe, Mbongeni
  10. The Collaborative Economy in Action: European Perspectives By Klimczuk, Andrzej; Česnuityte, Vida; Avram, Gabriela
  11. Can Institutional Transplants Work? A Reassessment of the Evidence from Nineteenth-Century Prussia By Jeremy Edwards
  12. The future of the Central Bank and its autonomy in the Chilean Constitutional Convention By Castro Azócar, Felipe

  1. By: Scott Callahan; David M. Bruner; Chris Giguere
    Abstract: U.S. drug policy presumes prohibition reduces crime. Recently states have enacted medical marijuana laws creating a natural experiment to test this hypothesis but is impeded by severe measurement error with available data. We develop a novel imputation procedure to reduce measurement error bias and estimate significantreductionsin violent and property crime rates, with heterogeneous effects across and within states and types of crime, contradicting drug prohibitionpolicy. Wedemonstrateuncorrected measurementerrororassuminghomogeneouspolicy effects leads to underestimation of crime reduction from ending marijuana prohibition. Key Words: Prohibition, Medical Marijuana Laws, Uniform Crime Report, Multiple Imputation
    JEL: K42 C81
    Date: 2021
  2. By: Diogo Britto (Diogo Britto); Paolo Pinotti (Paolo Pinotti); Breno Sampaio (Breno Sampaio)
    Abstract: We investigate the effect of job loss and unemployment benefits on crime, exploiting unique individual-level data on the universe of workers and criminal cases in Brazil over the 2009-2017 period. We find that the probability of criminal prosecution increases on average by 23% for workers displaced upon mass layoffs, and by slightly less for their cohabiting sons. Using causal forests, we show that the effect is driven entirely by young and low tenure workers, while there is no heterogeneity by education and income. Regression discontinuity estimates indicate that unemployment benefit eligibility completely offsets potential crime increases upon job loss, but this effect completely vanishes immediately after benefit expiration. Our findings point at liquidity constraints and psychological stress as main drivers of criminal behavior upon job loss, while substitution between time on the job and leisure does not seem to play an important role.
    Keywords: unemployment, crime, unemployment insurance, registry data
    JEL: K42 J63 J65
  3. By: Casilda Lasso de la Vega (University of the Basque Country); Oscar Volij (BGU); Federico Weinschelbaum (Universidad Torcuato Di Tella and CONICET)
    JEL: D72 D74 H23 K42
    Date: 2021
  4. By: Gunadi, Christian
    Abstract: Recent years have seen a rise in mass shooting incidents in the United States. While direct victims and their families undoubtedly suffer the most serious consequence of mass shootings, little is known on whether mass shootings have negative impacts beyond those immediately exposed to the incidents. In this paper, I examine the crime consequences of mass shootings. I hypothesize that mass shootings can increase crimes through its adverse effects on local labor market conditions. Utilizing difference-in-differences strategy that exploits geographic and temporal variation in mass shooting incidents across U.S. counties, the results of the analysis suggest that mass shooting incident is associated with a rise in crimes, especially those carried out for monetary gains. The most conservative estimate indicates that mass shooting incident increases the overall property crime rate by about 4%.
    Keywords: Mass Shootings,Violence,Crime,Economic Outlooks
    JEL: K42 H23 D84 J18
    Date: 2021
  5. By: Díaz, Carlos (Universidad Católica del Uruguay); Fossati, Sebastian (University of Alberta, Department of Economics); Trajtenberg, Nicolás (University of Manchester)
    Abstract: Government responses to the COVID-19 pandemic had an unprecedented impact on mobility patterns with implications for public safety and crime dynamics in countries across the planet. This paper explores the effect of stay-at-home guidelines on thefts and robberies at the neighborhood level in a Latin American city. We exploit neighborhood heterogeneity in the ability of working adults to comply with stay-at-home recommendations and use difference-in differences and event study designs to identify the causal effect of COVID-19 mobility restrictions on the monthly number of thefts and robberies reported to police across neighborhoods in Montevideo (Uruguay) in 2020. Our results show that neighborhoods with a higher share of residents with work-from-home jobs experienced a larger reduction in reported thefts in relation to neighborhoods with a lower share of residents with work-from-home jobs. In contrast, both groups of neighborhoods experienced a similar reduction in the number of reported robberies. These findings cast light on opportunity structures for crime but also on how crime during the pandemic is disproportionately affecting more vulnerable areas and households.
    Keywords: crime; rational choice; COVID-19; lockdown; crime opportunities
    JEL: H76 K42 R23
    Date: 2021–10–08
  6. By: Handler, Heinz
    Abstract: This contribution reviews some economic governance aspects of the EU’s 1995 enlargement. The focus is on selected fields of internal market pertinence in Austria compared with Finland and Sweden. The analysis starts with an overview of Austria’s initial position and reviews the instruments of EU economic governance at the time, including fiscal rules and instruments. The central part of the paper is devoted to the adjustments required to comply with the gradual completion and refinement of the internal market. Special attention is given to competition policy and public procurement. Overall, economic governance in Austria was significantly “modernized” in the course of approaching and implementing EU membership. Although this contributed to a sustained improvement in competitiveness, Austria was in many respects lagging behind the comparative performances of Finland and Sweden.
    Keywords: Economic and fiscal governance, internal market, competition policy, public procurement, network industries, competitiveness
    JEL: F15 H11 H60 K21 K23 L16
    Date: 2020–06–14
  7. By: Laszlo Goerke (Institute for Labour Law and Industrial Relations in the European Union (IAAEU), Trier University)
    Abstract: This contribution surveys theoretical analyses of tax evasion by firms. It uses a simple model in which the firm determines economic activity and the under-declaration of the tax base to integrate various approaches into a coherent analytical framework. Initially, the chapter characterises the basic features of the firm's decision. Subsequently, it considers the effects of firm-size heterogeneity, restrictions on evasion behaviour, the co-existence of tax evasion with other illegal activities, output market interactions, non-profit objectives, and corporate governance issues.
    Keywords: Firm, Tax Avoidance, Tax Evasion
    JEL: H25 H26 K34
    Date: 2021–04
  8. By: Santoro, Fabrizio; Groening, Edward; Mdluli, Winnie; Shongwe, Mbongeni
    Abstract: Non-filing refers to taxpayers who fail to submit a tax declaration, thus becoming ghosts in the eyes of tax authorities. It is a widespread phenomenon in sub-Saharan Africa, and has a number of detrimental fiscal effects. Non-filing has been largely unexplored in the literature, which focusses more on active filers. The overall aim of this paper is to shed light on the determinants of non-filing, building on neoclassical and behavioural theories, as well as to contribute to the methodological discussion on how to measure tax compliance. Focusing on Eswatini, the analysis combines survey data from a thousand entrepreneurs with their tax returns and filing history 2013-2018. We show that economic deterrence, compliance costs and moral factors, such as intrinsic motivation and peer pressure, are strongly correlated with actual filing. We also study how our key factors change when controlling for the persistence of filing behaviour in past years, or using a self-reported measure of compliance. We argue that tax knowledge plays a major role in understanding the decision to file. In terms of policy, results show that the tax authority could improve filing rates by adopting both a deterrent and an assistance-related approach, and also by triggering the role of social norms.
    Keywords: Economic Development, Finance,
    Date: 2020
  9. By: Santoro, Fabrizio; Groening, Edward; Mdluli, Winnie; Shongwe, Mbongeni
    Abstract: Tax collection in sub-Saharan Africa (SSA) performs poorly, with a tax/GDP ratio of about 15% –this has severe repercussions for service delivery, growth and state-building. The ratio in high-income countries is 35%. Resource-constrained tax authorities in SSA are transitioning towards a new tax era, and implementing innovative compliance strategies such as ‘tax nudges’ – communication campaigns aiming to influence the behaviour of taxpayers. Very little quantitative evidence has been produced as to why taxpayers in SSA comply with or evade taxes. While tax nudge literature has boomed in OECD countries and Latin America, only a handful of tax nudge studies have been produced in SSA. Understanding what motivates compliance is crucial, particularly for income taxes – for which the incentive to evade is higher. SSA countries need to improve collection of income taxes, which are preferable to indirect taxes in terms of fairness and equity. This is a summary of ICTD Working Paper 112.
    Keywords: Economic Development, Finance, Governance,
    Date: 2020
  10. By: Klimczuk, Andrzej; Česnuityte, Vida; Avram, Gabriela
    Abstract: The book titled The Collaborative Economy in Action: European Perspectives is one of the important outcomes of the COST Action CA16121, From Sharing to Caring: Examining the Socio-Technical Aspects of the Collaborative Economy (short name: Sharing and Caring; that was active between March 2017 and September 2021. The Action was funded by the European Cooperation in Science and Technology - COST ( The main objective of the COST Action Sharing and Caring is the development of a European network of researchers and practitioners interested in investigating the collaborative economy models, platforms, and their socio-technological implications. The network involves scholars, practitioners, communities, and policymakers. The COST Action Sharing and Caring helped to connect research initiatives across Europe and enabled scientists to develop their ideas by collaborating with peers. This collaboration opportunity represented a boost for the participants' research, careers, and innovation potential. The main aim of this book is to provide a comprehensive overview of the collaborative economy (CE) in European countries with a variety of its aspects for a deeper understanding of the phenomenon as a whole. For this reason, in July 2017, an open call for country reports was distributed among the members of the COST Action Sharing and Caring. Representatives of the member countries were invited to produce short country reports covering: definition(s) of the CE; types and models of the CE; key stakeholders involved; as well as legislation and technological tools relevant for the CE. Submitted reports varied in length and regarding the level of detail included, in accordance with how much information was available in each respective country at the time of writing. Editors of the book have compiled these early reports into a summary report, which was intended as a first step in mapping the state of the CE in Europe. The Member Countries Report on the Collaborative Economy, edited by Gaia Mosconi, Agnieszka Lukasiewicz, and Gabriela Avram (2018) that was published on the Sharing and Caring website, represented its first synergetic outcome and provided an overview of the CE phenomenon as interpreted and manifested in each of the countries part of the network. Additionally, Sergio Nassare-Aznar, Kosjenka Dumančić, and Giulia Priora compiled a Preliminary Legal Analysis of Country Reports on Cases of Collaborative Economy (2018). In 2018, after undertaking an analysis of the previous reports' strengths and weaknesses, the book editors issued a call for an updated version of these country reports. Prof. Ann Light advised the editorial team, proposing a new format for country reports and 4000 words limit. The template included: Introduction, Definition, Key Questions, Examples, Illustration, Context, Developments, Issues, Other Major Players, and Relevant Literature. The new template was approved by the Management Committee in October 2018. The task force that had supported the production of the first series of country reports (Dimitar Trajanov, Maria del Mar Alonso, Bálint Balázs, Kosjenka Dumančić, and Gabriela Avram) acted as mentors for the team of authors in each country. The final reports arrived at the end of 2018, bringing the total number of submissions to 30 (twenty-nine European countries plus Georgia). A call for book editors was issued, and a new editorial team was formed by volunteers from the participants of the COST Action: Andrzej Klimczuk, Vida Česnuityte, Cristina Miguel, Santa Mijalche, Gabriela Avram, Bori Simonovits, Bálint Balázs, Kostas Stefanidis, and Rafael Laurenti. The editorial team organized the double-blind reviews of reports and communicated to the authors the requirements for improving their texts. After reviews, the authors submitted updated versions of their country reports providing up-to-date interdisciplinary analysis on the state of the CE in 2019, when the reports were collected. During the final phase, the chapters were again reviewed by the lead editors together with all editorial team members. At the time, the intention was to update these reports again just before the end of the COST Action Sharing and Caring in 2021 and to produce a third edition. However, the COVID-19 pandemic changed these plans. Thus, this final volume was created by 82 scholars-editors and contributors-and consists of reports on 27 countries participating in the COST Action.
    Keywords: Collaborative Economy; Shared Consumption; Sharing Economy; Platform Capitalism; Legal Regulations; Fair Economy
    JEL: D83 K00 Z13 Z18
    Date: 2021
  11. By: Jeremy Edwards
    Abstract: The institutional reforms France imposed in the parts of Germany it occupied in the late eighteenth and early nineteenth centuries are claimed to provide an example of successful externally-imposed institutional reforms. The most detailed study is that of Lecce and Ogliari (2019), who argue that the effectiveness of transplanted French institutions in different parts of Prussia depended on the cultural proximity between France and the relevant part of Prussia. However, Lecce and Ogliari take no account of a widely-recognized feature of nineteenth-century Prussian economic development: the importance of regional effects. The French reforms were concentrated in the west of Prussia, which was more economically advanced than the east before the French invasion, and this pre-existing difference must be disentangled from the effect of the French reforms in order to identify the effect of the latter. Once this is done, the evidence shows neither any favourable effect of French rule nor an effect of cultural proximity on the impact of French rule.
    Keywords: institutional reform, regional effects, omitted variable bias
    JEL: N13 O43 O52
    Date: 2021
  12. By: Castro Azócar, Felipe
    Abstract: Regarding the discussion on a New Constitution in Chile, the debate on the autonomy of the Central Bank has polarized: Some consider it fundamental for macroeconomic balances, and others question it as an "authoritarian enclave". Should the Constitution settle this issue? It will be seen that it is not so much what it says on paper that matters, but how the autonomy and independence of the Central Bank are articulated in the reality.
    Keywords: Constitutional autonomy; Central Bank autonomy; price stability; Chilean new constitution; economic policy
    JEL: E3 E6 K0 K23
    Date: 2021–10–09

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