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on Law and Economics |
| By: | Ferraz, Eduardo (Universidad del Rosario); Soares, Rodrigo R. (Insper, São Paulo) |
| Abstract: | This paper develops a dynamic life-cycle equilibrium model of crime with hetero-geneous agents and human capital accumulation. Agents decide at each point in time whether to commit crimes by comparing potential gains from crime to the expected cost of punishment (determined from the probability of apprehension, the utility cost of incarceration, and reduced future wages in the legal labor market). Public security policies are defined as pairs of a size of the police force and an average length of sentences. We propose an original micro-founded police production function linking the level of police expenditures to the probability of apprehension. The structural model, estimated using 2000s US data and causal parameters from the empirical literature, allows us to evaluate the global optimality of policies in a way that would not be possible with reduced form estimates or traditional partial equilibrium, static models of crime. Equilibrium effects can be particularly relevant when studying crime, given the interactions across individuals' decisions and policies. We also extend the model to include investments in schooling and explore the potential complementarities across public security and educational policies. |
| Keywords: | crime, welfare, police, sentence length, socially optimal policy |
| JEL: | K42 I38 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15053&r= |
| By: | Chakraborty, Tanika (Indian Institute of Management); Mukherjee, Anirban (University of Calcutta); Saha, Sarani (Indian Institute of Technology Kanpur); Shukla, Divya (Indian Institute of Technology Kanpur) |
| Abstract: | We study the role of formal institutions of contract enforcement in facilitating investments in small and medium firms(MSME). In a framework where established entrepreneurs can enforce contracts informally using their network ties and hierarchical advantage, we argue that an efficient formal judiciary helps entrepreneurs without any ties to informal business networks, disproportionately more. We test our theoretical prediction using a novel administrative panel-data from Indian courts and the nationally representative MSME survey data. Empirically, we treat entrepreneurs from disadvantaged castes (SC-ST) as those without traditional business-network ties. We find that improvement in court quality has a disproportionately larger impact on the investment decisions of SC-ST entrepreneurs. On average, if the time taken for a court to clear all existing cases reduces by 1 year, the initial gap in the probability of investing, between SC-ST and other entrepreneurs, gets reduced by 0.6-0.7 percentage points. |
| Keywords: | judiciary, Duration Index, MSME, entrepreneurship |
| JEL: | K12 L26 O17 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp15037&r= |
| By: | Bhalotra, Sonia (University of Warwick); Fernandez, Manuel (Universidad de los Andes & IZA) |
| Abstract: | We investigate supply-side barriers to medical care in Colombia, where citizens have a constitutional right to health, but insurance companies impose restrictions. We use administrative data on judicial claims for health as a proxy for unmet demand. We validate this using the health services utilization register, showing that judicial claims map into large, pervasive decreases in medical consultations, procedures, hospitalizations and emergency care. This manifests in population health outcomes. We identify increases in mortality pervasive across cause, age and sex, with larger increases for cancer, individuals over the age of fifty, women and the poor. JEL Classification: G22 ; I11 ; I13 ; I18 ; K38 ; K42 |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:wrk:wqapec:11&r= |
| By: | Thierry Kirat (IRISSO - Institut de Recherche Interdisciplinaire en Sciences Sociales - Université Paris Dauphine-PSL - PSL - Université Paris sciences et lettres - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Frédéric Marty (CIRANO - Centre interuniversitaire de recherche en analyse des organisations - UQAM - Université du Québec à Montréal = University of Québec in Montréal, GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (... - 2019) - COMUE UCA - COMUE Université Côte d'Azur (2015-2019) - CNRS - Centre National de la Recherche Scientifique - UCA - Université Côte d'Azur, OFCE - Observatoire français des conjonctures économiques - Sciences Po - Sciences Po) |
| Abstract: | The article presents the late convergence process from American economists that led them to support a strong antitrust enforcement in the Second New Deal despite their long-standing distrust toward this legislation. It presents the path from which institutionalist economists, on the one side, and members of the First Chicago School, on the other one, have converged on supporting the President F.D. Roosevelt administration towards reinvigorating antitrust law enforcement as of 1938, putting aside their initial preferences for a regulated competition model or for a classical liberalism. The appointment of Thurman Arnold at the head of the Antitrust Division in 1938 gave the impetus to a vigorous antitrust enforcement. The 1945 Alcoa decision crafted by Judge Hand embodied the results of this convergence: in this perspective, the purpose of antitrust law enforcement does consist in preventing improper uses of economic power. |
| Keywords: | Economic Power,Institutional Economics,Antitrust,Efficiency,Chicago School,New Deal |
| Date: | 2021–06–16 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:halshs-03261721&r= |
| By: | Ciccarelli, Carlo (University of Rome Tor Vergata); Dalmazzo, Alberto (University of Siena); Razzolini, Tiziano (University of Siena) |
| Abstract: | This paper reconsiders the nexus between the abundance of resources and the origins of Sicilian mafia by exploiting a new set of historical data on the Sicilian sulphur industry in the late 19th century, obtained from official reports of the Royal Corps of Mining Engineers at the municipal level. We find that the impact of local production on mafia was smaller -or nil- in the areas richest in sulphur. We also find that mechanization in the extraction process was associated with lower incidence of mafia. Taken together, our findings suggest that larger lodes encouraged better and more orderly working conditions for the miners, possibly reducing physical and psychic strain and, consequently, inclination to violence. |
| Keywords: | Mafia, sulphur, working conditions |
| JEL: | H75 J28 K42 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp14959&r= |
| By: | Valentina Avramescu (Dimitrie Cantemir Christian University of Bucharest, Romania) |
| Abstract: | : In this paper, we have analyzed aspects related the tactical activity of hearing witnesses, more precisely, what their statement represents, its importance in the conduct of criminal proceedings and how listen to the various categories of witnesses. Also presented are the activities that take place in the preparation phase of the hearing of witnesses, the tactical conduct in the stage of identifying witnesses, as well as the free reporting of the witness. |
| Keywords: | witness, hearing, tactical conduct, judicial body, tactical methods |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:smo:lpaper:0078&r= |
| By: | Anatoliy Kostruba (Vasyl Stefanyk Precarpathian National University) |
| Abstract: | Ensuring the protection of rights of parties in corporate relations under the conditions of obligatory consolidation of corporate control requires the definition of a fair price of a small block of shares in a joint-stock company that is subject to compulsory disposal in favor of a beneficiary. There is no doubt that observance of the balance of interests of parties in corporate legal relations in this area is achieved by the conflict free mechanism of its pricing. According to Article 652 of the Law of Ukraine On Joint Stock Companies, the price of mandatory sale of shares is regulatory determined by the largest of the following: 1) the highest price of a share at which the claimer, his/her affiliated persons or third persons acting jointly with him/her, acquired shares of this company within 12 months preceding the date of acquisition; 2) the highest price at which the claimer, his/her affiliated persons or third persons acting jointly with him/her indirectly acquired the title to shares of this company within 12 months preceding the date of acquiring dominant control block of shares by such party, provided that the cost of the company`s shares being directly or indirectly owned by such legal entity, according to its latest annual financial statements, is at least 90 percent of the total value of assets of such legal entity; 3) market value of the company's shares, defined on the basis of an independent assessment as of the last business day preceding the day of acquiring a dominant block of shares of the company. At the same time, most scientists engaged in researching corporate relations are united in the position of imperfect legislative mechanism for determining the price of sale. Thus, O. Bihniak expresses certain doubts about the appropriateness of Article 8 of the Law of Ukraine On Joint Stock Companies, which establishes the procedure for approving the price of mandatory sale of shares by the Supervisory Board (or the Company`s executive body). According to the scientist, providing protection of the rights of minorities is envisaged particularly through state regulation of the stock market, which shall facilitate the transparency of securities market dynamics and conditions for optimal pricing. He is supported by other scholars. In particular, representatives of the Kharkiv law school Shvydka T.I. and Logvinenko S.S. draw conclusions about the need for legislative changes in the procedure for determining the fair price of redemption of shares. The emphasis is put on the need to ensure safeguard for the rights of minority shareholders within the framework of the squeeze-out procedure, particularly by expanding the powers of the National Securities and Stock Market Commission. Indeed, the mechanism for determining the price of mandatory sale of shares gives rise to many questions. Firstly, the organized capital market in Ukraine is in the process of its formation, which significantly reduces the coefficient of regulatory nature of part 2 Article 8 of the Law of Ukraine On Joint Stock Companies establishing the market value of emission securities in circulation on organized capital markets as an average course based on the results of regular trading. It is necessary to cite open statistical data. According to the annual report of the National Securities and Stock Market Commission for 2020, the volume of trading in the securities market amounted to 1000.99 billion UAH (31.4 billion Euros) in 2020. As a comparison, in 2020, the volume of trading in the Warsaw Stock Exchange (Poland) was 236 billion Euros, while the daily trading volume in the New York Stock Exchange was 60.2 billion US dollars. As of 1 of August 2021, among 1225 public joint-stock companies 166 share issues were included in exchange lists. On the other hand, the involvement of an estimator to determine the market value of emission securities by a corporation`s Supervisory Board created by a majority, approval by this body of the property market value corporate management creates a threat to the existence of a conflict of interest due to the potential impact on the results of such estimation. Incidentally, part 3 Article 8 of the Law of Ukraine On Joint Stock Companies provides that the approved value of property may differ within 10 percent of the value determined by the estimator. Within the limits of the powers provided by the National Commission, certified copies of reports on an independent assessment of market value of an ordinary share of joint-stock companies is regularly provided for revision to the State Property Fund of Ukraine as a body carrying out state regulation of estimation. According to public information from the Annual Report of the National Securities and Stock Market Commission for 2020, the State Property Fund of Ukraine provided a revision of 98 reports on the assessment of an ordinary registered share, according to which: - 46 reports are classified as generally meeting the requirements of statutory instruments on property valuation, but have minor shortcomings not affecting the validity of the assessment; - 15 reports - as having significant shortcomings affected the reliability of the assessment, but may be used for the purpose defined in the report after correction of these shortcomings; - 37 reports of 98 - are poor-quality and unprofessional and cannot be used. That is, in 38% of cases, the requirement of fair price of mandatory sale of shares was not fulfilled. Thus, the procedure for obligatory disposal of shares does not provide a clear and transparent procedure for determining the price and relevant preventive measures against the unfair behavior of beneficiaries having statutory capacity to influence the pricing of shares. The analysis of judicial practice confirms the stated issues in the field of administration of law. In the resolution of 24 of November 2020, the Grand Chamber of Supreme Court expressed the opinion regarding the fair price of redemption (Resolution of the Grand Chamber of Supreme Court of 24 of November 2020 in the case No. 908/137/18): "... one of the important elements of observing the criterion of proportionality when interfering with the right to peaceful possession of property is to provide fair and reasonable compensation (paragraph 7.25)". As of today, the appropriate procedure has not been provided. The position of the Grand Chamber of the Supreme Court regarding the outlined range of issues clearly indicates the need for systemic changes in the mechanism of obligatory consolidation of corporate control. It is obvious that its introduction into legal framework requires more effective compensatory levers to ensure the rights of a weaker party, which, in our opinion, are the cessation of ownership of shares as a result of alienation or acquisition of such right under the claim of a person concerned by virtue of a court decision. Under action proceedings, a court assesses the criterion of justice in determining the value of a company`s shares being disposed and verifies the grounds for creation of rights of action and their regulatory reasonableness. Fair price determines the fair value of a share considering the economic indicators of the company, which determine the prospect of its development. In this case, the company is subject to an assessment as an entity, but not as a set of assets or the binding demand for payment of dividends. It should be noted that the regulatory requirement for fixed price may not correspond to the fair balance criterion. On the model of Japan and Hong Kong, the price of acquirement shall have an exceptionally low threshold value of the relevant price. Currently, it is widely recognized that the market price cannot serve as a benchmark to achieve fair value, since it may be discounted relative to the cost of a liability. When deciding on fair compensation alternative methods of evaluation should be considered, such as discounting cash flows (technique used to calculate the current (present) cost of expected revenues and expenses, comparison of multiples and quotation of shares in the securities market, analog assessment method, etc. Incidentally, the positive experience of judicial control of the pricing procedures is enshrined in the law of Germany (Articles 327b, 327C of the Germany Law On Joint Stock Companies). In the UK, the form of judicial control over the procedure for compulsory acquisition of ownership of shares is the court discretion to independently determine the terms on which the offeror is entitled and obliged to purchase shares (Article 988 of the Law on Companies of 2006), including in the case of establishing their unfair value. Corporate legislation of Hong Kong provides compensatory mechanism against potential abuse by the holder of the dominant block of shares in a joint stock company, which includes the competence of a court, under the request of a minority shareholder, to decide on the absence of right of compulsory redemption of shares of minority shareholders, establishment of a fair price of acquisition, and has a discretion to independently exercise any powers if, at the request of the shareholder, it believes that the company's affairs are or was conducted in a manner unfairly harming the interests of shareholders. In this case, the court may adopt any order which, in its opinion, is necessary and issue an order to restrict the company`s business or an order to perform actions, an order to appoint a recipient or manager of the company's property or its part. Herewith, the court may even specify the powers and responsibilities of the recipient or manager and determine the remuneration. |
| Keywords: | corporation,sell-out,freeze-out,Kostruba,squeeze-out,corporate control,corporate governance,corporate law |
| Date: | 2021–10–22 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-03522327&r= |
| By: | Petronela Simona Brezeanu (George Bacovia University of Bacău, Romania) |
| Abstract: | Drug trafficking is a global phenomenon. For some, it is a lifestyle, while for law enforcement, it is a constant struggle. This article is another step towards awareness and a reflection of the reality that surrounds us daily. The author did not set out to criticize but set out to understand. Still, the magnitude of this phenomenon is constantly evolving, and understanding could be easier in tandem with the effects of awareness. Thus, the author will talk about some characteristics of drugs and methods of hiding and manufacturing drugs. |
| Keywords: | drugs, masking, concealment, manufacture, distribution |
| Date: | 2021–06 |
| URL: | http://d.repec.org/n?u=RePEc:smo:lpaper:0080&r= |
| By: | Alexander J. Cardazzi (West Virginia University); Brad R. Humphreys (West Virginia University); Bryan McCannon (West Virginia University); Zachary Rodriguez (West Virginia University) |
| Abstract: | Domestic violence generates long-term effects on offenders, victims, and other household members. Insight into triggers of family violence can inform policy and improve services aimed at reducing abusive behavior. We investigate potential domestic violence triggers by analyzing unexpected losses in National Basketball Association games. The literature identifies increasing in-home violence after unexpected losses in the National Football League. Combining information on referee accuracy and fatigue, we develop a unique identification strategy to explore the impact of human error on family violence following unexpected losses. Results indicate that as referees are more accurate (more rested) in unexpected losses, family violence decreases, suggesting that the ability to place blame for a loss on referees increases the likelihood of violent outbursts. Further investigation shows that these results concentrate in games where referees are less rested and betting markets were less certain of the game outcome. |
| Keywords: | Domestic violence, job performance, emotional cues |
| JEL: | J44 K42 Z22 |
| Date: | 2020–08–24 |
| URL: | http://d.repec.org/n?u=RePEc:wvu:wpaper:20-11&r= |
| By: | Doss, Cheryl R.; Mika, Helena |
| Abstract: | Most analyses of the gender gaps in landownership are based on one or a few countries in which little discussion is provided of the institutional context. Yet, the institutions within a given context will certainly influence both men’s and women’s landownership. In this paper, we analyze data from individual men and women respondents to the Demographic and Health Surveys in 45 low- and middle-income countries combined with 28 indicators at the national level of relevant institutions. To measure the associations with institutions, we use indicators of the structure of the economy, land market efficiency, women’s labor force participation, education of women and girls, gender equality, women’s property rights, social norms, marital property rights and inheritance, women’s political voice, and the extent of indigenous and communal property in the country. We do not find a clear association between higher GDP and structural transformation in the economy and a smaller gender land gap. This suggests that economic growth and development alone will not resolve the gender land gaps. The indicators that proxy for more gender equality in the labor force, educational attainment, and legal and social norms are all associated with a lower gender gap in landownership. |
| Keywords: | WORLD; gender; women; land rights; institutions; land ownership; men; developing countries; households; employment; property rights; land markets; women's land rights; gender land gap; land inequality; women’s landownership |
| Date: | 2021 |
| URL: | http://d.repec.org/n?u=RePEc:fpr:ifprid:2089&r= |
| By: | Armstrong, Christopher S. (University of Pennsylvania); Kepler, John D. (Stanford University); Kim, Chongho (New York University); Tsui, David (University of Southern California) |
| Abstract: | We study whether and how creditors exercise their control rights to shape their borrowers’ executive compensation plans. Highly levered borrowers often face incentives to underinvest due to agency conflicts driven by differences in time horizon and risk-taking preferences between managers and creditors. Thus, we expect that creditors exert their control to ensure that their borrowers’ executive compensation plans encourage investments with longer-term payoffs and provide more direct rewards for profitable outcomes. We also argue that executives’ bonus plans become relatively more important in these instances because their flexibility (e.g., potentially non-linear and non-monotonic payoffs) al lows creditors to target specific investment objectives. We find that borrowers’ bonus plans tend to have longer horizons and more convex payouts when their creditors acquire more control following covenant violations. Our evidence suggests that creditors exercise their influence to shape their borrowers’ executive compensation plans in ways that protect their interests. |
| JEL: | G34 J3 M12 |
| Date: | 2021–12 |
| URL: | http://d.repec.org/n?u=RePEc:ecl:stabus:4006&r= |
| By: | Javier Barbero (European Commission - JRC); Manol Bengyuzov (European Commission - DG GROW); Martin Christensen (European Commission - JRC); Andrea Conte (European Commission - JRC); Simone Salotti (European Commission - JRC); Aleksei Trofimov (European Commission - DG GROW) |
| Abstract: | Services account for about 70% of the GDP of the European Union (EU), and a similar share of employment. The 2006 Services Directive aims at promoting trade and investment in services by removing unjustified regulatory and administrative barriers. Nevertheless, the Single Market for services remains fragmented. The analysis reported here shows that the realised removal of barriers between 2006 and 2017 results in discounted cumulative gains of 2.1% of GDP by the year 2027. Additional ambitious reforms could generate an additional growth potential of up to 2.5% of GDP by 2027, resulting in a total cumulative gain in GDP of up to 4.65% by 2027. |
| Keywords: | rhomolo, general equilibrium, economic growth |
| JEL: | C68 R13 |
| Date: | 2022–01 |
| URL: | http://d.repec.org/n?u=RePEc:ipt:iptwpa:jrc127035&r= |