nep-law New Economics Papers
on Law and Economics
Issue of 2022‒03‒07
fourteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The Comparative Constitutional Compliance Database By Gutmann, Jerg; Metelska-Szaniawska, Katarzyna; Voigt, Stefan
  2. The efficiency of occupational licensing during the Gilded and Progressive eras: Evidence from judicial reviews By Mark T. Kanazawa
  3. Frequent audits and honest audits By Jacopo Bizzotto; Alessandro De Chiara
  4. The Early Origins of Judicial Stringency in Bail Decisions: Evidence from Early-Childhood Exposure to Hindu-Muslim Riots in India By Nitin Kumar Bharti; Sutanuka Roy
  5. What's Another Day? The Effects of Wait Time for Substance Abuse Treatment on Health-Care Utilization, Employment and Crime By Williams, Jenny; Bretteville-Jensen, Anne Line
  6. Exposure to Discretionary Arrests Increases Support for Anti-Police Protests By Chen, Ted Hsuan Yun; McLachlan, Paul; Fariss, Christopher J
  7. Shelving or Developing? The Acquisition of Potential Competitors under Financial Constraints By Chiara Fumagalli; Massimo Motta; Emanuele Tarantino
  8. Decades of Solar-driven geomagnetic disturbances impact homicide rates in Europe and the USA By Behrens, Alfredo; Beltrão, Kaizô; d'Almeida, Agostinho Leite
  9. Parental Religiosity and Missing School-Girls in Turkey By Melike Kökkizil
  10. How Peace Saves Lives? Evidence from Colombia By Perilla, Sergio; Prem, Mounu; Purroy, Miguel E.; Vargas, Juan F.
  11. The limits of joint-institutional frameworks for sectoral governance in EU-Swiss bilateral relations: Lessons for future relations with the UK By Eckert, Sandra
  12. Does the Change in Smoking and Marijuana Use Policies Influence Adolescents’ Risky Sexual Behaviors and Other Associated Factors? By Juboori, Ruaa Al; Davy, Orlando; Shato, Thembekile; Subramaniam, 5. Divya S; Fu, Qiang
  13. The Un General Assembly Rejected And Condemned Holocaust Denial And Recalled The International Legal Basis Of Its Rejection By Tulun, Teoman Ertuğrul
  14. Institutional discrimination against female managers as a barrier to firm internationalization and international trade By Hoch, Felix; Rudsinske, Jonas

  1. By: Gutmann, Jerg; Metelska-Szaniawska, Katarzyna; Voigt, Stefan
    Abstract: This article introduces a novel database that measures governments' compliance with national constitutions. It combines information on de jure constitutional rules with data on their de facto implementation. The individual compliance indicators can be grouped into four categories that we aggregate into an overall indicator of constitutional compliance: property rights and the rule of law, political rights, civil rights, and basic human rights. The database covers 168 countries over the period 1900 to 2020 and can be used by researchers interested in studying the determinants or the effects of (non)compliance with constitutions. Our investigation of the stylized facts of constitutional compliance does not reveal a long-term trend toward more compliance. Parliamentary democracies are the regimes with the highest level of constitutional compliance, whereas military dictatorships perform the worst. Although compliance is not determined by a constitution's breadth, constitutional design does still matter. Constitutions that allow for the dismissal of the head of state or government for violating the constitution achieve higher compliance levels.
    Keywords: constitutional compliance,constitutional economics,constitutional political economy,de jure-de facto gap,executive constraints,governance indicators,measurement of institutions
    JEL: H11 K10 K38 K42 O57 P48
    Date: 2022
  2. By: Mark T. Kanazawa (Carleton College)
    Date: 2022–02
  3. By: Jacopo Bizzotto (Oslo Business School, Oslo Metropolitan University); Alessandro De Chiara (Universitat de Barcelona, BEAT)
    Abstract: A regulator hires an auditor to inspect a firm. Audits serve two purposes: to detect violations and to motivate the firm to invest in compliance. Auditor and firm can collude to hide violations. Honest audits require sufficient monetary incentives for the auditor, and more frequent audits call for larger incentives. We link the optimal audit frequency to the budget constraint faced by the regulator, and to the firm's bargaining power in the collusive agreement. We show that (i) the optimal audit frequency need not be monotonic in the regulator's budget size, (ii) tolerating collusion can foster ex-ante investment, and (iii) a regulator that enjoys more flexibility in designing the auditor's compensation scheme might be less willing to deter corruption.
    Keywords: Auditing, corruption, information design, regulation.
    JEL: D73 K42 L51
    Date: 2022
  4. By: Nitin Kumar Bharti (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Sutanuka Roy
    Abstract: We estimate the causal effects of judges' exposure to communal violence during early childhood on pretrial detention rates by exploiting novel administrative data on judgments and detailed resumes of judicial officers born during 1955-1991. Our baseline result is that judges exposed to communal violence between ages 0 and 6 years are 16% more prone to deny bail than the average judge, with the impact being stronger for the experience of riots between ages 3 and 6 years. The observed judicial stringency is driven by childhood exposure to riots with a higher duration of state-imposed lockdowns and low riot casualties.
    Keywords: Early-childhood,Pretrial Detention,Judicial Bias,Communal Violence Early-childhood,Communal Violence
    Date: 2022–01
  5. By: Williams, Jenny (University of Melbourne); Bretteville-Jensen, Anne Line (Norwegian Institute for Alcohol and Drug Research (SIRUS))
    Abstract: This research provides the first evidence on the impacts of waiting times for treatment for a substance use disorder (SUD). Using rich linked administrative information from Norway, we study the impact of waiting time on health-care utilization, employment and crime for patients who enter outpatient treatment for cannabis use disorder. Confounding due to unobserved severity of illness is addressed using an instrumental variables strategy that exploits plausibly exogenous variation in congestion in Norway's health-care system. We find that waiting to access treatment increases the use of health-care services at both the extensive and intensive margins, measured by the duration of a treatment episode and the number of consultations within a treatment episode, respectively. Waiting time also has spill-over effects, reducing employment after entering treatment and increasing crime both before and after treatment begins. Together, these findings suggest that waiting times to access treatment for a SUD imposes significant costs on patients, health-care systems, and on society more broadly.
    Keywords: waiting times, cannabis, substance use treatment, employment, crime
    JEL: I12 J22 K42
    Date: 2022–02
  6. By: Chen, Ted Hsuan Yun; McLachlan, Paul; Fariss, Christopher J (University of Michigan)
    Abstract: The legitimacy of the state rests on individuals' perceptions of fairness when interacting with state institutions and state agents. The police as an institution and as individual agents have wide latitude to detain and use force against individuals. We argue that encounters with state bureaucracy and civil servants, specifically the police, can generate individual-level grievances against the state, and that these grievances make it more likely an individual participates in protest against the state. We study support for and the legitimacy of policing in the context of the anti-police protests in Baltimore, MD following the death of Freddie Gray in April, 2015. Using data from police records and social media, we show that individuals with higher exposure to discretionary arrests --- arrests that are potentially viewed as illegitimate or arbitrary --- are more likely to support protests against the police. In contrast, we demonstrate that exposure to arrests for major crimes such as murder does not follow the same pattern. Thus, support for the police as an institution varies systematically with exposure to arbitrary and capricious encounters with police agents. As these grievance generating encounters become more widespread, we expect to see increased protests against the police and further erosion in support of the police as an institution. Alternatively, shifting institutional resources to focus on major crimes and limiting the discretionary authority of police agents when interacting with the public may help to repair the legitimacy of policing institutions over the long term.
    Date: 2021–10–10
  7. By: Chiara Fumagalli (Università Bocconi, CSEF and CEPR); Massimo Motta (ICREA-Universitat Pompeu Fabra and Barcelona Graduate School of Economics); Emanuele Tarantino (Luiss University, EIEF and CEPR)
    Abstract: A start-up and an incumbent negotiate over an acquisition price under asymmetric information about the start-up's ability to succeed in the market. The acquisition may result in the shelving of the start-up's project or the development of a project that would otherwise never reach the market because of financial constraints. Despite this possible pro-competitive effect, the optimal merger policy commits to standards of review that prohibit high-price takeovers, even if they may be welfare-beneficial ex post. Ex ante this pushes the incumbent to acquire startups lacking the financial resources to develop independently, and increases expected welfare.
    Keywords: Optimal merger policy, selection effect, nascent competitors.
    JEL: L41 L13 K21
    Date: 2022–02–09
  8. By: Behrens, Alfredo; Beltrão, Kaizô; d'Almeida, Agostinho Leite
    Abstract: Background: Homicides are the leading cause of death among young males. Conventional approaches to interpreting variations in criminality over time and across countries have failed to explain it. Methods: We applied ordinary least squared regressions on yearly homicide rates to identify the planetary drivers for homicides in Germany, the UK, and the USA over the past three solar cycles (22 to 24) between 1987 and 2018. We used the number of sunspots (solar activity), Kp and Ap indices (geomagnetic activity) from the National Oceanic and Atmospheric Administration (NOAA) and the German Research Centre for Geosciences DFZ-Potsdam, and weather variables from the countries’ meteorological organizations. Results: Our study revealed that lagged Kp NOAA index as a parameter of solar-driven geomagnetic disturbances (GMD) was the most important predictor to explain homicide rates in all three countries. Our results showed that over half the variance in homicide rates of all three countries could be attributed to GMD, not so by weather variables. We also predicted homicide rates peaking for 2025 and 2026 during the current 25th solar cycle, suggesting the current solar cycle could prove to be one of the most intense in a century, which would signal a concomitant increase in homicide rates. Based on the Italian experience in curbing homicides, we also suggest that collective agency may break what appears to be a deadly association between GMD and homicides. Conclusions: Our study suggests GMD may be involved in shaping human behavior and may help public and medical authorities prepare for eventual surges in homicides as the 25th solar cycle may induce stronger GMD.
    Date: 2021–12–27
  9. By: Melike Kökkizil (Free University of Bozen-Bolzano, Italy)
    Abstract: Does parents' religiosity affect their female offspring's education and other life-long outcomes? I address this question by focusing on Turkey and exploiting Ramadan as a quasi-natural experiment for increased active religiosity. I find that the occurrence of Ramadan at the enrollment time in primary schools reduces girls' chance to access primary education. This result arises from the salience of traditional gender norms that religiosity engenders. I further show that parental religiosity at the primary school enrollment has persistent effects on females' labor market outcomes. They become less likely to participate in the labor market, less likely to be income-earners, and less likely to work in professional jobs. Instead, increased religiosity at the critical age of schooling increases fertility and the probability of women being out of the labor force due to household responsibilities. These results are robust to di erent specifications and an alternative empirical strategy that uses average daylight hours during Ramadan in the year of primary school enrollment as a shock to religiosity.
    Keywords: Islam, Gender Equality, Ramadan, Social Norms, Illegal Behavior.
    JEL: Z12 J16 I24 I25 J12 J13 D91 J12 J13 K38 K42
    Date: 2022–02
  10. By: Perilla, Sergio; Prem, Mounu; Purroy, Miguel E.; Vargas, Juan F.
    Abstract: The victimization of civilians and combatants during internal conflicts causes large and persistent socioeconomic costs. Moreover, it is not clear whether peace negotiations can significantly reduce this burden, as some sources of harm persist well after conflicts end. This is the case of antipersonnel landmines, which are hidden underground and remain active for decades. Looking at the recent experience of Colombia, and using a difference-in-differences empirical strategy, we study the conditions under which peace agreements reduce landmine blasts and victimization. Our findings point to the importance of post-conflict information sharing and comprehensive humanitarian mine clearance campaigns.
    Date: 2021–12–05
  11. By: Eckert, Sandra
    Abstract: Joint Institutional Frameworks in bilateral relations are circumscribed in policy scope, can lack adequate instruments for dynamic adaptation and provide limited access to decision-making processes internal to the contracting parties. Informal governance, the involvement of private actors as well as rules such as equivalence provide avenues to remedy these limits in bilateral relations in sectoral governance. Through bilateral agreements, the scope of territoriallybound political authority is expanded. The formalised and institutionalised frameworks and bodies established are, however, frequently accompanied by mechanisms of informal cooperation and special rules either to cover policy fields where no contractual relation exists, to provide for flexible solutions where needed, or to involve both public and private actors that otherwise do not have access to formal decision-making bodies. This SAFE working paper conceptualises formal and informal modes of cooperation and varying actor constellations. It discusses their relevance for the case of bilateral relations between the European Union (EU) andSwitzerland in sectoral governance. More specifically, it draws lessons from EU-Swiss sectoral governance of financial and electricity markets for the future relations of the EU with the United Kingdom (UK). The findings suggest that there are distinct governance arrangements across sectors, while the patterns of sectoral governance are expected to look very much alike in the United Kingdom and Switzerland in the years to come. The general takeaway is that Brexit will have repercussions for the EU's external relations with other third countries, putting ever more emphasis on formal and rule-based approaches, while leaving a need for sector-specific cross border co-operation.
    Date: 2022
  12. By: Juboori, Ruaa Al; Davy, Orlando; Shato, Thembekile; Subramaniam, 5. Divya S; Fu, Qiang
    Abstract: Introduction: Despite evidence from numerous studies that document the association between risky sexual behaviors (RSBs) and behaviors driving them, few had investigated the trends of the association over time, which was the objective of this study. Methods: A total of 61,072 students from four Youth Risk Behavior Surveillance System (YRBS) survey years (1993, 2001, 2009, and 2017) were included. The relationship between five risky behaviors (suicide risk, smoking, binge drinking, marijuana use, and physical fight) and two indicators of RSBs (condom non-use and multiple sexual partners) was investigated. Interactions between survey years and risky behaviors were included in the models to test the strength of associations over time. Results: Compared to previous years, most associations between risky behaviors and RSBs were converging. However, there were no consistent decreasing changes in associations across time in marijuana, smoking, and RSBs relationships. Conclusion: Findings raise concerns about the potential impact of interventions directed toward adolescent’s substance use. However, longitudinal studies are needed to clarify directionality and make more specific practice and policy recommendations for adolescents’ smoking and marijuana use as proxies to reduce the growing burden of STIs among this population. Policy Implications: Despite the public push against adolescent’s substance use, our findings may suggest that the policies around tobacco and marijuana use have not been as effective on the adolescent population as intended.
    Date: 2021–09–28
  13. By: Tulun, Teoman Ertuğrul
    Abstract: United Nations General Assembly (UNGA), on January 20, 2022, adopted a resolution regarding the Holocaust denial and rejected and condemned "without any reservation any denial of the Holocaust as a historical event, either in full or in part." It reaffirms the exercise of the right to freedom of expression. The resolution reaffirms that the Holocaust resulted in the murder of nearly 6 million Jews, 1.5 million of whom were children, comprising one-third of the Jewish people, and draws attention to the international legal basis of the Nuremberg Tribunal judgments regarding the Nazi perpetrators of the Holocaust as follows: "Reiterating the principles of international law recognized by the Charter of the Nürnberg Tribunal, and taking note with appreciation of their codification by the International Law Commission in 1950." In this regard, the term "genocide," in the international law context, is a legal term that found its place in the legal terminology through the Genocide Convention. Thus, the Genocide Convention, which is the only and fundamental legally binding treaty in the context of international law on the establishment of the existence and punishment of genocide is, in any event, can not be applied retrospectively. It is mentioned in the reports that the resolution was adopted at the 80th anniversary of the Wannsee Conference, when Nazi leaders met at a villa on the shores of Berlin's Wannsee lake to discuss the systematic murder of up to 11 million Jews in Europe. According to a press release of the German Permanent Mission to the U.N., with this resolution, "for the first time in a U.N. resolution, a definition of what constitutes Holocaust denial could be included." In our various AVİM analyzes, we have drawn attention to developments such as the rise of the extreme right in German society and the rise of Islamophobia, which can also be described as anti-Muslim racism. In this context, it should be noted that there are justifiable reasons for German Generation Z to make anology between past developments and the urgent problems facing German society today, such as racism and discrimination, as stated above. In this context, we gave detailed information in our analysis about the neo-Nazi Nationalist Socialist Underground (NSU) terrorist organization that murdered ten people between 2000 and 2007, eight of whom were members of the Turkish community living in Germany. It is an apparent development that apart from the rise in Holocaust denial, racism, xenophobia, and Islamophobia are on the rise in Germany and most Western European countries.
    Date: 2022–02–02
  14. By: Hoch, Felix; Rudsinske, Jonas
    Abstract: We show that firm internationalization is affected by the interaction between the board of directors' female share and gender-related institutions in foreign countries. The combination of a high share of female directors and gender-discriminating institutions in a destination reduces sales in that foreign country relative to less discriminatory destinations. We deal with potential endogeneity due to omitted variable bias by including firm-year and origin-destination-year fixed effects, while an event study exploiting the appointments of new female board members addresses endogeneity due to reverse causality. This firm-level relationship transfers to the country-level when using countries' aggregate share of female directors and bilateral exports in a structural gravity framework including origin-year, destination-year and origin-destination fixed effects. Our findings suggest that institutionalized discrimination against female managers is a barrier to firm internationalization on the micro level and international trade on the macro level. This might give rise to disadvantages for female managers even in non-discriminatory countries.
    JEL: F14 F23 J16 M16
    Date: 2022

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