nep-law New Economics Papers
on Law and Economics
Issue of 2022‒11‒07
sixteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. The effect of monitoring and crowds on crime and law enforcement: A natural experiment from European football By Brad R. Humphreys; Alexander Marsella; Levi Perez
  2. Heat, Crime, and Punishment By Behrer,Arnold Patrick; Bolotnyy,Valentin
  3. The Role of Justice in Development : The Data Revolution By Ramos Maqueda,Manuel; Chen,Daniel Li
  4. Do Judges Favor Their Own Ethnicity and Gender ? Evidence from Kenya By Chen,Daniel Li; Graham,Jimmy; Ramos Maqueda,Manuel; Singh,Shashank - DIME3
  5. Gendered Laws, Informal Origins, and Subsequent Performance By Hyland,Marie Caitriona,Islam,Asif Mohammed
  6. Corruption in Customs By Chalendard,Cyril Romain; Fernandes,Ana Margarida; Raballand,Gael J. R. F.; Rijkers,Bob
  7. The Kids Aren't Alright: Parental Job Loss and Children's Outcomes within and beyond Schools By Britto, Diogo; Melo, Caíque; Sampaio, Breno
  8. Do Illicit Financial Flows Hurt Tax Revenues ? Evidence from the Developing World By Combes,Jean-Louis,Minea,Alexandru,Sawadogo,Pegdewende Nestor
  9. Philippine Regulations for Cross-Border Digital Platforms: Impact and Reform Considerations By Serzo, Aiken Larisa O.
  10. Spillover Effects of Immigration Policies on Children's Human Capital By Esther Arenas-Arroyo; Bernhard Schmidpeter
  11. Becoming Legible to the State : The Role of Detection and Enforcement Capacity in Tax Compliance By Okunogbe,Oyebola Motunrayo
  12. Spillover Effects of Immigration Policies on Children's Human Capital By Arenas-Arroyo, Esther; Schmidpeter, Bernhard
  13. Trade Impacts of Intellectual-Property-Related PTAs : Evidence from Using the World Bank Deep Trade Agreements Database By Maskus,Keith E.; Ridley,William Clifton
  14. Accidents will happen: (de)regulation of health and safety legislation, workplace accidents and self employment By Donna Brown; Jonathan Wadsworth
  15. So close and yet so far: the ability of mandatory disclosure rules to crack down on offshore tax evasion By Elisa Casi; Mohammed Mardan; Rohit Reddy Muddasani
  16. An Evaluation of Crisis-Intervention Team (CIT) Training By Nemschoff, Danielle

  1. By: Brad R. Humphreys (West Virginia University, Department of Economics); Alexander Marsella (West Virginia University, Department of Economics); Levi Perez (University of Oviedo)
    Abstract: Technological advancements like the presence of smart phones and body cameras have led to increased monitoring of police, but little evidence exists on their impact. We address these problems using data on fouls from football matches in five European football leagues over six seasons. This period contains exogenous changes in monitoring rule enforcers through introduction of Video Assistant Referee review and limited "bystanders" from Covid-19 restrictions. Results from difference-in-differences models estimated separately for each league indicate that both events influenced the number of fouls called with substantial heterogeneity across leagues and home/away teams.
    Keywords: crime, police monitoring, football fouls
    JEL: H41 K42 Z20
    Date: 2022–10
  2. By: Behrer,Arnold Patrick; Bolotnyy,Valentin
    Abstract: Using administrative criminal records from Texas, this paper shows how heat affects criminaldefendants, police officers, prosecutors, and judges. It finds that arrests increase by up to 15 percent on hot days,driven by increases in violent crime. There is no evidence that charging-day heat impacts prosecutorial decisions.However, working alone, judges dismiss fewer cases, issue longer prison sentences, and levy higher fines when rulingon hot days. Higher incomes, newer housing, more teamwork, and less accessible weapons may decrease these adverseeffects of heat. Even with adaptation, the paper forecasts that climate change will increase crime and have substantialdistributional consequences.
    Keywords: Crime and Society,Adaptation to Climate Change,Climate Change and Health,Science of Climate Change,Climate Change and Environment,Urban Housing,Urban Governance and Management,Municipal Management and Reform,Urban Housing and Land Settlements
    Date: 2022–01–24
  3. By: Ramos Maqueda,Manuel; Chen,Daniel Li
    Abstract: This paper summarizes the empirical evidence on the role of justice in economic development, conflict, and trust in institutions. It finds that justice institutions play a significant role in economic development, particularly through their impact on credit markets and firm growth, the protection of vulnerable populations, their capacity to deter violence, and their influence over people’s trust in formal institutions. The paper then considers the promise of administrative data, machine learning, and randomized controlled trials to enhance the efficiency, access, and quality of justice. The paper concludes by discussing new avenues for research and the potential for data to improve the functioning of justice systems in the age of COVID-19.
    Keywords: Judicial System Reform,Law and Justice Institutions,Justice for the Poor,Crime and Society,Social Policy,Regulatory Regimes,Legal Reform,Legal Products,Legislation,Common Property Resource Development
    Date: 2021–06–29
  4. By: Chen,Daniel Li; Graham,Jimmy; Ramos Maqueda,Manuel; Singh,Shashank - DIME3
    Abstract: Evidence from high-income countries suggests that judges often exhibit in-group bias, favoringlitigants that share an identity with the judge. However, there is little evidence on this phenomenon from the GlobalSouth. Collecting the available universe of High Court decisions in Kenya, this paper leverages the randomassignment of cases to judges to evaluate the existence of in-group bias along gender and ethnic lines. It finds that,relative to a baseline win rate of 43 percent, defendants are 4 percentage points more likely to win if they share thejudge's gender and 5 percentage points more likely to win if they share the judge's ethnicity. The paperfinds that the written judgements are on average shorter and less likely to be cited when defendants who are of the samegender or ethnicity as the judge win their case. This is consistent with in-group biased decisions being of lowerquality. In addition, the findings show that female defendants are less likely to win the case if the judgeexhibits stereotypical or negative attitudes towards women in their writings.
    Keywords: Gender and Development,Labor Markets,Inequality,Human Rights,Judicial System Reform
    Date: 2022–03–07
  5. By: Hyland,Marie Caitriona,Islam,Asif Mohammed
    Abstract: This research explores the relationship between laws that discriminate on the basis of gender and the probability that a female-owned business begins operating in the informal sector. This is achieved by tracing the origins of formal businesses surveyed in the World Bank Enterprise Surveys and merging this with information on the level of legal equality between genders as measured by the Women, Business and the Law database. In addition, the research explores whether starting a business informally has any differential effect on subsequent firm performance depending on the gender of the owner(s). The results show that gender discriminatory laws increase the likelihood that firms with female owners will begin operations in the informal sector; as expected, this does not hold for enterprises that are solely owned by men. Furthermore, the research provides evidence that firms that began operations informally have poorer performance years later—a relationship that exists both for firms with female owners and for firms fully owned by men. The results show notable variation by region.
    Keywords: Labor Markets,Gender and Development,Anthropology,Gender and Social Development,Judicial System Reform,Employment and Unemployment
    Date: 2021–08–31
  6. By: Chalendard,Cyril Romain; Fernandes,Ana Margarida; Raballand,Gael J. R. F.; Rijkers,Bob
    Abstract: This paper presents a new methodology to detect corruption in customs and applies it toMadagascar’s main port. Manipulation of assignment of import declarations to inspectors is identified by measuringdeviations from random assignment prescribed by official rules. Deviant declarations are more at risk of tax evasion,yet less likely to be deemed fraudulent by inspectors, who also clear them faster. An intervention in which inspectorassignment was delegated to a third party validates the approach, but also triggered a novel manifestation of manipulation that rejuvenated systemic corruption. Taxrevenue losses associated with the corruption scheme are approximately 3 percent of total taxes collected and highlyconcentrated among a select few inspectors and brokers.
    Keywords: International Trade and Trade Rules,Tax Law,Trade and Services,Labor Markets,Youth and Governance,Judicial System Reform,Public Sector Economics,Government Policies,Legal Products,Legal Reform,Legislation,Public Finance Decentralization and Poverty Reduction,Regulatory Regimes,Social Policy,National Governance
    Date: 2021–10–12
  7. By: Britto, Diogo (Bocconi University); Melo, Caíque (Bocconi University); Sampaio, Breno (Universidade Federal de Pernambuco)
    Abstract: We study the effects of parental job loss on children and how access to unemployment benefits can mitigate these impacts. We leverage unique nationwide data from Brazil linking multiple administrative datasets, and take a comprehensive approach studying impacts on education as well as other key dimensions of children's lives. First, leveraging mass layoffs for identification, we show that parental job loss increases school dropouts and age-grade distortion by up to 1.5 percentage points. These effects are pervasive, last for at least six years and significantly reduce high-school completion rates. Second, we document that other important dimensions of children's lives are affected. Following the layoff, children are more likely to work informally, commit crime, and experience early pregnancy. In turn, parents reduce educational investments by moving children from private to lower-quality public schools. Using a clean regression discontinuity design, we show that access to unemployment benefits effectively mitigates some of the intergenerational impacts of job loss, notably on teenage school dropouts and crime, and on parental investments in school quality. Our findings indicate that the income losses following parental displacement are an important mechanism of the effects on children, highlighting the importance of policies that provide income support for displaced workers.
    Keywords: parental job loss, children's outcomes, unemployment insurance, Brazil
    JEL: K42 J63 J65
    Date: 2022–09
  8. By: Combes,Jean-Louis,Minea,Alexandru,Sawadogo,Pegdewende Nestor
    Abstract: Recent work draws attention to the fragility of domestic tax revenues—a vital resource for the developing world—to illicit financial flows. To cope with two major challenges in the illicit financial flows–tax revenues relationship—related to the mere illicit financial flows measurement and reverse causality—this paper exploits the Financial Action Task Force data using an impact assessment analysis. Estimations reveal a significant tax revenue loss in countries associated with important illicit financial flows with respect to comparable countries without important illicit financial flows. Moreover, this causal effect—estimated as being economically meaningful—is supported by a large robustness section, and in particular remains unchanged when using several “doubly robust” estimators. Lastly, it unveils heterogeneities in the impact of illicit financial flows on tax revenues, related to the type of tax—a significant loss for indirect but not for direct taxes—and the considered environment. Therefore, policies combating illicit financial flows—for example, by developing institutions or a sound financial system, as shown by the estimations—may provide additional tax revenues for the developing world.
    Keywords: Social Conflict and Violence,International Trade and Trade Rules,Financial Sector Policy,Legal Products,Judicial System Reform,Standards and Technical Regulations,Social Policy,Regulatory Regimes,Legal Reform,Trade and Standards,Legislation,Trade Law,Trade Technology and Productivity,Foreign Trade Promotion and Regulation,Financial Regulation&Supervision
    Date: 2021–09–23
  9. By: Serzo, Aiken Larisa O.
    Abstract: This study reviews Philippine regulations governing digital platforms with cross-border operations and the impacts of these laws on the ability of platforms to innovate and participate in the global economy. There is no shortage of constitutional, statutory, and policy support for innovation, e-commerce, digitization, and entrepreneurship. However, there is a disconnect between these policies and the environment created by how implementing statutes and regulations evolved. These regulatory gaps could negatively impact digital platforms in two ways. First, they inhibit innovation because uncertainties could limit funding opportunities and discourage firms from developing or launching novel products. Second, gaps and overlaps could lead to cross-border and domestic regulatory arbitrage, forcing firms to relocate to areas or jurisdictions where risks are more manageable. Therefore, this paper recommends a recalibration of regulations, taking into consideration the policy objectives on innovation vis-Ã -vis the protection of Filipino consumers and entrepreneurs. Policymakers could take advantage of regulatory intersections to further innovation policies. They could also consider various interventions to achieve such reforms without necessarily resorting to constitutional changes. The government could review its taxation, labor, consumer protection, and investment regulations, ensuring that these laws do not stifle innovation.
    Keywords: regulatory reform; foreign direct investment;digital platforms; internet law; startups; internet economy; data privacy; mas media
    Date: 2021
  10. By: Esther Arenas-Arroyo; Bernhard Schmidpeter (Johannes Kepler Universtiy Linz)
    Abstract: We study the spillover effects of immigration enforcement policies on children’s human capital. Exploiting the temporal and geographic variation in the enactment of immigration enforcement policies, we find that English language skills of US-born children with at least one undocumented parent are negatively affected by the introduction of these policies. Changes in parental investment behavior cause this reduction in children’s English skills. Parents are less likely to enroll their children in formal non-mandatory preschool, substituting formal non-mandatory preschool education with parental time at home. Parents also reduce time spent on leisure and socializing, providing children with fewer opportunities to interact and lean from others. Ultimately, these developments reduce children’s long-term educational success. Exposure to immigration enforcement during early childhood lowers the likelihood of high school completion. We also find negative, though imprecise, effects on college enrollment.
    Keywords: Immigration policies, children’s human capital, children’s language skills, parental investment
    JEL: K37 J13 J15
    Date: 2022–10
  11. By: Okunogbe,Oyebola Motunrayo
    Abstract: Tax revenue in many low-income countries is inadequate for funding government investment ininfrastructure and public services. This paper examines two dimensions of low state capacity that hinder tax collection:the inability to ascertain the tax base (detection capacity) and the inability to enforce unpaid liabilities (enforcementcapacity). A randomized experiment with Liberian property owners finds that using identifying information from a newlydeveloped property database to alert property owners that their noncompliance has been detected quadruples the taxpayment rate, but only when the notice includes details on the penalties for noncompliance. A second experiment finds afurther increase in compliance from signaling greater enforcement probability to delinquent property owners. Theseresults highlight the importance of investments in both detection and enforcement capacity.
    Keywords: Public Finance Decentralization and Poverty Reduction,Tax Administration,Public Sector Economics,Macro-Fiscal Policy,Economic Adjustment and Lending,Taxation & Subsidies,Tax Law,Mining & Extractive Industry (Non-Energy),Crime and Society
    Date: 2021–11–17
  12. By: Arenas-Arroyo, Esther (Vienna University of Economics and Business); Schmidpeter, Bernhard (University of Linz)
    Abstract: We study the spillover effects of immigration enforcement policies on children's human capital. Exploiting the temporal and geographic variation in the enactment of immigration enforcement policies, we find that the English language skills of US-born children with at least one undocumented parent are negatively affected by the introduction of these policies. Changes in parental investment behavior cause this reduction in children's English skills. Parents are less likely to enroll their children in formal non-mandatory preschool, substituting formal non-mandatory preschool education with parental time at home. Parents also reduce time spent on leisure and socializing, providing children with fewer opportunities to interact and learn from others. Ultimately, these developments reduce children's long-term educational success. Exposure to immigration enforcement during early childhood lowers the likelihood of high school completion. We also find negative, though imprecise, effects on college enrollment.
    Keywords: parental investment, children's language skills, children's human capital, Immigration policies
    JEL: K37 J13 J15
    Date: 2022–10
  13. By: Maskus,Keith E.; Ridley,William Clifton
    Abstract: This paper uses the World Bank database on deep trade agreements to demonstrate the rapid increase in preferential trade agreements with standards of intellectual property protection that are enforceable and elevated beyond the minimums required in the World Trade Organization Trade-Related Aspects of Intellectual Property Rights Agreement. These accords are referred to as intellectual property–related preferential trade agreements. The paper sets out a treatment-control econometric approach, in which treated agreements are defined by various characteristics and the control group is other preferential trade agreements. This approach is used to study whether membership in intellectual property–related preferential trade agreements affects a country’s trade with nonmember countries. For this purpose, the paper defines a set of industries that intensively use intellectual property rights (the high-intellectual property group) and a set of industries that do not (the low-intellectual property group). There is evidence that countries in these agreements with the United States, the European Union, or the European Free Trade Association experience significant increases in third-country aggregated exports of biopharmaceuticals at all levels of income, while exports of low-intellectual property goods are relatively diminished, compared with the control preferential trade agreements. This result is reinforced using detailed bilateral sectoral trade and holds also for exports of medical devices from higher-income economies. Because these industries are the target of many elevated standards in intellectual property–related preferential trade agreements, the result suggests that these policies affect trade volumes. Further exploratory analysis suggests that these impacts are associated with higher local sales of affiliates of multinational firms, using US data. These are viewed as preliminary findings that point to the need for further analysis.
    Keywords: International Trade and Trade Rules,Information Technology,Intellectual Property Rights,Legal Products,Common Property Resource Development,Social Policy,Regulatory Regimes,Legal Reform,Real&Intellectual Property Law,Legislation,Judicial System Reform,Information Security&Privacy,Pharmaceuticals Industry,Pharmaceuticals&Pharmacoeconomics
    Date: 2021–05–12
  14. By: Donna Brown; Jonathan Wadsworth
    Abstract: In 2015, the UK government exempted "low-risk" self-employed workers from legislation on workplace safety. This reversed a move two decades earlier that incorporated the self-employed more fully into the same regulatory framework as employees. This paper examines whether workplace accidents among self-employed workers shifted after these two changes to safety regulations. A difference-in-differences estimation framework suggests that the extension of regulation in 1999 had little impact on relative accident rates. In contrast, after 2015, accident rates for high and low risk self-employed converged, driven primarily by a steep fall in accident rates among those still covered by legislation.
    Keywords: non-fatal workplace accidents, self employed, de-regulation, health and safety
    Date: 2022–06–22
  15. By: Elisa Casi; Mohammed Mardan; Rohit Reddy Muddasani
    Abstract: We study the short-term effect of the introduction of the mandatory disclosure programme for aggressive tax arrangements by focusing on the one introduced in May 2018 under Council Directive 2018/288/EU (or DAC6). Employing bilateral data on cross-border deposits, we study the effect of this new disclosure requirement on cross-border tax evasion. Our results show a reduction of cross-border deposits in EU countries with strong enforcement, captured by large monetary penalties for misreporting.
    Keywords: Tax evasion, Income under-reporting, Regulation, Wealth, Income
    Date: 2022
  16. By: Nemschoff, Danielle
    Abstract: Police officers in the United States are most often the first responders to a mental health crisis. The most popular training method for these responses among US police departments is crisis-intervention team (CIT) training. This paper provides the first estimates of the causal effect of CIT training on a police officer's propensity to use force and make an arrest. I implement a difference-in-differences framework using future trainees as controls to compare officer use of force and arrest of trained officers to those of untrained officers. I do not find a statistically significant effect of CIT training on either use of force or propensity to arrest.
    Keywords: policing; crisis-intervention; mental health; police; use of force; arrest; crisis response; CIT
    JEL: J0 K0
    Date: 2022–10–12

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