nep-law New Economics Papers
on Law and Economics
Issue of 2023‒03‒27
seven papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Resolving Lawsuits with a Decisive Oath: An Economic Analysis By Metin M. Cosgel; Thomas J. Miceli; Emre Özer
  2. Criminal court fees, earnings, and expenditures: A multi-state RD analysis of survey and administrative data By Carl Lieberman; Elizabeth Luh; Michael Mueller-Smith
  3. Rethinking Taxation in the Digital Economy By Bañez, Emerson S.
  4. Civic monitoring for environmental enforcement. Exploring the potential and use of evidence gathered by lay people By BERTI SUMAN Anna
  5. Unsupervised Machine Learning for Explainable Health Care Fraud Detection By Shubhranshu Shekhar; Jetson Leder-Luis; Leman Akoglu
  6. Strong sustainability and property rights By Eric KEMP-BENEDICT
  7. Trust Institutions, Perceptions of Economic Performance and the Mitigating role of Political Diversity in Sub-Saharan Africa By Samba Diop; Simplice A. Asongu

  1. By: Metin M. Cosgel (University of Connecticut); Thomas J. Miceli (University of Connecticut); Emre Özer (University of Connecticut)
    Abstract: The decisive oath is an interesting but little-known element in some legal proceedings, mostly in civil law traditions. It is different from ordinary (testimonial) oaths that are routinely administered to witnesses at trial with the aim of eliciting only truthful testimony, but which are of dubious value in achieving that end. By contrast, a decisive oath can end a lawsuit in cases where the plaintiff has no evidence. We use a simple economic model of litigation to examine the impact of the decisive oath in resolving lawsuits. To test the implications of the model, we focus on the relationship between the stakes of the case and litigation outcomes by using data from the early nineteenth century Ottoman courts. The results show that (1) resolution by trial rather than settlement was more likely as the stakes increased; (2) among cases that did not settle, trial by evidence rather than oath was more likely as the stakes increased; (3) among cases that were not resolved by evidence, plaintiffs were less likely to request an oath as the stakes increased; and (4) among cases where the plaintiff requested an oath, the impact of the stakes on the defendant’s decision to take an oath was ambiguous. Our analysis contributes both to the theoretical literature on the economics of dispute resolution, and to the historical literature on the role of decisive oaths in resolving legal disputes, especially in Islamic societies.
    Keywords: Decisive oath, law, dispute resolution, legal procedure, litigation, settlement, trial, evidence, lying, Ottoman law
    JEL: D91 K10 K20 K40 N45 P48 Z12
    Date: 2023–03
  2. By: Carl Lieberman; Elizabeth Luh; Michael Mueller-Smith
    Abstract: Millions of people in the United States face fines and fees in the criminal court system each year, totaling over $27 billion in overall criminal debt to-date. In this study, we leverage five distinct natural experiments in Florida, Michigan, North Carolina, Texas, and Wisconsin using regression discontinuity designs to evaluate the causal impact of such financial sanctions and user fees. We consider a range of long-term outcomes including employment, recidivism, household expenditures, and other self-reported measures of well-being, which we measure through a combination of administrative records on earnings and employment, the Criminal Justice Administrative Records System, and household surveys. We find consistent evidence across the range of natural experiments and subgroup analyses of precise null effects on the population, ruling out long-run impacts larger than +/-3.6% on total earnings and +/-4.7% on total recidivism. Failure to find changes in outcomes undermines popular narratives of poverty traps arising from criminal debt but argues against the use of fines and fees as a source of local revenue and as a crime control tool.
    Keywords: criminal justice, fines, deterrence, recidivism, labor market outcomes
    JEL: H72 J24 K42
    Date: 2023–02
  3. By: Bañez, Emerson S.
    Abstract: The study aims to evaluate the country’s legal framework for taxing digital transactions, specifically, the extent to which the provisions of the law can map onto the value of digital markets. Based on the findings on the structure of the digital commerce value chain and its possible interactions with both current and proposed tax regimes, four policy prescriptions are recommended: (1) to optimize existing tax authority over platforms, (2) to establish a digital-ready tax administration, (3) to expand the scope for investigation and liability, and (4) to promote engagement at the international level. Nonresident providers have gained the most from digital markets while minimizing the tax impact of their activities. Thus, the Philippines should continue to explore multilateral options for reallocating taxing rights and addressing base erosion and profit shifting. These include regional tax treaties and the OECD framework treaty. Efforts at negotiating and crafting the provisions should consider the Philippines’ trading power relative to other countries and its comparative ability to exercise jurisdiction. Comments to this paper are welcome within 60 days from the date of posting. Email
    Keywords: digital taxation;taxes;digital commerce;tax law;tax administration
    Date: 2022
  4. By: BERTI SUMAN Anna (European Commission - JRC)
    Abstract: → Civic monitoring is a powerful source of evidence for law enforcement. Action in court through evidence gathered by lay people (i.e. people not officially responsible for doing so) can signal unaddressed demands. → The emersion of a spontaneous civic environmental monitoring initiative indicates the potential presence of distrust but can also be an occasion for cooperation between citizens and authorities on a shared issue. → Civic environmental monitoring is also contributing to the provision of public services. Embracing these practices can be an opportunity for authorities to make governance models more inclusive and responsive. → Performing civic environmental monitoring should be recognised as a rightful contribution to official enforcement of environmental law.
    Keywords: Civic monitoring
    Date: 2023–01
  5. By: Shubhranshu Shekhar; Jetson Leder-Luis; Leman Akoglu
    Abstract: The US spends more than 4 trillion dollars per year on health care, largely conducted by private providers and reimbursed by insurers. A major concern in this system is overbilling, waste and fraud by providers, who face incentives to misreport on their claims in order to receive higher payments. In this work, we develop novel machine learning tools to identify providers that overbill insurers. Using large-scale claims data from Medicare, the US federal health insurance program for elderly adults and the disabled, we identify patterns consistent with fraud or overbilling among inpatient hospitalizations. Our proposed approach for fraud detection is fully unsupervised, not relying on any labeled training data, and is explainable to end users, providing reasoning and interpretable insights into the potentially suspicious behavior of the flagged providers. Data from the Department of Justice on providers facing anti-fraud lawsuits and case studies of suspicious providers validate our approach and findings. We also perform a post-analysis to understand hospital characteristics, those not used for detection but associate with a high suspiciousness score. Our method provides an 8-fold lift over random targeting, and can be used to guide investigations and auditing of suspicious providers for both public and private health insurance systems.
    JEL: C19 D73 I13 K42 M42
    Date: 2023–02
    Abstract: The core principle of strong sustainability is non-substitutability. Many economic resources rely on ecosystem function, which is at best partially substitutable; ecosystem function can be maintained under moderate pressure, but at some level ecosystem function is compromised. Markets tend to promote degradation of ecosystems and loss of ecosystem function, raising the question what possible alternatives could support human provisioning while maintaining ecosystem function. This paper argues that a useful entry point is the property rights regimes that underpin markets. It briefly reviews how property rights have been theorized or observed to act in economic systems. It then draws on indigenous property law and the Law and Political Economy literatures to critique prevailing views. Finally, it suggests that property rights in an economics for strong sustainability should be framed in terms of general duties (or duties in rem) towards ecosystems.
    JEL: Q
    Date: 2023–02–23
  7. By: Samba Diop (Alioune Diop University, Bambey, Senegal); Simplice A. Asongu (Yaoundé, Cameroon)
    Abstract: Several previous studies have explored the relationship between trust and socio-economic conditions but do not attempt to examine channels through which the relation operates. In this paper, we examine how political fractionalization mitigates the positive relationship between trust institutions and national economic performance in Sub-Saharan Africa. Using Round 7 data of Afrobarometer in over 1000 districts in 34 countries, we find that trust institutions positively and significantly affect economic performance. Nevertheless, the positive effect is attenuated in districts with a high level of political diversity. More specifically, a higher level of trust is associated with lower economic performance at a higher level of political fractionalization and vice versa, with a steady linear decrease of the estimated coefficients. Policy implications are discussed.
    Keywords: Trust institutions; economic performance; political diversity
    JEL: K00 O10 P16 P43 P50
    Date: 2023–01

This nep-law issue is ©2023 by Eve-Angeline Lambert. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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