nep-law New Economics Papers
on Law and Economics
Issue of 2023‒04‒03
twelve papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Criminal charges, risk assessment and violent recidivism in cases of domestic abuse By Dan A. Black; Jeffrey Grogger; Tom Kirchmaier; Koen Sanders
  2. Money under the mattress: economic crisis and crime By Eleni Kyrkopoulou; Alexandros Louka; Kristin Fabbe
  3. Rivals’ Exit and Vertical Merger Evaluation By Javier D. Donna; Pedro Pereira
  4. Religious leaders and rule of law By Sultan Mehmood; Avner Seror
  5. When do more police induce more crime? By Federico Weinschelbaum; Casilda Lasso de la Vega; Oscar Volij
  6. Do Minimum Wage Hikes Lead to Employment Destruction? Evidence from a Regression Discontinuity Design in Argentina By Nicolás Francisco Abbate; Bruno Jimnez
  7. Competition, regulation and growth in a digitized world: Dealing with emerging competition issues in digital markets By Giuseppe Nicoletti; Cristiana Vitale; Carolina Abate
  8. Insolvency Frameworks across the EU:Challenges after COVID-19 By Leonor Coutinho; Andreas Kappeler; Alessandro Turrini
  9. The effects of fiscal institutions on fiscal adjustments By Christos Chrysanthakopoulos; Athanasios Tagkalakis
  10. Both eyes open: Vigilant Incentives help Regulatory Markets improve AI Safety By Paolo Bova; Alessandro Di Stefano; The Anh Han
  11. PARLIAMENTARY DISCOURSE ON NUTRITION: What motivates law makers to ask questions By Sripada, Jyotsna; Raman, Shruthi; Sharma, Neetu Dr; Johnston, Robert; Chamois, Sylvie; de Wagt, Arjan; Sarwal, Rakesh
  12. The impact of climate legislation on trade-related carbon emissions 1996–2018 By Eskander, Shaikh M.S.U.; Fankhauser, Sam

  1. By: Dan A. Black; Jeffrey Grogger; Tom Kirchmaier; Koen Sanders
    Abstract: Domestic abuse is a pervasive global problem. Here we analyze two approaches to reducing violent DA recidivism. One involves charging the perpetrator with a crime; the other provides protective services to the victim on the basis of a formal risk assessment carried out by the police. We use detailed administrative data to estimate the average effect of treatment on the treated using inverse propensity-score weighting (IPW). We then make use of causal forests to study heterogeneity in the estimated treatment effects. We find that pressing charges substantially reduces the likelihood of violent recidivism. The analysis also reveals substantial heterogeneity in the effect of pressing charges. In contrast, the risk-assessment process has no discernible effect.
    Keywords: domestic abuse, charges, risk assessment, propensity score weighting , Crime
    Date: 2023–01–20
  2. By: Eleni Kyrkopoulou (University of Piraeus); Alexandros Louka (Foundation for Economic and Industrial Research); Kristin Fabbe (Harvard Business School)
    Abstract: The paper investigates the effect of a (semi-) deposit run during a debt crisis on crime rates. The study focuses on Greece’s protracted debt crisis (2009-2018) and analyzes the response of crime to deposit outflows. It shows that deposit outflows corresponded to a significant increase in property crimes (thefts and burglaries), but not other types of offenses. Our findings suggest that policy makers should also consider the potential criminogenic effects of financial destabilization.
    Keywords: Crime rate; Greece; crisis; bank deposits;property crime
    JEL: K42
    Date: 2022–12
  3. By: Javier D. Donna (University of Florida); Pedro Pereira (Instituto Universitário de Lisboa)
    Abstract: We discuss a subset of vertical mergers, where the exercise of market power and the efficiencies enabled by a vertical merger reduce rivals’ profits, making rivals’ exit a potentially serious concern. Rivals’ exit can fundamentally alter the welfare analysis of vertical mergers due to the reduction in product variety to consumers and the reduction in the number of competitors that would otherwise exert downward pricing pressure. An exit-inducing vertical merger might reduce welfare even if it is a welfare-enhancing merger absent exit. We present a theoretical framework to analyze vertical mergers that focuses on the possibility and consequences of exit, discuss the antitrust implications for merger evaluation, and provide examples. We argue that the possibility of rivals’ exit should be an integral part of the analysis of vertical mergers.
    Keywords: Antitrust, Vertical Mergers, Rivals’ Exit, Double Marginalization, Merger Evaluation, Competition Policy.
    JEL: K21 K41 L42 L44 L52
    Date: 2023–03
  4. By: Sultan Mehmood (NSE - New Economic School of Moscow, AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique); Avner Seror (AMSE - Aix-Marseille Sciences Economiques - EHESS - École des hautes études en sciences sociales - AMU - Aix Marseille Université - ECM - École Centrale de Marseille - CNRS - Centre National de la Recherche Scientifique)
    Abstract: In this paper, we provide systematic evidence of how historical religious institutions affect the rule of law. In a difference-in-differences framework, we show that districts in Pakistan where the historical presence of religious institutions is higher, rule of law is worse. This deterioration is economically significant, persistent, and likely explained by religious leaders gaining political office. We explain these findings with a model where religious leaders leverage their high legitimacy to run for office and subvert the Courts. We test for and find no evidence supporting several competing explanations: the rise of secular wealthy landowners, dynastic political leaders and changes in voter attitudes are unable to account for the patterns in the data. Our estimates indicate that religious leaders expropriate rents through the legal system amounting to about 0.06 percent of GDP every year.
    Date: 2023–01
  5. By: Federico Weinschelbaum; Casilda Lasso de la Vega; Oscar Volij
    Abstract: We provide a necessary and sufficient condition on the equilibrium of a Walrasian economy for an increase in police expenditure to induce an increase in crime. It turns out that this is essentially the condition for the Laffer curve to be downward sloping at a given ad valorem tax rate. Notably, such a perverse effect of police on crime is consistent with any appropriation technology and could arise even if the level of police protection is the socially optimal one.
    JEL: D7 H2
    Date: 2022–11
  6. By: Nicolás Francisco Abbate; Bruno Jimnez
    Abstract: In this paper, we evaluate a series of minimum wage hikes implemented in the early XXIst century in Argentina using administrative records of registered employment. We identify the effect of raising the minimum wage on job separations via a regression discontinuity design. More specifically, we compare the match destruction rates for a treatment group directly bound by the minimum wage hikes and a control group slightly out of its legal scope. We show that this method represents an improvement over previous ones because it reduces the incidence of Type-I error. We find that, when aggregated, these hikes had a precisely estimated zero effect on separation rates. However, the increases enacted in 2008 arise as an exception. They decreased separations by 4.8 percentage points (19%). These results suggest that the employment effects of minimum wages may not flow through employment destruction.
    JEL: J31 J80
    Date: 2022–11
  7. By: Giuseppe Nicoletti; Cristiana Vitale; Carolina Abate
    Abstract: Digital markets have raised a number of new competition challenges. Ex-post competition policy appears not to be able to address them in their entirety and with the necessary speed. There is considerable consensus, among academics and policy-makers, that ex-ante regulatory policies are needed to avoid competition being stifled in these markets, with a negative impact on productivity and innovation. As a result, major OECD economies are discussing or have approved regulatory proposals with the aim to foster contestability and fair trade in digital markets.
    Keywords: Competition, Digital Economy, Digital Market Act, Digital Markets, Gatekeepers, Platforms, Product Market Regulation, Productivity, Regulation
    JEL: D4 K3 L1 L2 L4 L5
    Date: 2023–03–20
  8. By: Leonor Coutinho; Andreas Kappeler; Alessandro Turrini
    Abstract: Efficient insolvency frameworks align incentives in such a way that viable corporate debt is repaid, while unviable debt is resolved. Moreover, in a context of high corporate indebtedness, the insolvency framework requires sufficient capacity to adequately deal with a rising number of insolvency cases. The aim of the present paper is fourfold: (i) to illustrate the main concepts relating to insolvency frameworks and their economic relevance; (ii) to review the main characteristics of insolvency regimes across EU countries; (iii) to evaluate the severity of corporate vulnerabilities stemming from the COVID-19 crisis, taking into account how insolvencies and non-performing loans have developed in response to the global financial crisis; and (iv) to highlight the remaining challenges for insolvency systems in the EU on the basis of an estimate of the potential increase in insolvencies (insolvency gaps) and existing institutional settings and structural characteristics.
    JEL: D40 E31 L51
    Date: 2023–02
  9. By: Christos Chrysanthakopoulos (University of Patras); Athanasios Tagkalakis (Bank of Greece, University of Patras and Hellenic Parliamentary Budget Office)
    Abstract: Using a panel of 40 advanced economies over the period 1990-2020 this paper investigates the effect of various characteristics of fiscal councils and fiscal rules on the probability of starting a fiscal adjustment, as well as on the probability that this fiscal adjustment will be successful. The relevance of fiscal institutions’ characteristics is verified when considering alternative definitions of successful fiscal adjustments. Our results are robust after controlling for endogeneity of fiscal institutions’ characteristics (by the Augmented Inverse Probability Weighted estimator) with fiscal adjustments. We find that a fiscal rule with well specified escape clause, that has multi-year expenditure ceilings and excludes public investment can induce a successful fiscal adjustment. A fiscal council with enhanced remit, independence and accountability and extended tasks and instruments increase the probability of successful fiscal adjustments. Finally, we find that a fiscal council with extended tasks and instruments increase the probability of successful fiscal adjustments based on spending cuts.
    Keywords: Fiscal policy, Fiscal councils’ characteristics, Fiscal rules’ characteristics, Fiscal adjustments
    JEL: E02 E61 E62 H61
    Date: 2022–10
  10. By: Paolo Bova; Alessandro Di Stefano; The Anh Han
    Abstract: In the context of rapid discoveries by leaders in AI, governments must consider how to design regulation that matches the increasing pace of new AI capabilities. Regulatory Markets for AI is a proposal designed with adaptability in mind. It involves governments setting outcome-based targets for AI companies to achieve, which they can show by purchasing services from a market of private regulators. We use an evolutionary game theory model to explore the role governments can play in building a Regulatory Market for AI systems that deters reckless behaviour. We warn that it is alarmingly easy to stumble on incentives which would prevent Regulatory Markets from achieving this goal. These 'Bounty Incentives' only reward private regulators for catching unsafe behaviour. We argue that AI companies will likely learn to tailor their behaviour to how much effort regulators invest, discouraging regulators from innovating. Instead, we recommend that governments always reward regulators, except when they find that those regulators failed to detect unsafe behaviour that they should have. These 'Vigilant Incentives' could encourage private regulators to find innovative ways to evaluate cutting-edge AI systems.
    Date: 2023–03
  11. By: Sripada, Jyotsna; Raman, Shruthi; Sharma, Neetu Dr; Johnston, Robert; Chamois, Sylvie; de Wagt, Arjan; Sarwal, Rakesh
    Abstract: The review of two decades of parliamentary questions on nutrition and associated topics revealed information on the topics of interest, themes covered, nature of discourse and what influenced the composition of questions. We found that a majority of the questions raised focused upon the national level implementation of key programmes such as the Integrated Child Development Services (ICDS), Mid-day Meal Scheme (MDMS), Public Distribution System (PDS), Supplementary Nutrition Programme (SNP), Rajiv Gandhi Scheme for Empowerment of Adolescent Girls (SABLA) and Poshan Abhiyaan. In terms of house-wise distribution of questions, Lok Sabha had a higher number of questions as compared to the Rajya Sabha. The peak years for number of questions raised in the Parliament were 2009, 2011 and 2020. Poshan Abhiyaan, launched in 2018, was identified as the likely stimulus for many questions. Other important events in the nutrition domain were not found to be linked to the number or type of questions raised. In terms of probable triggers, only 10.7% of the total questions had references to specific articles or publications. Other key findings include: ` ` Out of a total of 52, 698 questions, 2, 005 questions (4%) were raised on nutrition and associated themes. The highest number of questions (233) were raised in 2021 and the lowest number in 2004 (38). The years 2009, 2010, 2011 and 2021 saw higher number of questions being raised ` ` Considering the underlying themes of major nutrition programmes, nearly 891 (44%) questions were addressed to the Ministry of Women and Child Development (MoWCD), 532 (27%) questions were directed at the Ministry of Health and Family Welfare (MoHFW), followed by 230 (11%) questions at the Ministry of Consumer Affairs, Food and Public Distribution ` ` Four broad categories of questions have emerged: Questions on the prevalence of malnutrition in the country; questions on nutrition programmes and interventions; questions on implementation of policies and plans of action; questions on institutional bodies including composition, roles and responsibilities and reports submitted by these institutions ` ` The number and composition of questions were driven by critical events and probable triggers related to nutrition that had occurred in that particular year but not limited to a particular session (there are 3 sessions per year) ` ` Majority of questions raised (74%) focused on the implementation of policies and programmes at the national level, whereas only 10% of the questions were concerned with the implementation of policies and programmes in specific States ` ` Five types of sources were cited in the Parliamentary Questions - newspaper articles, Global Hunger Index, Reports, reports published by the UNICEF, Supreme Court Orders and reports published by International and domestic organizations ` ` Amongst all the sources, reports published by UNICEF have been referred to the highest number of times and constituted 37.5% of the total number of questions that had mentioned a reference (81/221) ` ` The discourse on nutrition as evident from analysis appears to be repetitive and limited in scope. This is especially relevant in cases where sources or references were not stated clearly. Many questions leaned towards being outside the realm of discussion, thereby not suggesting any clear change in the policy, legal and institutional frameworks associated with nutrition.
    Date: 2023–01–30
  12. By: Eskander, Shaikh M.S.U.; Fankhauser, Sam
    Abstract: We analyse the international impact on carbon emissions from national climate legislation in 111 countries over 1996–2018. We estimate trade-related carbon leakage, or net carbon imports, as the difference between consumption and production emissions. Legislation has had a significant negative and roughly similar impact on both consumption and production emissions. The net impact on trade-related emissions is therefore not statistically significant, neither in the short term (laws passed in the last 3 years) nor the long term (laws older than 3 years). We find a significant negative long-term impact on domestic emissions from laws passed by trade partners. This latter specification corresponds to the traditional definition of carbon leakage. Overall, we conclude that there has been no detrimental effect of climate legislation on international emissions.
    Keywords: carbon leakage; climate change legislation; climate policy; consumption emissions; production emissions; technology spillovers
    JEL: F18 K32 Q54 Q56 Q58
    Date: 2023–02–22

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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