nep-law New Economics Papers
on Law and Economics
Issue of 2023‒05‒22
fifteen papers chosen by
Eve-Angeline Lambert, Université de Lorraine

  1. Correcting Racial Injustice: Forensic DNA Technology and the Exoneration of the Wrongfully Convicted By D'Este, Rocco; Yuchtman, Noam
  2. Federal-Local Partnerships on Immigration Law Enforcement: Are the Policies Effective in Reducing Violent Victimization? By Eric P. Baumer; Min Xie
  3. From Deforestation to Reforestation: The Role of General Deterrence in Changing Farmers' Behavior By Vieira, João Pedro; Dahis, Ricardo; Assunção, Juliano
  4. Introduction to the Symposium on the Shadow Economy, Tax Behaviour, and Institutions By Granda-Carvajal, Catalina; Kogler, Christoph
  5. Greening our Laws: Revising Land Acquisition Law for Coal Mining in India By Srivastav, Sugandha; Singh, Tanmay
  6. When Crime Tears Communities Apart: Social Capital and Organised Crime By Francesca Maria Calamunci; Federico Fabio Frattini
  7. Regulation and Competition in Public Procurement By Drake, Samielle; Xu, Fei
  8. Cannabis Taxation as a Revenue Source for Development: Opportunities and Challenges By Gallien, Max; Occhiali, Giovanni
  9. Prior Fraud Exposure and Precautionary Credit Market Behavior By Nathan Blascak; Ying Lei Toh
  10. Institutional pluralism and pro-poor land registration: lessons on interim property rights from urban Tanzania By Manara, Martina; Pani, Erica
  11. Consumer Bankruptcy, Mortgage Default and Labor Supply By Wenli Li; Costas Meghir; Florian Oswald
  12. The Usual Suspects: Offender Origin, Media Reporting and Natives' Attitudes Towards Immigration By Sekou Keita; Thomas Renault; Jérôme Valette
  13. Direct Taxes Litigation Management And Alternate Dispute Resolution. By De, Supriyo
  14. The EU-UK relationship: regulatory divergence and the level playing field By Susana Moreno Sánchez
  15. The Potential Distributional and Economic Wide Impact of the New Indonesia's VAT Law Implementation By Rus’an Nasrudin; Djoni Hartono; Faizal Rahmanto Moeis; Andhika Putra Pratama; Raka Rizky Fadilla; Rustam Effendi

  1. By: D'Este, Rocco (University of Sussex); Yuchtman, Noam (LSE)
    Abstract: We study the effects of laws streamlining access to post-conviction forensic DNA technology ("DNA laws"). We present a conceptual framework in which DNA laws' effects differ by race due to unequal access to non-DNA exoneration technologies. Consistent with the framework's predictions, we find that DNA laws: (i) increased DNA-based exonerations for Blacks and non-Blacks; (ii) increased total exonerations for Blacks, while non-Blacks exhibit substitution across exoneration technologies and smaller effects on total exonerations. We estimate that without DNA laws, around 100 wrongfully convicted Black Americans would have died in prison, with wrongfully convicted Blacks spending over 1, 800 additional years imprisoned.
    Keywords: racial inequality, criminal sentencing, legal institutions, technology and justice
    JEL: K40 J15 D63
    Date: 2023–04
  2. By: Eric P. Baumer; Min Xie
    Abstract: Our understanding of how immigration enforcement impacts crime has been informed by data from the police crime statistics. This study complements existing research by using longitudinal multilevel data from the National Crime Victimization Survey (NCVS) for 2005-2014 to simultaneously assess the impact of the three predominant immigration policies that have been implemented in local communities. The results indicate that the activation of Secure Communities and 287(g) task force agreements significantly increased violent victimization risk among Latinos, whereas they showed no evident impact on victimization risk among non-Latino Whites and Blacks. The activation of 287(g) jail enforcement agreements and anti-detainer policies had no significant impact on violent victimization risk during the period.Contrary to their stated purpose of enhancing public safety, our results show that the Secure Communities program and 287(g) task force agreements did not reduce crime, but instead eroded security in American communities by increasing the likelihood that Latinos experienced violent victimization. These results support the Federal government’s ending of 287(g) task force agreements and its more recent move to end the Secure Communities program. Additionally, the results of our study add to the evidence challenging claims that anti-detainer policies pose a threat to violence risk.
    Keywords: immigration policy, secure communities, 287(g), anti-detainer, crime, victimization
    Date: 2023–04
  3. By: Vieira, João Pedro; Dahis, Ricardo; Assunção, Juliano
    Abstract: We investigate the role of general deterrence in improving forest law enforcement in the Brazilian Amazon. Using a difference-in-differences strategy and novel farm-level data, we find that sanctions curbed deforestation and promoted reforestation among punished farmers and their neighbors. Heterogeneities reveal that even sanctions lacking incapacitation components lead to substantial behavioral changes and that farmers’ responsiveness to sanctions coincides with the government's commitment to enforcement. We find no evidence of significant strategic responses regarding spatial displacement or monitoring evasion. Overall, sanctions prevented 1.6 billion tonnes of CO2 emissions between 2006-2019, equivalent to 31% of US emissions in 2021.
    Date: 2023–04–19
  4. By: Granda-Carvajal, Catalina; Kogler, Christoph
    Abstract: This JOIE Symposium features some of the most influential papers presented in the 7th version of the conference on The Shadow Economy, Tax Behaviour and Institutions. Accordingly, it brings together contributions from several disciplines and schools of thought in the social sciences and the humanities exploring such issues as the role of formal and informal institutions in understanding the shadow economy, the importance of social aversion in the motivations for tax compliance, and the dual nature of corruption. This introduction lays out the scope of the symposium, summarises the preceding literature on the topic, and provides a brief outline of each contributing article, noting that, although each paper focuses on a different economic and cultural context, they share several elements in common with alternative theories addressing the institutional, psychological, and sociological aspects of tax law compliance and other appropriate behaviours.
    Keywords: shadow economy; tax behaviour; informal institutions; regional and country studies
    JEL: D73 H30 K42 O17 O50
    Date: 2023–05
  5. By: Srivastav, Sugandha; Singh, Tanmay
    Abstract: Laws that govern land acquisition can lock in old paradigms. We study one such case: the Coal Bearing Areas Act of 1957 (CBAA) which provides minimal social and environmental safeguards, and deviates in important ways from the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (LARR). The lack of due diligence in the CBAA confers an undue comparative advantage to coal development, which is inconsistent with India's current stance to phasedown coal use, reduce air pollution, and advance modern sources of energy. We argue that the premise under which the CBAA was historically justified is no longer valid due to significant changes in the local context. Namely, the environmental and social costs of coal-based energy are far more salient and the market has cleaner energy alternatives that are cost competitive. We recommend updating land acquisition laws to bring coal under the general purview of LARR or, at minimum, amending CBAA to ensure adequate environmental and social safeguards are in place, both in letter and practice.
    Keywords: coal, land acquisition, environmental protection, social impact assessment, rehabilitation and resettlement.
    Date: 2023–05
  6. By: Francesca Maria Calamunci (Department of Economics and Law, Sapienza University); Federico Fabio Frattini (Trinity College Dublin and Fondazione Eni Enrico Mattei)
    Abstract: What is the long-term effect of organised crime presence on social capital accumulation? By leveraging novel social capital and organised crime data, this study investigates this question within the Italian landscape. In an instrumental variable (IV) setting, we exploit the forced resettlement law that compelled organised crime members living in the South of Italy to resettle in the Centre-North area. Using a granular measure of tax compliance as a proxy for civic awareness, we find evidence that sustained exposure to mafia presence depresses social capital accumulation. This finding applies to other dimensions of social capital, such as civic engagement and political participation. Results are robust to a series of robustness checks, such as the alternative strategy which combines the migratory movements from the South and the allocation of Marshall Plan funds. The findings appear to be influenced by a tolerance of dishonest conduct, a decrease in institutional trust, and a general disengagement from social activities.
    Keywords: Organised Crime, Social Capital, Forced Resettlement, Expansion
    JEL: A13 J16 K4 N34 O15
    Date: 2023–05
  7. By: Drake, Samielle (Department of Economics, Umeå University); Xu, Fei (Department of Economics, Umeå University)
    Abstract: We examine, theoretically and empirically, the impacts of regulation on optimal bids and competition in public procurement depending on whom the regulation is imposed on. We show that regulation imposed solely on the winner of a procurement contract increases competition whereas regulation imposed on all potential bidders reduces competition. Both types of regulation raise bids in equilibrium. Furthermore, the expected outcomes of regulation depend on its enforceability as bidders adjust their optimal bids and the delivery of the contracts accordingly. Finally, the model’s theoretical implications are supported by behaviours observed in public procurement of cleaning services in Sweden.
    Keywords: Public Procurement; Regulation; Competition; Optimal Bids
    JEL: D44 H57 L51
    Date: 2023–05–02
  8. By: Gallien, Max; Occhiali, Giovanni
    Abstract: Recent years have seen an increasing number of countries across the globe establish legal markets for the production, distribution, and consumption of medicinal or recreational cannabis. With this has come the expectation that more markets will follow suit. Malta has legalised recreational cannabis in 2021, Germany has recently presented an outline of how its legalisation process will look like. The global legal cannabis market is currently estimated at over GBP 20 billion and expected to quadruple in the coming decade. Notably, while much of the attention has originally been directed toward high income consumption markets, like the US and Canada, there have been movements towards legalisation within low- and middle-income countries (LMICs) which traditionally have been large production centres supplying illegal markets across the globe: Morocco, Lesotho, Mexico, Colombia, to mention just a few. In this latter group of countries, the discourse on the development potential of cannabis legalisation was at times hyper-optimistic, citing the potential for job creation, rural development, lowering crime and raising tax income. A huge range of estimates on the size and potential of the cannabis industry have further fanned this enthusiasm. In South Africa it was estimated that the sector could contribute up to 130, 000 jobs and be worth as much as USD1.6 billion – about half of the minimum value that has been estimated for the Mexican market (USD3 billion). While this might seem huge figures, there is evidence of substantial investments into these sectors in LMICs. Between 2015 and 2019, the medical cannabis sector in Colombia received more than USD600 million in investment, while Lesotho received more than USD40 million in 2020 alone.
    Keywords: Finance,
    Date: 2023
  9. By: Nathan Blascak; Ying Lei Toh
    Abstract: This paper studies how past experiences with privacy shocks affect individuals’ take-up of precautionary behavior when faced with a new privacy shock in the context of credit markets. We focus on experiences with identity theft and data breaches, two kinds of privacy shocks that either directly lead to fraud or put an individual at an elevated risk of experiencing fraud. Using the announcement of the 2017 Equifax data breach, we show that individuals with either kind of prior fraud exposure were more likely to freeze their credit report and close credit card accounts than individuals with no prior exposure immediately after the announcement. We also find that prior victims of identity theft, a more serious type of exposure, were more likely to take precautionary actions than individuals who were victims of a previous data breach.
    Keywords: Equifax data breach; consumer credit; credit freeze
    JEL: D14 D18 G50
    Date: 2022–10–27
  10. By: Manara, Martina; Pani, Erica
    Abstract: While interim property rights are thought to achieve incremental improvements of tenure security and rights for the urban poor, there is surprisingly little research into the provision of starter documents in sub-Saharan Africa. Namely, how effective are interim property rights in responding to local demands for tenure security and rights in the long run and vis-à-vis other de facto and de jure tenure options? Drawing on an institutional analytic approach and mixed-method research, we study the Residential Licence programme of Tanzania, which offers short-term leases to around 220, 000 plots in Dar es Salaam. This interim property right has undergone substantial institutional drift, with decreasing uptake rates, low renewal rates and poor updating of records. Today, landholders value other de facto and de jure proofs of ownership over and above the Residential Licence, which is now less perceived as pro-poor and fit-for-purpose. These results illustrate that interim property rights need maintenance and recalibration, or they will ‘come adrift’ amidst other institutional layers. Reflecting on the effects of institutional layering in property rights, this paper contributes to literatures on incremental land reform and demand for land titles, and it provides important policy recommendations relevant to urban Tanzania and wider contexts.
    Keywords: Dar es Salaam Tanzania; incremental policy; institutional layering and Drift; interim property rights; land registration; land tenure security; legal pluralism; International Growth Centre TZA-19071; Richard Oram Fund (through Regional and Urban Planning Studies at the LSE; Postdoctoral Fellowship ( ES/W005719/1
    JEL: J50 Q15
    Date: 2023–06–01
  11. By: Wenli Li; Costas Meghir; Florian Oswald
    Abstract: We specify and estimate a lifecycle model of consumption, housing demand and labor supply in an environment where individuals may file for bankruptcy or default on their mortgage. Uncertainty in the model is driven by house price shocks, education specific productivity shocks, and catastrophic consumption events, while bankruptcy is governed by the basic institutional framework in the U.S. as implied by Chapter 7 and Chapter 13. The model is estimated using micro data on credit reports and mortgages combined with data from the American Community Survey. We use the model to understand the relative importance of the two chapters (7 and 13) for each of our two education groups that differ in both preferences and wage profiles. We also provide an evaluation of the BAPCPA reform. Our paper demonstrates importance of distributional effects of Bankruptcy policy.
    Keywords: Lifecycle; Bankruptcy; Housing; Mortgage Default; Labor Supply; Consumption; Education; Insurance; Moral hazard.
    JEL: G33 K35 J22 J31 D14 D18 D52 D53 E21
    Date: 2022–08–30
  12. By: Sekou Keita (IAB - Institute for Employment Research); Thomas Renault (UP1 - Université Paris 1 Panthéon-Sorbonne, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Jérôme Valette (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)
    Abstract: This paper analyses whether the systematic disclosure of criminals' origins in the press affects natives' attitudes towards immigration. It takes advantage of the unilateral change in reporting policy announced by the German newspaper Sächsische Zeitung in July, 2016. Combining individual-level panel data from the German Socio-Economic Panel from 2014 to 2018 with 402, 819 crime-related articles in German newspapers and those newspapers' market shares, we find that systematically mentioning the origins of criminals increases the relative salience of natives' criminality and reduces natives' concerns about immigration, breaking the implicit link between immigration and crime.
    Keywords: Immigration, Crime, Media Bias
    Date: 2022–10
  13. By: De, Supriyo (National Institute of Public Finance and Policy)
    Date: 2023–04
  14. By: Susana Moreno Sánchez (Banco de España)
    Abstract: Since the United Kingdom’s departure from the EU, policy decisions made by both the UK and the EU will, over time, lead to regulatory divergence and create barriers to trade between the two separate regulatory and legal spaces. The UK government has already undertaken a comprehensive review of all retained EU law, to reap the benefits of its regulatory autonomy, and specific regulatory reforms have been identified in high-growth sectors. Yet there are some constraints. The UK has committed to respecting certain EU and international standards provided for in the Trade and Cooperation Agreement concluded with the EU. Most notably, a common level of protection is secured in certain areas deemed relevant for the level playing field, such as subsidy control, taxation, labour and social standards and environment and climate, although the strength of the level playing field safeguards differs considerably by area. Moreover, regulatory divergence would come at the expense of single market access. In this setting, certain regulatory measures and subsidies granted to economic operators could be a potential source of political friction between the EU and the United Kingdom and could lead to future legal disputes under the Trade and Cooperation Agreement. At the first meeting of the Trade Specialised Committee on Level Playing Field for Open and Fair Competition and Sustainable Development held on 12 October 2021, EU and UK representatives addressed issues related to subsidy control (the UK’s Subsidy Control Bill and the EU’s proposed Regulation on foreign subsidies), specific subsidies (the UK’s renewable energy schemes and the EU’s Brexit Adjustment Reserve) and several regulatory initiatives on labour and social standards and environment and climate. These technical discussions could prove crucial in limiting the risk of EU-UK disputes arising in level playing field issues.
    Keywords: Brexit, EU-UK relationship, Trade and Cooperation Agreement (TCA), level playing field (LPF), regulatory autonomy, regulatory divergence
    JEL: F53 K33
    Date: 2022–09
  15. By: Rus’an Nasrudin (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Djoni Hartono (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Faizal Rahmanto Moeis (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Andhika Putra Pratama (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Raka Rizky Fadilla (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI)); Rustam Effendi (Institute for Economic and Social Research, Faculty of Economics and Business, Universitas Indonesia (LPEM FEB UI))
    Abstract: This article summarises the distributional and economic-wide impact of several policy scenarios of recent tax policy changes in Indonesia. Some of the scenario’s designs are directly drawn from the changes in the new Indonesian tax law or UU HPP (Law on Harmonization of Tax Regulations) concerning broadening the value-added tax (VAT) base. We use a Computable General Equilibrium (CGE) and Microsimulation approach to calculate the impact of these scenarios on economic growth, inflation, government revenue, poverty and inequality. All the scenarios intended to make the tax system simpler and more efficient, with less distortion, and broaden the tax base resulting in low to moderate effects on both macro and distributional indicators accompanied by a significant increase in the government revenue. Our results provide an ex-ante impact evaluation of the current VAT Law Implementation.
    Keywords: VAT — Indonesia — tax reform — growth — poverty — inequality
    JEL: H20 K34
    Date: 2022

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.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.