nep-law New Economics Papers
on Law and Economics
Issue of 2023‒11‒20
eight papers chosen by
Yves Oytana, Université de Franche-Comté

  1. Shots Fired: Crime and Community Engagement with Law Enforcement after High-profile Acts of Police Violence By Desmond Ang; Panka Bencsik; Jesse Bruhn; Ellora Derenoncourt
  2. Plea bargaining procedures worldwide: Drivers of introduction and use By Paolini, Gabriele; Kantorowicz-Reznichenko, Elena; Voigt, Stefan
  3. Norms of Corruption in Politicians’ Malfeasance By Gustavo J. Bobonis; Anke Kessler; Xin Zhao
  4. The real effects of judicial enforcement By Pezone, Vincenzo
  5. Laffer's Day in Court: The Revenue Effects of Criminal Justice Fees and Fines By Samuel Norris; Evan K. Rose
  6. The Economics of Copyright in the Digital Age By Christian Peukert; Margaritha Windisch
  7. Great expectations: a tale of two transitions By Daniele Girardi; Roberto Veneziani; Susanne Wengle
  8. AI-Generated Inventions: Implications for the Patent System By Gaetan de Rassenfosse; Adam Jaffe; Melissa Wasserman

  1. By: Desmond Ang (Harvard University); Panka Bencsik (Vanderbilt University); Jesse Bruhn (Brown University); Ellora Derenoncourt (Princeton University and NBER)
    Abstract: How does police violence affect civilian engagement with law-enforcement? We document a sharp rise in gunshots coupled with declining 911 call volume across thirteen major US cities in the aftermath of the murder of George Floyd. This pattern occurs in both white and non-white neighborhoods, is not driven by ceiling effects in crime reporting, persists beyond the protest movement, and is not accompanied by large declines in police response times. We find similar declines in reporting after the murder of Michael Brown, but not for other, less nationally salient police murders. Trends in national survey data reveal that police favorability also declined sharply after George Floyd’s murder, and that victims of crime became less likely to report their victimization due to fear of police harassment. Our results suggest that high profile acts of police violence may erode a key input into effective public safety, civilian crime reporting, and highlight the call-to-shot ratio as a natural measure of community engagement with law-enforcement.
    Keywords: police, crime reporting, use of force, race
    JEL: K4
    Date: 2023–07
  2. By: Paolini, Gabriele; Kantorowicz-Reznichenko, Elena; Voigt, Stefan
    Abstract: Over the last three decades, plea bargaining procedures have been adopted by a large number of jurisdictions worldwide. However, a comprehensive account of the current adoption and use of such procedures is still missing. We survey 174 jurisdictions, finding that 101 of them have a formalized plea-bargaining procedure. For 52 jurisdictions, we also compute a plea-bargaining rate, defined as the percentage of convictions imposed through plea bargaining over all criminal convictions imposed. By employing our novel dataset, we find that both a relative majority of Muslims in the population and the French and Scandinavian legal origins are associated with lower probabilities of formalizing plea bargaining. Regarding its use in practice, an increase in GDP per capita is associated with greater plea-bargaining rates up to a certain point, after which the relationship becomes negative. The Spanish and Socialist legal origins, a looser regulation of plea bargaining, and the presence of jury trials are all associated with higher plea-bargaining rates.
    Keywords: plea bargaining, Law and Economics, Empirical Legal Studies, criminal procedure, comparative law
    Date: 2023
  3. By: Gustavo J. Bobonis; Anke Kessler; Xin Zhao
    Abstract: To what extent can audits serve to limit patronage and corrupt networks effectively and sustainably in clientelist societies with a prevailing norm of corruption? We develop a political agency model in which office holders are motivated to reduce rent seeking behavior through re-election incentives operating via elections and audits (formal institutions), but also through reputational concerns that are influenced by the prevailing norm on corruption in their peer group (informal institutions). We show that, while the formal institutions of audits and elections have the desired direct effect of reducing corruption, they also affect informal rules of conduct, which can have unintended effects. We then apply this theoretical framework to evidence from Puerto Rico’s anti-corruption municipal audits program over the period 1987-2014, and argue that the interaction of elections, audits, and norms can help explain a peculiar pattern in the data. Using a quasi-experimental design based on the exogenous timing of audits relative to elections, we find that mayors respond positively to audits in their own community, but negatively to audits - and the corresponding reduction in corruption - in neighboring municipalities. Our estimates suggest a large negative spillover effect: communities where two-thirds of adjacent jurisdictions undergo a (timely) audit experience a 30 percent increase in reported corruption levels.
    Keywords: corruption; rent-seeking; public sector accounting and audits; social norms; institutional arrangements
    JEL: D72 H83 K42 O17
    Date: 2023–10–31
  4. By: Pezone, Vincenzo (Tilburg University, School of Economics and Management)
    Date: 2023
  5. By: Samuel Norris; Evan K. Rose
    Abstract: Many jurisdictions levy sizable fines and fees (legal financial obligations, or LFOs) on criminal defendants. Proponents argue LFOs are a “tax on crime” that funds courts and provides deterrence; opponents argue they do neither. We examine the fiscal implications of lowering LFOs. Incentives to default generate a “Laffer” curve with revenue eventually decreasing in LFOs. Using detailed administrative data, however, we find few defendants demonstrably on the right-hand side of the curve. Those who are tend to be poor, Black, and charged with felonies. As a result, decreasing LFOs for the average defendant would come at substantial cost to governments.
    JEL: H2
    Date: 2023–10
  6. By: Christian Peukert; Margaritha Windisch
    Abstract: Intellectual property rights are fundamental to how economies organize innovation and steer the diffusion of knowledge. Copyright law, in particular, has developed constantly to keep up with emerging technologies and the interests of creators, consumers, and intermediaries of the different creative industries. We provide a synthesis of the literature on the law and economics of copyright in the digital age, with a particular focus on the available empirical evidence. First, we discuss the legal foundations of the copyright system and developments of length and scope throughout the era of digitization. Second, we review the literature on technological change with its opportunities and challenges for the stakeholders involved. We give special attention to empirical evidence on online copyright enforcement, changes in the supply of works due to digital technology, and the importance of creative re-use and new licensing and business models. We then set out avenues for further research identifying critical gaps in the literature regarding the scope of empirical copyright research, the effects of technology that enables algorithmic licensing, and copyright issues related to software, data and artificial intelligence.
    Keywords: copyright, digitization, technology, enforcement, licensing, business models, evidence
    JEL: K11 L82 L86
    Date: 2023
  7. By: Daniele Girardi (Department of Political Economy, King’s College London, London, UK; and Department of Economics, University of Massachusetts Amherst, USA); Roberto Veneziani (School of Economics and Finance, Queen Mary University of London,); Susanne Wengle (Department of Political Science, University of Notre Dame, South Bend, U.S.A.)
    Abstract: Over a quarter of the world’s population lives in economies that have undertaken transitions from central planning to market economies. These transitions entail far-reaching and complex changes in social, economic and political institutions and have had widely divergent outcomes. Important strands of literature have emphasised the strategic complementarities that characterise the transition process in both the economic and political realms. Contrary to a widespread assumption, market-supporting institutions do not necessarily arise when assets are privatised in a highly unstable and uncertain environment; in fact, multiple equilibria emerge and expectations may play a key role in equilibrium selection. In this paper, we survey the vast empirical literature on transition economies in order to provide evidence on the correlation between expectations at the beginning of transition and success of the transition process. We provide the first comprehensive survey of the literature on agents’ subjective perceptions of transitions’ paths.
    Keywords: Transition, expectations, multiple equilibria, property rights.
    JEL: D73 P31 P26 K42
    Date: 2023–11–07
  8. By: Gaetan de Rassenfosse (Ecole polytechnique federale de Lausanne); Adam Jaffe (Brandeis University); Melissa Wasserman (The University of Texas at Austin - School of Law)
    Abstract: This symposium Article discusses issues raised for patent processes and policy created by inventions generated by artificial intelligence (AI). The Article begins by examining the normative desirability of allowing patents on AI-generated inventions. While it is unclear whether patent protection is needed to incentivize the creation of AI-generated inventions, a stronger case can be made that AI-generated inventions should be patent eligible to encourage the commercialization and technology transfer of AI-generated inventions. Next, the Article examines how the emergence of AI inventions will alter patentability standards, and whether a differentiated patent system that treats AI-generated inventions differently from hu-man-generated inventions is normatively desirable. This Article concludes by considering the larger implications of allowing patents on AI-generated inventions, including changes to the patent examination process, a possible increase in the concentration of patent ownership and patent thickets, and potentially unlimited inventions.
    Keywords: generative AI; patent; intellectual property; invention
    JEL: K20 D23 O34
    Date: 2023–05

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