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on Law and Economics |
| By: | Selim Gulesci (Department of Economics, Trinity College Dublin); Marinella Leone (Department of Economics, University of Pavia); Sameen Zafar (Lahore University of Management Sciences) |
| Abstract: | We investigate the effects of Domestic Violence (DV) laws in Pakistan on violence against women. Using both survey data and crime reports, and exploiting the staggered introduction of the laws across different provinces over time, we show that the new laws had little to no effect on DV or femicides in Punjab and Sindh, while they led to an increase in both in Balochistan. The effect in Balochistan is driven by ethnic groups with more conservative attitudes towards DV and divorce. Our findings show that introduction of laws that conflict with prevailing social norms may risk backfiring. |
| Keywords: | Domestic violence laws; social norms; violence against women |
| JEL: | J12 J16 K42 |
| Date: | 2024–02 |
| URL: | http://d.repec.org/n?u=RePEc:tcd:tcduee:tep0324&r=law |
| By: | Abatemarco, Antonio (CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy); Cascavilla, Alessandro (UnitelmaSapienza Università degli Studi di Roma); Dell'Anno, Roberto (CELPE - CEnter for Labor and Political Economics, University of Salerno, Italy); Morone, Andrea (Università degli Studi di Bari Aldo Moro) |
| Abstract: | Corruption is known to be one of the real life situations which may jeopardize the effectiveness of fines in deterring crime. We present a model of ‘crime with corruption’ by which both the dilution of crime deterrence due to corruption, as well as the possibility of crime encouraging fines are formally highlighted. More importantly, by running an experiment on a subject pool of students for the case of illegal waste disposal, we provide experimental evidence on the validity of our theoretical predictions. We find that increasing fine rate may become crime encouraging or at least ineffective, beyond a context-specific fine threshold. In a policy perspective, we suggest that the optimal design of a crime-deterring sanctioning system must simultaneously account for both corruption practices and anti-corruption policies. |
| Keywords: | corruption; crime; fine; waste |
| JEL: | C91 H10 K14 K42 Q50 |
| Date: | 2023–12–24 |
| URL: | http://d.repec.org/n?u=RePEc:sal:celpdp:0166&r=law |
| By: | Levai, Adam (LISER); Turati, Riccardo (Universitat Autònoma de Barcelona) |
| Abstract: | The existing literature investigating the labor market impact of immigration assumes, implicitly or explicitly, that the law or labor regulation is exogenous to immigration. To test this assumption, we build a novel workers' protection measure based on 36 labor law variables that capture labor regulation over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel setting using both internal and external instruments, we establish a new result: immigrants' norms and experience of labor regulation influence the evolution of host countries labor law regulation. This effect is particularly strong for two components of workers' protection: worker representation laws and employment forms laws. Our main results are consistent with suggestive evidence on the transmission of preferences from migrants to their offspring (vertical transmission), and from migrants to natives or local political parties (horizontal transmission). Finally, we find that the size of the immigrant population per se has a small and negligible impact on host country labor market regulation. |
| Keywords: | international migration, labor market institutions, labor regulation, legal transplants |
| JEL: | J61 K31 F22 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16929&r=law |
| By: | Luca Anderlini (Georgetown University, University of Naples Federico II and CSEF); Leonardo Felli (University of Cambridge); Michele Piccione (London School of Economics.) |
| Abstract: | How do mechanisms that enforce cooperation emerge in a society where none are available and agents are endowed with raw power, that allows a more powerful agent to expropriate a less powerful one? We study a model where expropriation is costly and agents can choose whether to engage in surplus-augmenting cooperation or engage in expropriation. While in bilateral relations, if cooperation is not overwhelmingly productive and expropriation is not too costly, the latter will prevent cooperation, when there are three or more agents, powerful ones can become enforcers of cooperation for agents ranked below them. In equilibrium they will expropriate smaller amounts from multiple weaker cooperating agents who in turn will not deviate for fear of being expropriated more heavily because of their larger expropriation proceeds. Surprisingly, the details of the power structure are irrelevant for the existence of equilibria with enforcement provided that enough agents are present and one is ranked above all others. These details are instead key to the existence of other highly noncooperative equilibria that obtain in certain cases. |
| Keywords: | Jungle, Power Structures, Enforcement, Rule of Law. |
| JEL: | C79 D00 D01 D31 K19 K40 K49 |
| Date: | 2024–03–23 |
| URL: | http://d.repec.org/n?u=RePEc:sef:csefwp:711&r=law |
| By: | Emmanuelle Auriol (TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Alice Mesnard (University of London [London]); Tiffanie Perrault (McGill University = Université McGill [Montréal, Canada]) |
| Abstract: | We model consumer choices for recreational cannabis in a risky environment and its supply under prohibition and legalization. While legalization reduces the profits of illegal providers, it increases cannabis consumption. This trade-off can be overcome by combining legalization with sanctions against the black market, and improvements to the quality of legal products. Numerical calibrations highlight how a policy mix can control the increase in cannabis consumption and throttle the illegal market. In the US, the eviction prices we predict to drive dealers out of business are much lower than the prices of legal cannabis in most of the states that opted for legalization, leaving room for the black market to flourish. Analyzing the compatibility of several policy goals sheds light on the less favorable outcomes of recent legalization reforms and suggests a new way forward. |
| Keywords: | recreational cannabis, legalization, crime, policy, regulation |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04234940&r=law |
| By: | Daniel L. Chen; Lubomir Cingl; Arnaud Philippe; Michal Soltes |
| Abstract: | We examine the perceptions and behavior of inmates, revealing insights that challenge existing theories of criminal behavior. Using comprehensive surveys, we contrast 816 Czech inmates’ perceptions of sanction risks, interpersonal and institutional trust, impulsivity, and beliefs about post-release reintegration with those of the general population. Our findings reveal that inmates perceive higher risks of sanctions but are not more accurate about these risks. They have lower trust in other inmates, lower trust in the justice system, and exhibit less impulsivity than non-inmates. We observed limited evolution of responses for individuals surveyed twice, one year apart. Impulsivity and a diminished perception of the risk of sanctions are positively associated with misbehavior among inmates in prison. These results partly support theories of procedural justice and homo oeconomicus but challenge the notion of criminal brotherhood. |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:cer:papers:wp779&r=law |
| By: | Grégroire Massé (Université Paris 1 Panthéon-Sorbonne, Centre d'Economie de la Sorbonne) |
| Abstract: | This paper questions the difficulty of quantifying French notaries’ regulatory evolutions with existing regulatory indicators. Whereas the notary profession faced a major transformation with high competitive outcomes, regulatory indicators that initiated this process did not change. Does this mean that French notaries do not belong to the European deregulation process of professional services? In this paper, we aim to consider the more general issue of assessing professional services’ regulation and question both indexes’ internal and external validity. We show that (1) regulatory indicators used to promote professional deregulation in Europe belong to a “flat world” paradigm, and that (2) they are inconsistent in assessing evolutions resulting from the European Open Method of Coordination. We process in two steps. First, we identify an “index framework” which includes regulatory indicators from different indexes-based policies. As they have common structure and aims, their methodology relies on a full-comparability paradigm, with the idea that regulatory “best practices” from different countries and professions could be implemented in any professions or countries. Moreover, this comparability perspective echoes the Open Method of Coordination, namely a policy method used in the European context of regulatory convergence. However, when we consider their applicability in the French context, we note indexes’ inability to compare professional regulations: regulatory indicators only quantify a small part of professional rules, and cannot explain some dynamic evolutions. They belong to a “flat world” paradigm, with an underlying theoretical economic model restricting the regulatory scope. We then try to define precisely this theoretical model in order to grasp its consequences on policymaking. If regulatory indicators do frame the economic assessment of regulation, we aim to make their model consistent in a general equilibrium perspective. We see that indicators’ theoretical regulatory model is a contestability model of non-regulation, which cannot justify piecemeal deregulations. This theoretical model advocates for a total deregulation in professional services, whereas the Open Method of Coordination had only promoted piecemeal deregulation policies. Beyond this external inconsistency, our conclusion is that – paradoxically – the underlying theoretical model does not apprehend law, and can only advocate for a legal revolution instead of a regulatory evolution. Therefore, we support a more law-grounded approach for regulatory quantification, and advocate for new indexes in the quantification of Open Method of Coordination’s effects |
| Keywords: | Regulation Indexes (Regulatory Indicators); Legal Services; Professional competition; Comparative law and economics |
| JEL: | J44 L51 D45 K23 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:mse:cesdoc:24004&r=law |
| By: | Arellano-Bover, Jaime (Yale University); De Simoni, Marco (Bank of Italy); Guiso, Luigi (Einaudi Institute for Economics and Finance); Macchiavello, Rocco (University of Warwick); Marchetti, Domenico J. (Bank of Italy); Prem, Mounu (Einaudi Institute for Economics and Finance) |
| Abstract: | Infiltration of the legal economy by criminal organizations (OCGs) is potentially significant, though how pervasive remains uncertain. Beyond the volume, the motives driving infiltration are of serious policy concern. We introduce a conceptual framework to differentiate between OCGs' motives for infiltrating legal firms and validate it using new data from the Italian Financial Intelligence Unit. About 2% of Italian firms appear to have links with OCGs, with three primary motives. Firms established by OCGs are predominantly used for criminal activities (functional motive). Medium-sized firms, often infiltrated post-creation, primarily reflect a competitive motive, wherein criminal activities benefit the firm. Lastly, large, well-established firms remain separate from criminal activities and are used for pecuniary and non-pecuniary returns, such as to establish political connections (pure motive). This so far unnoticed motive accounts for a substantial share of OCGs' infiltration. |
| Keywords: | organized crime, legal economy, firms, infiltration |
| JEL: | G3 L2 K4 |
| Date: | 2024–03 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16893&r=law |
| 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); Daniel Chen (Computer Science Department [Stanford] - Stanford University, CFE - CNRS-formation Entreprise - CNRS - Centre National de la Recherche Scientifique, TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, IAST - Institute for Advanced Study in Toulouse) |
| Abstract: | Using data on roughly half a million cases and 10, 000 judges from Pakistan and India, Mehmood et al. estimate the impact of the Ramadan fasting ritual on criminal sentencing decisions. They find that fasting increases judicial leniency and reduces reversals of decisions in higher courts. We estimate the impact of the Ramadan fasting ritual on criminal sentencing decisions in Pakistan and India from half a century of daily data. We use random case assignment and exogenous variation in fasting intensity during Ramadan due to the rotating Islamic calendar and the geographical latitude of the district courts to document the large effects of Ramadan fasting on decision-making. Our sample comprises roughly a half million cases and 10, 000 judges from Pakistan and India. Ritual intensity increases Muslim judges' acquittal rates, lowers their appeal and reversal rates, and does not come at the cost of increased recidivism or heightened outgroup bias. Overall, our results indicate that the Ramadan fasting ritual followed by a billion Muslims worldwide induces more lenient decisions. |
| Keywords: | religious rituals, Ramadan, decision-making, religious rituals Ramadan decision-making |
| Date: | 2023 |
| URL: | http://d.repec.org/n?u=RePEc:hal:journl:hal-04371833&r=law |
| By: | Kantorowicz, Jaroslaw; Voigt, Stefan |
| Abstract: | Federalism is a constitutionalized version of multi-tier governance. Proponents of veto-player theory argue that a high number of veto players leads to a high degree of policy stability. Compared to states with a unitary structure, federal countries, in which at least one sub-central level of government is constitutionally recognized and endowed with some degree of exclusive competences, dispose of a higher number of veto players, who can voice and challenge constitutional non-compliance by the central government. In this paper, we therefore ask whether federally constituted states also enjoy a higher degree of constitutional compliance, i.e. have governments that respect and enforce the promises made in their country's constitution. At the same time, with a higher number of governments under federalism, there are more chances that some of them will not comply with constitutional constraints leading to greater non-compliance. To test these hypotheses, we employ data from up to 162 countries and apply standard panel data estimation techniques. Contrary to expectations, our results indicate that federalism is neither positively nor negatively correlated with constitutional compliance of the respective countries. |
| Keywords: | constitutional compliance, de jure-de facto gap, federalism |
| JEL: | H11 K10 K42 P48 Z10 Z18 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:ilewps:79&r=law |
| By: | Lee, Cheuk Ling; Chong, Terence Tai Leung |
| Abstract: | This paper aims to study the effect of distance to abortion facilities on the birth rate, abortion ratio and pregnancy rate in the United States. It will further extend the effect of the change in birth statistics on child living conditions, measured by adjusted family income and the percentage of children living below the poverty line in a state. It will correspond to the amendment of the abortion law in the United States in 2022. Our results suggest that an increase in the distance to abortion facilities will reduce the birth rate, abortion ratio and pregnancy rate. However, for the living circumstances, the significant positive effect was shown only in the black children group and the general groupn when the distance increased. In the non-black children group, the effects were only marginally significant or not significant on their living conditions. The results may also imply different reasons for abortions among different races. |
| Keywords: | abortion; distance; US |
| JEL: | I14 I18 J13 K36 |
| Date: | 2024–04–06 |
| URL: | http://d.repec.org/n?u=RePEc:pra:mprapa:120640&r=law |
| By: | Kei Kawai; Jun Nakabayashi |
| Abstract: | We study the effectiveness of firms' compliance programs by conducting a field experiment in which we disclose to a subset of Japanese firms that the firm is potentially engaging in illegal bid-rigging. We find that the information that we disclose affects the bidding behavior of the treated firms: our test of bid-rigging is less able to reject the null of competition when applied to the bidding data of the treated firms after the intervention. We find evidence that this change is not the result of firms ceasing to collude, however. We find evidence suggesting that firms continue to collude even after our intervention and that the change in the bidding behavior we document is the result of active concealment of evidence by cartelizing firms. |
| JEL: | K21 L41 |
| Date: | 2024–04 |
| URL: | http://d.repec.org/n?u=RePEc:nbr:nberwo:32347&r=law |
| By: | Heckemeyer, Jost H.; Schulz, Inga; Spengel, Christoph; Winter, Sarah |
| Abstract: | This paper evaluates the Multilateral Convention to implement Pillar I Amount A, released by the OECD in October 2023, and the alternative proposal of Art. 12B for tax treaties suggested by the UN, with a particular emphasis on the perspective of developing countries. We conduct a comparative analysis of the proposals using an integrated economic and legal approach. Our assessment is based on the two proposals' ability to generate tax revenue and their implications for net-importing countries. Our legal analysis demonstrates significant differences between the two proposals in the implied reallocation of taxing rights, depending on the considered (digital) business model. Interestingly, we find that overall and despite its complexity, Pillar I Amount A addresses the specific interests of developing countries better than Art. 12B UN Model. In particular, Pillar I Amount A will likely outperform the UN's proposal in terms of its tax revenue potential. |
| Keywords: | Digital Economy, Corporate Tax, Global Tax Reform, OECD Pillar 1, Developing Countries |
| JEL: | F23 H25 H32 K34 |
| Date: | 2024 |
| URL: | http://d.repec.org/n?u=RePEc:zbw:zewdip:290402&r=law |