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on Law and Economics |
| By: | Dhammika Dharmapala; Aziz Huq |
| Abstract: | U.S. law requires the Attorney General to collect data on hate crime victimization from states and municipalities, but states and localities are under no obligation to cooperate by gathering or sharing information. Data production hence varies considerably across jurisdictions. This paper addresses the ensuing “missing data” problem by imputing unreported hate crimes using Google search rates for a racial epithet. As a benchmark of accurate hate crime data, it uses two alternative definitions of which jurisdictions more effectively collect hate crime data: all states that were not part of the erstwhile Confederacy, and those states with statutory provisions relating to hate crime reporting. We regress rates of racially-motivated hate crimes with African-American victims on Google searches and other relevant variables over 2004-2015 at the state-year level for each group of benchmark states. Adding the Google search rate for the epithet substantially enhances the capacity of such models to predict hate crime rates among benchmark states. We use the results of these regressions to impute hate crime rates, out-of-sample, to non-benchmark jurisdictions that do not robustly report hate crimes. The results imply a substantial number of unreported hate crimes, concentrated in particular jurisdictions. It also illustrates how internet search rates can be a source of data on attitudes that are otherwise hard to measure. |
| Keywords: | hate crimes, victimization, internet search, crime reporting |
| JEL: | K42 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11245 |
| By: | Imelda (Geneva Graduate Institute and CEPR); Xiaoying Guo (Geneva Graduate Institute) |
| Abstract: | In many developing and emerging economies, frequent power outages are often a consequence of electricity rationing, stemming from the insufficient generation capacity to meet peak demand. In an effort to minimize the disruption caused by sudden power outages, utilities often implement scheduled outages to allow consumers to prepare. However, these planned outages may inadvertently influence criminal behavior and planning. This study investigates the causal relationship between planned electricity outages and crime rates, leveraging a geographic discontinuity in outage duration due to differences in electricity suppliers within the City of Cape Town, South Africa. We compare crime trends in areas served by the municipal grid, which benefits from pumped hydro storage to mitigate outages, with those served by the national grid, where outages are more severe. We find that 10 hours per month more outages lead to an increase of 2.6 percent or eight more crime incidents. The analysis reveals that while overall crime rates are affected, specific types of crime, such as robbery, theft, and violent crime, are particularly sensitive to power outages. Outages caused by electricity rationing create opportunities for certain types of criminal activity, particularly at night. The larger the share of areas affected by severe load shedding, the higher the incidence of crime. Conversely, crimes less related to load shedding, such as commercial and drug-related offenses, are not affected by these outages.This research contributes to the growing body of evidence on the socioeconomic consequences of power outages and highlights the importance of reliable electricity access for public safety and development. |
| Keywords: | outages; developing countries; crime; law enforcement |
| JEL: | O18 O17 K42 |
| Date: | 2024–08–23 |
| URL: | https://d.repec.org/n?u=RePEc:gii:giihei:heidwp18-2024 |
| By: | Anderlini, Luca; Felli, Leonardo; Piccione, Michele |
| Abstract: | How do mechanisms that enforce cooperation emerge in a society where none are available and agents are endowed with just 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 are obtained in certain cases. |
| Keywords: | Jungle, power structures, enforcement, rule of law |
| JEL: | C79 D00 D01 D31 K19 K40 K49 |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:wzbmbh:301156 |
| By: | W. Bentley MacLeod; Roman Rivera |
| Abstract: | Theories of crime in economics focus on the roles of deterrence and incapacitation in reducing criminal activity. In addition to deterrence, a growing body of empirical evidence has shown that both income support and employment subsidies can play a role in crime reduction. This paper extends the Becker-Ehrlich model to a standard labor supply model that includes the notion of a consumption need (Barzel and McDonald (1973)) highlights the role of substitution vs income effects when an individual chooses to engage in crime. Second, we show that whether the production of criminal activity is a substitute or a complement with the production of legitimate activity is central to the design of optimal policy. We find that both individual responsiveness to deterrence and optimal policy vary considerably with context, which is consistent with the large variation in the effect of deterrence on crime. Hence, optimal policy is a combination of deterrence, work subsidies and direct income transfers to the individual that vary with both income and location. |
| JEL: | D6 H20 J20 K14 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32805 |
| By: | Pettersson, Nicklas (Örebro University School of Business); Kelemen, Katalin (Örebro University, School of Behavioural, Social and Legal Sciences) |
| Abstract: | We present a systematic quantitative approach how to analyze the reasons that judges in Nordic countries publicly adduce for their decisions in constitutional matters, as implemented in the Nordic CONREASONProject. Based on encodings of forty (per court) purposively selected landmark cases, common traits and patterns of constitutional argumentative practices in each of the Nordic supreme courts were identi ed and an international comparison were made to courts from related studies. Our results provided strong support that, regarding speci c aspects (on a univariate level), one or more courts typically tended to deviate from the other Nordic courts. Also, in a multivariate worldwide comparison there were variation between the Nordic supreme courts. However, although not detached from other supreme courts, the Nordic supreme courts seemed to occupy an area of their own on the international map of constitutional reasoning. |
| Keywords: | constitutional reasoning; quantitative comparative law; empirical legal studies; Nordic exceptionalism; realist decision-making |
| JEL: | C10 C38 C53 K10 K40 N40 |
| Date: | 2024–08–14 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:oruesi:2024_007 |
| By: | Marín Llanes, Lucas (Universidad de los Andes); Fernández Sierra, Manuel (Universidad de los Andes); Vélez Lesmes, María Alejandra (Universidad de los Andes); Martínez González, Eduard (Superintendencia de Economía Solidaria); Murillo Sandoval, Paulo (Universidad del Tolima) |
| Abstract: | This study investigates the socio-economic effects of Colombia’s recent coca cultivation boom, exploiting municipal variations in production incentives following the 2014 announcement of the coca crop substitution program. Using a difference-in-differences strategy with satellite-derived night-time light data as a proxy for economic activity, we find that a one standard deviation increase in coca crops resulted in a 2.5% to 3.1% increase in municipality-level GDP. We also estimate local GDP multipliers, showing that each additional dollar from coca leaf and coca base sales raises GDP by $1.17 to $2.30 and $0.86 to $1.63, respectively. Although the coca boom did not significantly affect local fiscal revenues, violence indicators, or land used for agricultural production, it had substantial environmental impacts, with deforestation rates increasing by 104% and a 302% rise in land conversion from coca cultivation to cattle pastures in the Colombian Amazon. Our findings underscore the significance of illicit economies in providing short-term economic gains and acting as catalysts for economic activity. |
| Keywords: | Illicit Economies; Economic growth; Coca Cultivation; Deforestation; Colombia |
| JEL: | K42 O13 O17 Q34 Q56 |
| Date: | 2024–08–20 |
| URL: | https://d.repec.org/n?u=RePEc:col:000089:021186 |
| By: | Jeroen Hinloopen; Stephen Martin; Leonard Treuren |
| Abstract: | Antitrust laws prohibit collusion by private firms, yet many types of interfirm coopera tion are legal. Using laboratory experiments, we study spillovers from legal cooperation in one market to tacit collusion in a different market. Subjects sequentially play two homogeneous goods Bertrand games once against the same opponent. We vary whether subjects can form binding price agreements in the first market. We find that allowing subjects to coordinate their prices in the first market significantly increases prices in the second market, elevating the incidence of non-competitive market prices by more than 60 percent. This shows that repeated interaction and communication are not necessary to achieve non-competitive prices, as long as subjects can form binding agreements in a different market. Additional treatments suggest that commitment and multimarket contact are both necessary and sufficient for spillovers from legal cooperation to tacit collusion to emerge. |
| Date: | 2023–06 |
| URL: | https://d.repec.org/n?u=RePEc:ete:msiper:746847 |
| By: | Aneta Napieralska; Przemys{\l}aw K\k{e}pczy\'nski |
| Abstract: | In the digital era, where innovative technologies like blockchain are revolutionizing traditional organizational paradigms, Decentralized Autonomous Organizations (DAOs) emerge as avant-garde models of collective governance. However, their unique structure challenges existing legal frameworks, especially concerning the liability of participants. This study focuses on analyzing the legal implications of the decentralized nature of DAOs, with a particular emphasis on the aspects of participant liability. Such considerations are essential for understanding how current legal systems might be adapted or reformed to effectively address these novel challenges. The paper examines the specificity of DAOs, highlighting their decentralized governance structure and reliance on smart contracts, which introduce unique issues related to the blurring of liability boundaries. It underscores how the anonymity of DAO participants and the automatic execution of smart contracts complicate the traditional concept of legal liability, both within the DAO context and in interactions with external parties. The analysis also includes a comparison between DAOs and traditional organizational forms, such as corporations and associations, to identify potential analogies and differences in participant liability. It explores how existing regulations on partner liability might be insufficient or inapplicable in the DAO context, prompting the search for new, innovative legal solutions. |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2408.04717 |
| By: | Douglas Cumming; Randall Morck; Zhao Rong; Minjie Zhang |
| Abstract: | Because corporate limited liability protects founder’s personal assets, creditors often require founders of new, small and risky firms to contract around limited liability by pledging their personal assets as collateral for loans to their firms. This makes personal bankruptcy law (PBL) relevant to corporate finance. We find that pro-debtor PBL reforms increase the number of patents filed, citations to those patents, and début patents by firms with no previous patents. These reforms also redistribute innovation across industries in closer alignment to its distribution in the U.S., which we take to approximate industry innovative potential. These effects are driven by firms without histories of high-intensity patenting, and are damped in countries that impose minimum capital requirements on new firms. Firms with largescale legacy technology may avoid radical innovations that devalue that technology. Consequently, new, initially small and risky firms often develop the disruptive innovations that contribute most to economic growth. Consistent with this, we also find pro-debtor PBL reforms increasing value-added growth rates across all industries, and by larger margins in industries with more innovation potential. Our difference-in-differences regressions use patents and PBL reforms for 33 countries from 1990 to 2002, with subsequent years used to measure citations to patents in this period. |
| JEL: | G33 G5 K35 O3 O4 P1 P50 |
| Date: | 2024–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:32826 |
| By: | Yannick Gabuthy (BETA - Bureau d'Économie Théorique et Appliquée - AgroParisTech - UNISTRA - Université de Strasbourg - Université de Haute-Alsace (UHA) - Université de Haute-Alsace (UHA) Mulhouse - Colmar - UL - Université de Lorraine - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement); Nicolas Jacquemet (PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique); Olivier L’haridon (CREM - Centre de recherche en économie et management - UNICAEN - Université de Caen Normandie - NU - Normandie Université - UR - Université de Rennes - CNRS - Centre National de la Recherche Scientifique, IUF - Institut universitaire de France - M.E.N.E.S.R. - Ministère de l'Education nationale, de l’Enseignement supérieur et de la Recherche) |
| Abstract: | Law and economics primarily focus on various legal rules' capacity to rectify structural inefficiencies stemming from market failures, such as those related to preventive or criminal behaviors. Recent advancements in behavioral economics provide valuable insights into how economic agents respond to the rules they face, offering new perspectives for designing a range of legal rules and procedures. This article provides an overview of these developments as they apply to civil liability regimes, the design of criminal procedure, and criminal policy. |
| Abstract: | Longtemps confinée à l'efficacité de la protection des droits de propriété nécessaires aux échanges de marché, l'analyse économique du droit trouve en grande partie ses origines dans la nécessité de pallier les défaillances de marché associées à la remise en cause des conditions qui rendent leur fonctionnement efficace. Cette branche de l'économie s'intéresse en particulier à la capacité de différentes règles juridiques à corriger les inefficacités structurelles qui en découlent, par exemple en matière de comportements de prévention des risques liés aux activités humaines ou encore de comportements délictuels. Les développements récents de l'économie comportementale apportent un éclairage nouveau sur la réponse des acteurs de l'économie aux règles qui leur sont appliquées, et conduisent en particulier à un renouvellement profond des recommandations de l'économie en matière d'élaboration des règles de droit. Cet article en présente un panorama, appliqué notamment aux régimes de responsabilité civile et aux modalités d'application de la politique pénale. |
| Date: | 2024–01–01 |
| URL: | https://d.repec.org/n?u=RePEc:hal:cesptp:hal-04673346 |