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on Law and Economics |
| By: | Dércio de Assis (School of Economics, University of Nottingham); Arpita Ghosh (Department of Economics, University of Exeter); Sonia Oreffice (Department of Economics, University of Exeter); Climent Quintana-Domeque (Department of Economics, University of Exeter) |
| Abstract: | Non-fatal strangulation (NFS) is a common and dangerous form of intimate partner violence (IPV) and a predictor of homicide, yet it was historically neglected by the criminal justice system. Since the year 2000, most U.S. states have enacted laws enlisting NFS as a standalone criminal offense. We compile a novel dataset on state NFS statutes and link it to the FBI Supplementary Homicide Reports from 1990 to 2019 to estimate the causal effects of these laws on intimate partner homicide rates. Using a difference-in-differences strategy, and an estimator that accounts for staggered adoption and treatment heterogeneity, we find that NFS laws led to significant reductions in intimate partner homicides (IPH). We estimate that these laws reduce female-victim IPH by 14% and male-victim IPH by 36%, among victims 18-34. No significant effects are observed for victims 50 and above or for homicides committed by strangers. Event-study estimates support the parallel trends assumption. Our findings suggest that NFS laws can effectively disrupt the escalation of IPV and reduce lethal outcomes. |
| Keywords: | intimate partner violence, non-fatal strangulation, homicide, difference-in-differences, criminal justice policy |
| JEL: | C21 I18 J1 J16 K14 K42 |
| Date: | 2025–06–27 |
| URL: | https://d.repec.org/n?u=RePEc:exe:wpaper:2501 |
| By: | Tommaso Giommoni; Luigi Guiso; Claudio Michelacci; Massimo Morelli |
| Abstract: | We develop a strategy to measure the economic costs of poorly written laws, a potential threat to the rule of law. Using the full corpus of Italian legislation, we show that legal uncertainty - measured by the probability of disagreement between the Supreme Court of Cassation and lower courts - is higher for cases involving poorly written laws and varies systematically across courts. To identify the economic impacts, we exploit a reform that reassigned firms to courts. We estimate that GDP would be 5 percent higher if laws had been written as clearly as the Constitution, with two-thirds of the loss accruing over the past 20 years. |
| JEL: | A10 E0 K00 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11929 |
| By: | Saïd Souam; Mohamed Mehdi Aït-Hamlat |
| Abstract: | This article investigates the multifaceted interplay between crime and terrorism through a game-theoretic framework encompassing three key actors: a Government, a Terrorist Group, and a Population. By modeling how each player allocates resources between terrorism, criminal activities, counterterrorism, and anti-crime efforts, we explain the strategic dependencies that shape policy and group behavior. A distinctive aspect of our analysis is the population’s capacity to support the government’s action, effectively substituting for part of the state’s counterterrorism resources under certain conditions. We show that a terrorist group faced with profitable criminal opportunities may shift efforts away from terrorist violence, although this redirection depends critically on the government’s resource allocation and the population’s perceived threat. Comparative statics illustrate how changes in parameters such as costs of crime or terrorism, public attitudes toward violence, and government budgets influence equilibrium outcomes. We show that increased government attention to one threat (terrorism or crime) can inadvertently strengthen the other, underscoring the importance of balanced policy measures. Our findings shed new light on the symbiotic relationship between terrorist and criminal activities, providing insights into how coordinated policy interventions, spanning law enforcement, socio-economic development, and public outreach could more effectively disrupt the crime-terror nexus. |
| Keywords: | Terrorism, organized crime, crime-terror nexus, public policies, game theory |
| JEL: | D74 K42 H56 K14 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:drm:wpaper:2025-33 |
| By: | Victoria Biagi; Alexander Cardazzi; Zachary Porreca |
| Abstract: | Violence is often viewed as an intrinsic feature of illicit markets, driven by competition, disputes, and predation. We argue that the connection between violence and markets is not exclusive to illicit markets and that in the absence of strong institutions these factors exist ubiquitously. Using an estimator of spatial concentration, we document the empirical relationship between violence and markets in the 14th century. We then employ a large language model to analyze the coroner’s accounts of the era’s homicides, finding that many of these incidents were driven by avoidable escalations of business-related disputes. Employing a novel difference-in-differences estimator for spatial concentration, we proceed to causally identify the impacts of the introduction of London’s first professional police force in the 19th century on this concentration. We find that the police force’s introduction led to a 54% reduction in the degree of concentration of violence around marketplaces. Our findings suggest that it is not the nature of the commodities being sold in illicit markets that drives violence, but is rather the absence of formal institutions of enforcement and dispute resolution |
| Keywords: | marketplace violence, medieval violence; spatial concentration; local large language model |
| JEL: | K42 N93 R12 C21 K40 N90 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:baf:cbafwp:cbafwp25239 |
| By: | Roberta De Luca (Bank of Italy); Rosalia Greco (Bank of Italy and Bocconi Baffi Center.); Giovanni Immordino (University of Naples Federico II and CSEF; University of Naples Federico II, CSEF, Mofir and Cefes) |
| Abstract: | We examine how government-mandated Covid-19 business closures impacted on the ownership structure of Italian private companies and investigate the mechanisms whereby the mafia infiltrates the legal economy during crises. Using a novel dataset tracking monthly shareholder changes, we show that an increase in the days of closure reduced the number of firms undergoing ownership changes, although significantly less so in provinces with strong mafia presence. This is especially true in the sectors that are historically prone to mafia infiltration and those more severely affected by the Covid-19 liquidity crisis, and in micro-firms, which tend to be more financially vulnerable. |
| Keywords: | Mafia Infiltration, Covid-19, Firm ownership |
| JEL: | D22 G32 K42 |
| Date: | 2025–04–15 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:750 |
| By: | Serena Fatica (European Commission - Joint Research Centre and Mofir.); Tommaso Oliviero (Università di Napoli Federico II, CSEF, Mofir and Cefes); Michela Rancan (University of Milan) |
| Abstract: | Using a large sample of European enterprises, we document that companies’ default probability is significantly larger when they experience negative end-of- the year equity (zombie status) in the year prior to default. Zombie firms are more likely to default in the short run in countries with more efficient judicial insolvency procedures. To establish a causal link between judicial efficiency and the default probability of zombie firms, we exploit a reform of the court districts in Italy that generates exogenous variation in trial lengths. This country-level analysis corroborates the findings of a cleansing effect of judicial efficiency that limits the persistence of zombie firms in the economy. |
| Keywords: | default; zombie firms; SMEs; EU-27; judicial efficiency. |
| JEL: | G33 K22 L25 O52 |
| Date: | 2025–03–15 |
| URL: | https://d.repec.org/n?u=RePEc:sef:csefwp:747 |
| By: | Matthew Collin (EU Tax Observatory, Paris School of Economics, NMBU); Florian M. Hollenbach (Copenhagen Business School); David Szakonyi (George Washington University) |
| Abstract: | This paper studies the impact of beneficial ownership transparency in the British real estate market. In an effort to reduce illicit investment following the invasion of Ukraine, the UK government announced a new law in 2022 requiring offshore companies that owned domestic real estate to identify their ultimate owners in a public register. Using a difference-in-difference framework, we find that new property purchases by companies registered in tax havens fell relative to those made via non-havens, a result consistent with transparency raising the costs of illicit investment. These declines persist even after dropping tax havens favored by Russians, suggesting that the reform drove the decline, rather than sanctions. We do not find strong evidence of price effects nor substitution into ownership through suspicious domestic companies. While the policy does appear to have been effective at deterring some anonymous investment into the British property market, incomplete implementation led some clients to still successfully shield their ownership information, implying scope for better design and enforcement in the future. |
| Keywords: | Illicit financial flows, tax havens, real estate, transparency, hidden wealth |
| JEL: | D73 F21 K42 R30 |
| Date: | 2025–03 |
| URL: | https://d.repec.org/n?u=RePEc:dbp:wpaper:028 |
| By: | Yann Lecorps (Université Paris Panthéon Assas, CRED, Paris, France); Khaoula Naili (Université Marie et Louis Pasteur, CRESE (UR 3190), F-25000 Besançon, France); Marie Obidzinski (Université Paris Panthéon Assas, CRED, Paris, France); Yves Oytana (Université Marie et Louis Pasteur, CRESE (UR 3190), F-25000 Besançon, France); Téa Toutounji (Université Paris Panthéon Assas, CRED, Paris, France) |
| Abstract: | We examine the use of digital evidence in cases handled by the International Criminal Court (ICC) at different stages of the proceedings, both theoretically and empirically, and how the parties use it. Our theoretical findings indicate that the extent to which digital evidence is used versus classical evidence may increase or decrease with the stringency of the standard of proof. This variation depends on the cost of gathering evidence and the degree of complementarity between digital and classical evidence. Our main empirical findings are as follows: i) the intensity of references to classical evidence increases more than that of references to digital evidence between the pretrial and trial phases; ii) the prosecution appears to rely more on digital evidence than the defense; iii) there is a positive correlation between the emotional tone of the prosecution and the defense, but no correlation between their emotional tone and the reference to either types of evidence. |
| Keywords: | K4 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:afd:wpaper:2505 |
| By: | Benjamin S. Kay; Marco Migueis |
| Abstract: | Ex-ante cost-benefit analyses and other impact assessments are now a standard part of the rulemaking process. Yet some important effects of regulation are difficult—or impossible—to assess before a rule takes effect. In such cases, ex-post (or retrospective) evaluation, conducted after a rule is in effect, offers an opportunity to measure real-world outcomes that could not reliably be predicted in advance. |
| Date: | 2025–06–26 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgfn:2025-06-26-1 |
| By: | McLaughlin, Eoin; Moro, Mirko; de Vries, Frans P. |
| Abstract: | The regulatory shift by competition and antitrust authorities, allowing limited industry collusion in sustainability-related investments to align markets with broader environmental and social objectives, suggests a re-evaluation of competition as a mechanism for promoting collective welfare. Drawing on Adam Smith's classical works as presented in The Wealth of Nations and The Theory of Moral Sentiments, this paper explores this issue through a historical lens while at the same time showing how this innately connects to the established literature on sustainable development, in particular justice and inclusive wealth. Combined, we discuss the role of modern competition policy in adjudicating and evaluating trade-offs in societies' overall welfare function that comprises negative externalities and natural capital. |
| Keywords: | Wealth of Nations, Justice, Investment collusion, Antitrust, Sustainable development |
| JEL: | B21 D63 K21 L41 Q01 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:hwuaef:320415 |
| By: | Eva Davoine; Joseph Enguehard; Igor Kolesnikov |
| Abstract: | We examine the political costs of taxation in early modern France. We focus on efforts to enforce the salt tax, the rate of which varied across regions. Using a spatial difference-in-discontinuities design, we compare municipalities just inside the high-tax region with those just outside, before and after a reform aimed at curbing illicit salt smuggling. We find that tax enforcement led to a twenty-fold increase in conflicts between taxpayers and the state in municipalities in the high-tax region. This effect persists until the French Revolution, supporting the view that enforcing the salt tax incurred significant political costs. Finally, we document that the likelihood of conflict increases with tax differences between neighboring regions, which we use to derive an upper bound on the political costs of increased tax enforcement in this historical period. |
| Keywords: | taxation, protest, conflict |
| JEL: | D74 H26 H39 K42 N43 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_11945 |
| By: | Marie Obidzinski (Université Paris Panthéon Assas, CRED UR 7321, 75005 Paris, France); Yves Oytana (Université Marie et Louis Pasteur, CRESE UR3190, F-25000 Besançon, France) |
| Abstract: | We study the design of optimal liability sharing rules when the use of an AI prediction by a human user may cause external damage. To do so, we set up a game-theoretic model in which an AI manufacturer chooses the level of accuracy with which an AI is developed (which increases the reliability of its prediction) and the price at which it is distributed. The user then decides whether to buy the AI. The AI’s prediction gives a signal about the state of the world, while the user chooses her effort to discover the payoffs in each possible state of the world. The user may be susceptible to an automation bias that leads her to overestimate the algorithm’s accuracy (overestimation bias). In the absence of an automation bias, we find that full user liability is optimal. However, when the user is prone to an overestimation bias, increasing the share of liability borne by the AI manufacturer can be beneficial for two reasons. First, it reduces the rent that the AI manufacturer can extract by exploiting the user’s overestimation bias by underinvesting or overinvesting in the AI accuracy. Second, due to the nature of the interaction between algorithm accuracy and the user effort, the user may be incentivized to increase her (too low) judgment effort. |
| Keywords: | liability sharing, advisory algorithm, automation bias, prediction, judgment effort |
| JEL: | K13 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:crb:wpaper:2025-08 |
| By: | Michaela Kreyenfeld; Sarah Schmauk; Katharina Wrohlich; Daniel Brüggmann |
| Abstract: | This paper examines the gendered impact of divorce on earnings and the role of the social policy context in shaping this relationship. In particular, it focuses on a policy reform enacted in Germany in 2008 that overturned previous ex-spousal support rules. Data come from the administrative records of the German Public Pension Fund. Drawing on a fixed- effects model, we study the behaviour of women and men who separated between 2004 and 2011 (n=21, 617 divorces). We find that women's earnings increased throughout the divorce process. This effect was slightly more pronounced after the reform than before. In contrast to women's earnings, men's earnings declined throughout the divorce process. The reform seems to have somewhat mitigated this negative divorce effect. The paper also shows heterogeneous effects across regions. While divorce had strong effects on women's and men's earnings in West Germany, it did not change the earning patterns of East German men and women either before or after the reform. The paper concludes by discussing avenues for post- separation policies from a gender perspective. |
| Keywords: | Divorce, earnings, employment, gender, policy reform |
| JEL: | J12 J22 K36 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:diw:diwwpp:dp2125 |
| By: | Benjamin Monnery (EconomiX, CNRS, Université Paris Nanterre) |
| Abstract: | Alors que la population carcérale a atteint un nouveau record historique à 74 513 détenus début juillet 2023, un rapport parlementaire des députées Abadie et Faucillon propose l’introduction progressive jusqu’en 2027 d’un mécanisme de régulation carcérale. Longtemps taboue, l’idée de réguler les flux de personnes détenues pour réduire la surpopulation s’impose de plus en plus comme une nécessité tant le statu quo devient intenable dans nos maisons d’arrêt. Tandis que de nombreux outils promus par le ministère de la Justice ont échoué à résoudre le problème, cet article discute des principaux enjeux de la mise en place rapide d’un mécanisme contraignant de régulation carcérale, pour enfin lutter efficacement contre la surpopulation et prévenir au mieux la récidive. |
| Keywords: | surpopulation carcérale, prison, justice pénale relationships |
| JEL: | K42 |
| Date: | 2025–04 |
| URL: | https://d.repec.org/n?u=RePEc:afd:wpaper:2504 |