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on Law and Economics |
| By: | Hamdani, Asaf; Kastiel, Kobi |
| Abstract: | Delaware is widely regarded as the global capital of corporate law and the leader in attracting incorporations. Its dominance is often attributed by legal scholars to its expert judiciary and reliance on judicial decision-making to develop corporate norms. Until recently, the prevailing view has been that legislation plays a minimal role in shaping corporate law. This Article examines the interplay between the courts and legislation in Delaware over nearly six decades. We analyze amendments to the Delaware General Corporation Law (DGCL) from 1967 to 2025 and uncover a consistent pattern of legislative responses to judicial decisions. These responses, we argue, address critical challenges inherent in Delaware's reliance on judge-made law, including the tension between norm-setting and insulating corporate insiders from out-of-pocket liability, the limitations of fiduciary-based adjudication, and other institutional constraints of the judiciary. The interplay between courts and legislation also allows Delaware to adapt to stakeholder pressures and mitigate the risk of federal intervention or other threats to Delaware's dominance. However, too frequent or openly contentious legislative overrides could undermine Delaware's dominance by threatening judicial independence and raising concerns about the effect of interest groups on Delaware's corporate law. Uncovering the pattern of legislative responses raises new questions about the forces shaping Delaware's corporate law and the underlying interaction between its judiciary and legislative branches. This Article explores some of these questions and considers implications for future research. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:cbscwp:324652 |
| By: | Felipe M. Gonçalves; Steven Mello; Emily K. Weisburst |
| Abstract: | We study racial disparities in police use of force. A pervasive issue in studies of policing is that the available data are selected by the police. As a result, disparities computed in the observed sample may be biased if selection into the data differs by race. We develop a framework and econometric strategy for correcting this bias, using variation across officers in enforcement intensity to identify the racial composition of the unobserved population at risk of selection. Using detailed administrative data on arrests and force incidents from Chicago and Seattle, we find that Black civilians comprise 56 percent of arrestees but about 49 percent of potential arrestees. Correcting for sample selection doubles our measure of the racial disparity in force rates. Decompositions of the corrected force disparity reveal that about 70 percent is unexplained by other demographic and incident characteristics, suggesting an important role for officer discrimination. Our selection bias estimates meaningfully impact the conclusions drawn in the existing literature. |
| JEL: | C10 J15 K42 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34175 |
| By: | Meier, Armando N. (University of Basel); Levav, Jonathan (Stanford University); Meier, Stephan (Columbia University); Avnaim, Liora G. (Hebrew University, Jerusalem) |
| Abstract: | Does early release decrease or increase the probability that ex-convicts will return to prison? We exploit unique data from Israeli courts, where appearance before the judge throughout the day has an arbitrary component. We first show that judges more often deny parole requests of prisoners appearing further from the judges' last break. We then use this arbitrary variation in early releases and find that early releases reduce the propensity of prisoners to return to prison. Robustness checks suggest that later and earlier cases are largely comparable and that potential selection is unlikely to explain the results. |
| Keywords: | sentence length, early release, recidivism, parole, judges |
| JEL: | D9 K14 K40 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18076 |
| By: | Johannes Kruse (Max Planck Institute for Research on Collective Goods, Bonn); Christoph Engel (Max Planck Institute for Research on Collective Goods, Bonn) |
| Abstract: | In many jurisdictions, academia is at the service of legal practice. Law professors write commentaries that summarize the state of the art of doctrine, chiefly of jurisprudence. In the spirit of a proof of concept, using the guarantee of freedom of assembly in the European Convention on Human Rights, we show that this task can be completely outsourced to large language models. Using standard NLP metrics and an LLM as a judge approach, we develop an evaluation pipeline that works without costly human annotation. The commentaries fully written by GPT 4o, Gemini 2.5 flash or Kimi K2 Instruct are on par with their best human written competitor, the Guide provided by the Court itself. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:mpg:wpaper:2025_14 |
| By: | Rafael Prieto-Curiel; Dieter Grass; Stefan Wrzaczek; Gian Maria Campedelli; Gernot Tragler; Gustav Feichtinger |
| Abstract: | Organised crime in Mexico threatens societal stability and public safety, driving pervasive violence and economic disruption. Despite security investments and social programs designed in part to reduce involvement in crime, cartel power and violence continue to persist. This study evaluates existing policies and introduces a novel framework using optimal control theory to analyse cartel dynamics. Specifically, by modelling resource allocation between security measures and social programs, we identify optimal strategies to mitigate the impacts of cartels. Findings reveal that Mexico's largest cartel imposes an annual economic burden exceeding \text{US\$ } 19 billion, 2.5 times the government's investment in science and technology. We further demonstrate that current budget allocations between social and security programs are nearly optimal yet insufficient to reduce cartel violence significantly. In light of these findings, we demonstrate that achieving meaningful harm reduction would require a significantly larger budget and would take over a decade, even with increased funding. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.06509 |
| By: | Rasmus Ingemann Tuffveson Jensen; Sebastian Holmby Hansen; Kalle Johannes Rose |
| Abstract: | Almost all countries in the world require banks to report suspicious transactions to national authorities. The reports are known as suspicious transaction or activity reports (we use the former term) and are intended to help authorities detect and prosecute money laundering. In this paper, we investigate the relationship between suspicious transaction reports and convictions for money laundering in the European Union. We use publicly available data from Europol, the World Bank, the International Monetary Fund, and the European Sourcebook of Crime and Criminal Justice Statistics. To analyze the data, we employ a log-transformation and fit pooled (i.e., ordinary least squares) and fixed effects regression models. The fixed effects models, in particular, allow us to control for unobserved country-specific confounders (e.g., different laws regarding when and how reports should be filed). Initial results indicate that the number of suspicious transaction reports and convictions for money laundering in a country follow a sub-linear power law. Thus, while more reports may lead to more convictions, their marginal effect decreases with their amount. The relationship is robust to control variables such as the size of shadow economies and police forces. However, when we include time as a control, the relationship disappears in the fixed effects models. This suggests that the relationship is spurious rather than causal, driven by cross-country differences and a common time trend. In turn, a country cannot, ceteris paribus and with statistical confidence, expect that an increase in suspicious transaction reports will drive an increase in convictions. Our results have important implications for international anti-money laundering efforts and policies. (...) |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.18932 |
| By: | Shijun You; Wei Fu; Shin-Yi Chou |
| Abstract: | The Drug-Free Communities (DFC) Support Program aims to reduce youth substance use by fostering multi-sector collaboration and implementing locally tailored strategies within the community. This study is among the first to evaluate the program’s impact on youth development outcomes in the United States. Using the Callaway and Sant’Anna (2021) difference-in-differences (CSDID) estimator, we find that the DFC program significantly reduces drug-related juvenile crime and improves academic performance. The effects are particularly pronounced in communities where coalitions include government agencies, highlighting the critical role of institutional coordination in mobilizing local resources. We also explore behavioral mechanisms, documenting reductions in marijuana use and opioid-related inpatient hospitalizations. A cost-benefit analysis indicates substantial welfare gains, suggesting that early-life prevention represents a cost-effective investment in public health. |
| JEL: | I12 I18 I20 I31 J13 K42 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34182 |
| By: | Freeman, Daniel J. |
| Abstract: | Objective. Prior research on gun ownership and violent crime has yielded inconsistent conclusions, largely because nearly all studies rely on proxy measures of prevalence - surveys, state-level aggregates, or policy classifications - that cannot isolate handgun ownership, cannot confirm lawful versus illicit possession, and are vulnerable to confounding. For example, Kleck (1997) and Cook & Ludwig (2006) highlighted measurement error as the main barrier to inference, Siegel et al. (2014) reported positive associations using household survey proxies, and Donohue et al. (2019) found liberalized right-to-carry regimes associated with higher violent crime, but with treatment defined as legal regime type rather than actual prevalence. As the National Research Council concluded in its landmark 2004 review, available studies were too compromised by proxy limitations and unmeasured confounders to provide reliable evidence of causal effects. Design. This study is the first to eliminate that uncertainty by restricting analysis to U.S. jurisdictions that publish auditable, administrative counts of active resident handgun licenses. We constructed two cohorts: A (higher licensing prevalence, mean ≈ 10.7% of residents) and B (lower prevalence, ≤1.6%). We then compared two-year (2023-2024) totals for homicide, rape, robbery, and aggravated assault per 100, 000 residents, with covariates for poverty (%), sworn law-enforcement staffing (LEO per 100, 000) and population density. We estimated cohort means and rate ratios, Pearson correlations with Fisher-z intervals, OLS slopes of violent rate on licensing share, and Poisson GLMs with log(population) offsets to report percent change per +1-percentage point increase in licensed share. Results. Mean violent crime was ≈ 542 per 100, 000 in Cohort A versus ≈ 1, 238 per 100, 000 in Cohort B (rate ratio ≈ 2.28, 95% CI 1.52-3.43). Each +1-percentage point increase in licensing share corresponded to ≈ 7.6% lower violent incidence (IRR 0.924; 95% CI 0.890-0.958), or ≈ 60-70 fewer incidents per 100, 000 depending on model specification. Adjusting for poverty or LEO staffing attenuated but did not eliminate the association. Population density was negatively correlated. Sensitivity analyses excluding outliers (Flint, MI and Washington, DC) yielded consistent results. Conclusions. This study is the first to demonstrate, using clean administrative licensing exposure measures, that higher lawful handgun ownership prevalence is strongly and inversely associated with personal violent crime. The association is robust across models and covariates, survives outlier tests, and directly addresses the measurement weaknesses that have limited prior scholarship. Unlike advocacy-sponsored work, this study is independent, fully transparent, and reproducible, providing the strongest evidence to date that lawful handgun prevalence aligns with substantially lower violent crime rates. We emphasize correlation rather than causation, highlight demographic, lifestyle and illicit-market limitations, and provide a reproducibility appendix with administrative URLs to support independent audit. |
| Date: | 2025–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:osf:socarx:65x4s_v1 |
| By: | Boije, Robert (SBAB); Stenvall, David (Linköpings University); Wilhelmsson, Mats (Department of Real Estate and Construction Management, Royal Institute of Technology) |
| Abstract: | Explosions have become an alarming feature of gang-related crime in Sweden, but their specific impact on urban housing markets remains underexplored. The study provides the first systematic analysis of explosions and housing prices in the international and Swedish research literature. We examine the impact of explosions on residential property prices in Stockholm. Using a dataset of over 124, 000 housing transactions and 147 explosions between 2021 and 2024, we apply a hedonic difference-in-difference model, enhanced with propensity score matching and geographically weighted regression. We find that property prices within 500 meters of an explosion decline by 2–9%, with stronger effects in areas hit by multiple incidents and in more affluent districts. Price responses vary both spatially and over time, and the impact tends to be more persistent in neighbourhoods with repeated exposure. These effects appear driven by media coverage, perceived safety, and localised stigma. Our findings reveal how episodic violence can shape urban inequality and highlight the need for targeted housing and safety policies. |
| Keywords: | Explosions; Housing Prices; Hedonic Price Model; Difference-in-Difference; Propensity Score Matching; Stockholm; Sweden |
| JEL: | C21 K42 R31 |
| Date: | 2025–08–25 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:kthrec:2025_008 |
| By: | Daniel Dyck (first name last name) (Paderborn University); Johannes Lorenz (first name last name of second author) (University of Regensburg (workplace of second author)); Caren Sureth-Sloane (first name last name of third author) (Paderborn University (workplace of third author)) |
| Abstract: | This study introduces sloppiness---the inaccurate preparation of supporting information during tax disputes---as a neglected but critical factor influencing taxpayer noncompliance. We conceptualize sloppiness as arising both from imperfections in the internal information environment, exacerbated by structural uncertainty over litigation outcomes (factual dimension), and from strategic aversion to compliance effort (strategic dimension). We examine whether and to what extent improved documentation and engaging an internal monitoring expert can mitigate sloppiness and prevent litigation. Using a game-theoretic model, we derive equilibrium strategies for a tax manager's compliance effort, a monitoring expert's dispute resolution effort, and a tax authority's litigation decision. Absent a monitoring expert, we find that improved documentation consistently reduces the litigation probability. However, when a monitoring expert is present, we surprisingly find that improved documentation crowds out compliance effort and can increase the litigation probability. Overall, our results suggest that sloppiness can be overcome either through strong documentation alone or by engaging a monitoring expert when documentation is weak, with the latter approach becoming more attractive as the dispute resolution costs decline.(abstract of the paper) |
| Keywords: | sloppiness, tax dispute, monitoring experts, litigation (keywords) |
| JEL: | H25 H26 C72 K34 |
| URL: | https://d.repec.org/n?u=RePEc:pdn:dispap:155 |
| By: | Anne M. Burton; David N. Wasser |
| Abstract: | Ban-the-Box (BTB) policies intend to help formerly incarcerated individuals find employment by delaying when employers can ask about criminal records. We revisit the finding in Doleac and Hansen (2020) that BTB causes statistical discrimination against minority men. We correct miscoded BTB laws and show that estimates from the Current Population Survey (CPS) remain quantitatively similar, while those from the American Community Survey (ACS) now fail to reject the null hypothesis of no effect of BTB on employment. In contrast to the published estimates, these ACS results are statistically significantly different from the CPS results, indicating a lack of robustness across datasets. We do not find evidence that these differences are due to sample composition or survey weights. There is limited evidence that these divergent results are explained by the different frequencies of these surveys. Differences in sample sizes may also lead to different estimates; the ACS has a much larger sample and more statistical power to detect effects near the corrected CPS estimates. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:cen:wpaper:25-58 |