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on Law and Economics |
| By: | Ichiro Iwasaki; Evžen Kočenda |
| Abstract: | We examine the corporate criminal records of 18, 187 firms operating in 17 European emerging markets and empirically analyze the effects of board composition and national institutions on crime deterrence. Our analysis reveals that 872 firms (about 5% of the sample) committed 1, 734 crimes over 2020-2023. We show that firms with larger boards and greater board independence are associated with higher incidences of corporate crime, suggesting that larger or nominally independent boards may not function effectively in emerging market contexts. In contrast, female leadership and board gender diversity do not exhibit significant deterrent effects, implying that gender inclusion alone may not suffice in these environments. In banks with an outside board chairman, the occurrence of corporate crime increases substantially. Importantly, stronger national institutions consistently correlate with lower crime rates, a pattern observed universally across European emerging markets, and boards in countries with stronger institutions appear more effective in deterring crime. |
| Keywords: | corporate crime, board composition, board diversity, corporate governance, national institutions, banks, European emerging markets |
| JEL: | D22 G34 K14 L22 M21 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12132 |
| By: | Ulrika Ahrsjš (Stockholm School of Economics); Costas Meghir (Cowles Foundation, Yale University); MŒrten Palme (Stockholm University); Marieke Schnabel (University College London) |
| Abstract: | We examine the intergenerational effect of education policy on crime. Using administrative data that links outcomes across generations with crime records, we show that the Swedish comprehensive school reform, gradually implemented between 1949 and 1962, reduced conviction rates for both the generation directly affected by the reform and their sons. The reduction in conviction rates occurred in several types of crime. Mediation analysis suggests that key channels include increased parental educational attainment and household income, as well as reduced criminal behavior among fathers. |
| Date: | 2025–08–23 |
| URL: | https://d.repec.org/n?u=RePEc:cwl:cwldpp:2356r2 |
| By: | Andrés Barrios Fernández; Jorge Garcia-Hombrados; Daniel Perez-Parra |
| Abstract: | This paper provides causal evidence that geographic specialization can significantly enhance police effectiveness. Using rich administrative and survey data from Chile, we examine a major reform that subdivided police operational areas - e.g., municipalities - into smaller zones known as quadrants. On average, each municipality was divided into seven quadrants, with officers permanently assigned to these territories to allow them to develop a deep understanding of their structure, crime patterns, and communities. By exploiting the staggered implementation of the reform across municipalities, we show that this reorganization enhanced police effectiveness along multiple dimensions. Among surveyed households, twelve-month victimization rates declined by 10 percentage points (36%). In line with this result, administrative records from the police reveal a 14% reduction in reported crime. The reform also enhanced public confidence: the share of households reporting high trust in police rose by 12 percentage points (30%), while those perceiving increased criminal activity fell by 15 percentage points (36%). Consequently, the share of households investing in private security measures decreased by 7.7 percentage points (37%). Evidence suggests these improvements stem from geographic specialization, as households in treated municipalities report both greater police presence and better police performance across multiple dimensions associated with a better knowledge of the quadrants and their communities. |
| Keywords: | Police effectiveness, geographic specialization, police organization |
| Date: | 2025–09–03 |
| URL: | https://d.repec.org/n?u=RePEc:cep:cepdps:dp2122 |
| By: | Rafael Araujo; Vitor Possebom; Gabriela Setti |
| Abstract: | We estimate the impact of environmental law enforcement on violence in the Brazilian Amazon. The introduction of the Real-Time Deforestation Detection System (DETER), which enabled the government to monitor deforestation in real time and issue fines for illegal clearing, significantly reduced homicides in the region. To identify causal effects, we exploit exogenous variation in satellite monitoring generated by cloud cover as an instrument for enforcement intensity. Our estimates imply that the expansion of state presence through DETER prevented approximately 1, 477 homicides per year, a 15% reduction in homicides. These results show that curbing deforestation produces important social co-benefits, strengthening state presence and reducing violence in regions marked by institutional fragility and resource conflict. |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2509.06076 |
| By: | Miriam Malament (Department of Economics, Universidad de San Andrés) |
| Abstract: | Do symbolic penalties work? This paper provides causal evidence that even minimal, unenforced legal sanctions can influence civic behavior. I study a 2012 reform in Argentina that introduced optional voting for 16- to 17-year-olds, while voting from age 18 remained compulsory and formally subject to a small, unindexed fine of 50 pesos. Using a regression discontinuity design and administrative data from 15 national elections between 2015 and 2023, I find that turnout increases by about 20 percentage points at age 18, despite negligible enforcement. Complementary evidence from national survey data suggests this effect reflects expressive compliance: symbolic penalties act as normative signals, activating a sense of civic duty rather than deterring through material sanctions. The response is especially pronounced among lower-income and lower-education youth. These findings offer rare causal evidence that symbolic penalties can shape civic behavior by appealing to internalized civic norms rather than fear of punishment. |
| Keywords: | elections, compulsory voting, Argentina, regression discontinuity design |
| JEL: | D72 C31 K10 Z13 P16 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:sad:ypaper:17 |
| By: | Dominika Langenmayr (KU Eichstätt-Ingolstadt, WU Vienna, CESifo); Mikayel Tovmasyan (KU Eichstätt-Ingolstadt); Sebastian Vosseler (KU Eichstätt-Ingolstadt) |
| Abstract: | Are sanctions bypassed by hiding money offshore? Using bilateral data on bank deposits, we compare how offshore deposits from sanctioned versus non-sanctioned countries develop after the U.S. and the EU impose financial sanctions. Sanctions targeting individuals increase offshore deposits, as (potential) targets attempt to hide their funds. Broader financial sanctions reduce offshore (and other foreign) deposits, as money is repatriated. A synthetic control case study of Russia following the annexation of Crimea confirms our main findings, showing a 15% post-sanction increase in offshore deposits. These findings highlight the limits of symbolic sanctions and the need for secondary sanctions and financial surveillance. |
| Keywords: | Sanctions; tax havens; illicit financial flows |
| JEL: | F51 H12 K42 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:drx:wpaper:202536 |
| By: | Ivandic, Ria; Kirchmaier, Thomas; Machin, Stephen |
| Abstract: | This paper studies the effects of international terror attacks on out-group hate crimes committed against Muslims in a local setting. Event studies based on rich administrative data from the Greater Manchester Police on 10 terror attacks reveal an immediate big spike in Islamophobic hate crimes and hate-based incidents when an attack occurs. In subsequent days, the hate crime incidence is magnified by real-time media reports. The attacks create an attitudinal shock that leads residents to perceive local minority groups that share the religion of the attack’s perpetrators as an out-group threat. The overall conclusion is that, even when they reside in places far from where jihadi terror attacks take place, local Muslim populations face a media-magnified likelihood of hate-based victimization. But only those incidents salient to resident populations, because of where they happen or because of the media’s magnification of them, impact the incidence of local hate crimes. |
| Keywords: | international terror attacks; out-group; Islamophobic hate crime; media magnification |
| JEL: | J1 |
| Date: | 2024–08–31 |
| URL: | https://d.repec.org/n?u=RePEc:ehl:lserod:122123 |
| By: | Ewan McGaughey |
| Abstract: | Is public ownership or privatisation better, and when? The 20th century was like a pendulum, swinging between narratives that we must abolish private ownership in the means of production, to saying there 'are virtually no limits on what can be privatised', and hovering as if ready to swing again. By contrast, this paper shows that outcomes improve and costs decrease when enterprises are publicly owned, if property is 'non-accessible'. Otherwise private ownership is better. Property is 'non-accessible' if an enterprise is a skill-based, natural, or network monopoly. Property is 'accessible' if people can buy land or capital, source materials or vehicles, or get skills or knowledge to start up a business. Then, competition channels private greed into the public good. This paper contends that data lets us move beyond ideological clash, and gives answers that practically assist policy, to fill the gaps in human rights and market failure frameworks. For example, water is 90% publicly owned in wealthy countries, with lower bills and better outcomes. For rail, fares are lower with greater electrification if tracks and operators are public. For electricity, bills are lower with more renewables if grids and a retail option are public. For telecom networks, public ownership tends to reduce bills and raise internet speed. Most wealthy countries hold non-accessible property in public hands, and do better for it. Three further principles are crucial if circumstances change. First, technology can change what is accessible property, such as renewables making electricity generation competitive, or big tech data creating new monopolies. So, law must respond to tech. Second, there may be good non-economic reasons, such as protecting democracy and the environment, to change the public/private balance. Third, good governance is distinct from wise ownership choices, and generally supports voice for workers, as well as investors, and service-users where competition fails. Together, good governance and wise ownership socialise the nature of all property, and internally transform the public-private divide. Policymakers should base decisions on the evidence of what works, and this theory helps make those decisions. |
| Keywords: | Privatisation, nationalisation, socialism, capitalism, water, health, electricity, rail, education, media, internet, market failure, property, production, non-accessible, monopoly, democracy, technology, governance |
| JEL: | I28 J10 K11 K22 K23 K32 L12 L21 L22 L32 L43 L51 L53 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:cbr:cbrwps:wp545 |
| By: | Claudio Ferraz; Frederico Finan |
| Abstract: | This chapter examines why democracies in the developing world frequently underperform in providing effective governance. We argue that these shortcomings stem from weaknesses in accountability mechanisms, which leave governments vulnerable to corruption, clientelism, and elite capture. Our framework distinguishes three accountability channels: vertical (citizens’ control over politicians), horizontal (checks and balances across state institutions), and diagonal (oversight by media and civil society). We synthesize the recent theoretical and empirical literature to assess how each channel operates, the conditions under which it succeeds, and why it often fails. A central finding is that accountability institutions rarely fail on their own; instead, they are actively undermined by political actors seeking to preserve rents and entrench power. This dynamic weakens electoral competition, erodes judicial independence, and curtails media freedom, producing a mutually reinforcing cycle of weak accountability. Additionally, we argue that sustainable reforms cannot be achieved by strengthening any single channel in isolation. Since vertical, horizontal, and diagonal accountability are interdependent, effective reform requires bolstering all three simultaneously. We conclude by discussing the implications of this perspective for future research, including the role of new technologies, political polarization, and candidate selection in reshaping accountability in developing democracies. |
| JEL: | D72 H11 K42 O43 P50 |
| Date: | 2025–09 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34198 |