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on Law and Economics |
| By: | Kalyagin Grigory (Department of Economics, Lomonosov Moscow State University) |
| Abstract: | This article is devoted to the analysis of one of the key principles of optimal law enforcement in the economic theory of crime and punishment – the principle of marginal deterrence. Despite the importance of marginal deterrence for organizing an effective fight against crime, there is no consensus understanding of it even at the theoretical level, which makes it difficult to empirically test the effectiveness of marginal deterrence. Here we consider in detail alternative approaches of researchers to understanding this principle, as well as the impact that different understandings have on the optimal policy of public law enforcement and crime deterrence. In this article, we also propose an original model of marginal deterrence that fills a noticeable theoretical gap: the crimes between which a potential offender chooses in our model differ from each other not in the income they can bring him, but in the probability for him to avoid punishment. The main conclusion: the severity of punishment for a crime with a higher probability of detection, in general law enforcement, not only has an internal optimum, but most likely this optimum will be lower than the traditional solution for cases where it exists, in which the optimal severity of punishment is equal to the amount of damage caused to society by the offense, divided by the probability of punishment. This result also holds for cases where the social damage from a crime with a lower probability of detection and punishment of the offender does not exceed the similar damage for an alternative crime characterized by a higher probability of detection. |
| Keywords: | crime, deterrence, marginal deterrence, general enforcement, optimal sanctions |
| JEL: | K14 K42 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:upa:wpaper:0076 |
| By: | Patrice Bougette (Université Côte d'Azur, CNRS, GREDEG, France); Frédéric Marty (Université Côte d'Azur, CNRS, GREDEG, France); Simone Vannuccini (Université Côte d'Azur, CNRS, GREDEG, France) |
| Abstract: | In abuses of dominance cases, competition authorities typically impose both pecuniary sanctions and behavioural injunctions. These instruments serve distinct but complementary functions: fines primarily deter anti-competitive behaviour; injunctions seek to restore conditions conducive to competition on the merits. Yet, the effectiveness of such behavioural remedies remains contested. They often entail long-term obligations and are vulnerable to strategic circumvention or to uncertainties inherent in competitive and technological dynamics. In this paper, focusing on the European Union (EU)'s context, we propose a two-tiered sanctioning framework that addresses the drawbacks of behavioural injuctions: an initial fine, payable immediately, and a conditional component whose imposition - both in terms of activation and magnitude - would depend on the observed implementation and effects of the behavioural obligations. This structure aims to enhance both the flexibility and credibility of remedies, while preserving deterrence. |
| Keywords: | Abuses of dominant position, fines, behavioural injunctions, market dynamics, incentives |
| JEL: | K21 L41 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:afd:wpaper:2506 |
| By: | Céline Gauthier-Maxence (PJSE - Paris Jourdan Sciences Economiques - 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 nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement) |
| Abstract: | The Siri Case, triggered by a complaint filed by the Ligue des droits de l'Homme against Apple in February 2025, raises critical legal questions about nonconsensual voice recordings under French and European law. At its core lie the GDPR's strict consent requirements, the French Penal Code's prohibitions on illicit recordings, and emerging jurisprudence on digital privacy. This paper analyzes Apple's potential liability in light of past precedents, including settlements in the U.S. and evolving European regulatory standards. It also considers the broader implications for data protection enforcement, cross-border data transfers, and the future regulation of voice assistants. Ultimately, the case may mark a turning point in harmonizing European responses to privacy violations by AI-driven technologies. |
| Keywords: | Data protection, GDPR, privacy law, non-consensual recordings |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05064735 |
| By: | Alejandro Bayas; Nicolas Grau; Esteban Puentes |
| Abstract: | This paper analyzes a substantial decline in juvenile delinquency in Chile over a short period. Using administrative data linking educational and criminal justice records, we compare the outcomes of male cohorts born in 1996 and 2001. We find that the probability of being prosecuted by age 17 fell by approximately 31% between these cohorts. Employing a Blinder-Oaxaca decomposition, we show that about 24% of the decline is associated with compositional changes in variables such as peer academic performance and maternal education. The explained share is larger for violent crimes (35%) than for non violent crimes (19%). Our findings suggest that improvements in the educational and social environments played an important role in the decline of youth criminal behavior. These results highlight the relevance of early educational investments in shaping long-term crime outcomes and suggest that schools can serve as critical platforms for crime prevention efforts. |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:udc:wpaper:wp565 |
| By: | Valentin Bolotnyy; Natalia Emanuel; Pim Welle |
| Abstract: | Involuntary hospitalization of people experiencing a mental health crisis is a widespread practice, 2.4 times as common as death from cancer and as common in the U.S. as incarceration in state and federal prisons. The intent of involuntary hospitalization is to prevent individuals from harming themselves or others through incapacitation, stabilization and medical treatment over a short period of time. Does involuntary hospitalization achieve its goals? We leverage quasi-random assignment of the evaluating physician and administrative data from Allegheny County, Pennsylvania, to estimate the causal effects of involuntary hospitalization on harm to self (proxied by death by suicide or overdose) and harm to others (proxied by violent crime charges). For individuals whose cases are judgment calls, where some physicians would hospitalize but others would not, we find that hospitalization nearly doubles both the probability of dying by suicide or overdose and also nearly doubles the probability of being charged with a violent crime in the three months after evaluation. We provide evidence of earnings and housing disruptions as potential mechanisms. Our results suggest that, on the margin, the system we study is not achieving the intended effects of the policy. |
| Keywords: | involuntary commitment; psychiatric detention; mental health treatment |
| JEL: | I18 I12 K14 |
| Date: | 2025–07–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:101310 |
| By: | Alessio Carrozzo Magli; Giovanni Righetto; Antonio Schiavone |
| Abstract: | Organized crime groups are known to provide electoral support to politicians, but the rewards they obtain in return remain poorly understood. We develop a theoretical framework suggesting that modern mafia support hinges on parties’ willingness to weaken anti-mafia policies, specifically by neglecting the reallocation of confiscated mafia assets. Judicial records indicate that when these assets remain unassigned, crime families can quietly repossess them, turning policy inertia into a hidden payoff. Using data from Sicilian municipalities between 1992 and 2022, we first detect vote manipulation in tightly contested majoritarian races—particularly in smaller towns—indicating strategic vote buying by the mafia. A regression discontinuity design, restricted to comparable municipalities quasi-randomly sorted around the threshold, reveals that narrowly won Forza Italia victories trigger a sharp fall in asset reallocations only within mafia controlled areas. To capture intensive-margin variation in the vote-buying deal, we exploit the mafia’s abrupt 1987 withdrawal of support from the Christian Democrats. Municipalities suffering larger DC vote losses—our proxy for historical mafia vote-buying capacity-experience steeper post-election cuts in asset reallocations, but only during Berlusconi’s governments. Instrumenting modern Forza Italia support with these historical shifts further supports a causal relation between mafia vote buying and national-level policy concessions. |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:not:notnic:2025-08 |
| By: | Arnaud Deseau (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); Adam Levai (LISER - Luxembourg Institute of Socio-Economic Research, UCL IRES - Institut de recherches économiques et sociales - UCL - Université Catholique de Louvain = Catholic University of Louvain); Michèle Schmiegelow (UCLouvain) |
| Abstract: | This paper evaluates the importance of access to justice (ATJ) for economic growth. To do so, we create a new database on the number of judges per capita by collecting data from various public institutions and academic publications. We use these data as a country-level indicator to capture the structural evolution of ATJ from 1970 to 2019 for a wide range of developed and developing countries. Using an instrumental variable approach in a dynamic panel setting to deal with endogeneity, we show that ATJ has a sizable positive effect on economic growth. The substantial aggregate effect of ATJ on growth is independent of countries' legal origin, customary law, rule of law or level of democracy. However, we find evidence that the economic returns from ATJ are higher in poorer countries. In terms of mechanisms, our results suggest that ATJ promotes growth via higher government accountability and improved institutional quality.''Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels'' [Sustainable Development Goal 16 (United Nations, 2015)] ✩ We would like to thank the editor, Evi Pappa, several anonymous referees, as well as Alexia Autenne, |
| Keywords: | Access to justice, Economic growth, Institutions, Judges, Access to justice Economic growth Institutions Judges |
| Date: | 2025–02 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05067001 |
| By: | Barış K. Yörük; Joseph J. Sabia; Tessie Krishna; Dhaval M. Dave |
| Abstract: | With the goal of lowering incentives for alcohol and substance abuse, U.S. states have historically permitted private health insurers to deny reimbursement of medical claims stemming from alcohol or opioid impairment. However, a potential unintended consequence of such “exclusion provisions” is that they may reduce providers’ incentives to screen patients for alcohol intoxication and substance abuse, leading to an increase in risky health behaviors that carry substantial externality costs. In response to these concerns, 16 states and the District of Columbia repealed their exclusion provisions and replaced them with explicit prohibitions on the denial of health insurance claims resulting from alcohol and other substance use impairment (PDHIAs). This study is the first to comprehensively explore the effects of PDHIAs on alcohol- and drug- related outcomes, with a particular focus on externalities associated with these risky health behaviors, allowing us to broadly assess their potential welfare effects. Leveraging a variety of national data sources (Uniform Crime Reports, Fatality Analysis Reporting System, Behavioral Risk Factor Surveillance System, Treatment Episode Data Set, and Medical Expenditure Panel Survey) in conjunction with a generalized difference-in-differences approach, we find little support for the hypothesis that PDHIAs generated ex ante moral hazard. To the contrary, there is some evidence that PDHIAs may have reduced some criminal arrests, drunk driving behaviors, and alcohol use. One explanation for these findings is that physicians may be more willing to refer treatment services for substance use-related health issues when patients and hospitals are not financially penalized by PDHIAs. Lastly, there is little evidence that PDHIAs had broader impacts on private insurance markets, either in affecting private health insurance coverage or average premiums. |
| JEL: | I10 I11 I12 I13 I18 K23 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33935 |
| By: | Rachel Le Marois (CRIS - Centre de recherche sur les inégalités sociales (Sciences Po, CNRS) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique, EM - EMLyon Business School); Lisa Buchter (EM - EMLyon Business School) |
| Abstract: | While France has passed laws stating that companies need to have 6% of disabled workers in their workforce, few organizations meet this quota today. Our article seeks to explain this enforcement gap by showing the role of the state in managerializing the law. We show how the state has contributed to shifting attention away from a focus on anti-discrimination, stressing instead financial concerns for companies (penalties for non-compliance, accounting techniques to circumvent this quota). Drawing on a two-year qualitative fieldwork, we trace how this managerialization of the law by state actors led to a commodification of disability inclusion in France. |
| Keywords: | Disabilities, Disabled Workers, Anti-Discrimination Measures, Disability inclusion, Managerialization of disability laws, Commodification of disability |
| Date: | 2025–06–17 |
| URL: | https://d.repec.org/n?u=RePEc:hal:journl:hal-05126557 |
| By: | Miguel Antón; Florian Ederer; Mireia Giné; Guillermo Ramirez-Chiang |
| Abstract: | We study common ownership in 49 countries from 2005 to 2019 and show that it is pervasive and rising around the world. However, despite this global growth, common ownership is still considerably lower in all countries compared to the United States. It is particularly high and growing rapidly among the largest firms, a trend observed across all countries and regions. The rise of common ownership stems not only from increased institutional investment but also from its growing concentration, a development in which the Big Three (BlackRock, Vanguard, State Street) play a dominant role, particularly in the United States. Although non-Big Three institutional investors remain important in other countries, the significant increase in common ownership in many countries is primarily attributable to the breadth, size, and growth of Big Three holdings. We also investigate how common ownership is related to legal, institutional, and market characteristics such as investor protection laws, competition laws, mandatory ESG disclosure, and labor market frictions across firms and countries. |
| JEL: | F65 G32 K21 L40 |
| Date: | 2025–06 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:33965 |