Rule of Law
Gregory Sidak & David Teece
Journal of Competition Law & Economics, September 2010, Pages 521-594
Abstract:
In October 2009, the Federal Communications Commission proposed "net neutrality" regulations, including a new rule that would have the effect of banning optional business-to-business transactions between broadband Internet service providers (ISPs) and content providers for enhanced delivery of packets over the Internet. The proposed "nondiscrimination" rule would have the ironic effect of actively discriminating against any kind of content or application that is differentiated by its need for greater assurance of higher quality transmission across the Internet (known as quality of service, or QoS) than undifferentiated best-effort delivery can offer. This result not only would reduce static efficiency by encouraging higher consumer prices, but also would reduce dynamic efficiency by retarding innovation. The proposed rule manifests an inverse relationship between means and ends, for it would actively thwart the Commission's stated purpose of promoting innovation both in and at the edges of the network. These economic considerations set the bar very high for those who claim that the new regulation is needed to prevent theoretical harms that have not materialized in more than a decade of real-world experience. By now, the economic arguments in favor of network neutrality regulation have coalesced around three principal theories. The first is the theory that, if permitted to charge suppliers of content or applications for optional higher quality delivery, network operators will ignore positive spillover effects and set charges at higher than socially optimal levels. The second is the theory that vertically integrated network operators will foreclose independent providers of Internet content and applications. A third and less clearly articulated theory is that the broadband ISP will degrade the quality of best-effort delivery of Internet packets-reducing the quality of best-effort delivery to that of a "dirt road"-as a means of coercing suppliers of content or applications into purchasing superior QoS. We show that none of these three theories of harm is plausible. Certainly, none justifies the proposed across-the-board ban on optional business-to-business QoS transactions between ISPs and content providers-transactions that could prove particularly valuable to smaller content providers looking to differentiate their offerings from and compete with larger content rivals that have the scale and resources to meet their QoS needs with third-party or self-deployed content delivery networks.
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The influence of forensic evidence on the case outcomes of homicide incidents
Deborah Baskin & Ira Sommers
Journal of Criminal Justice, forthcoming
Objective: In spite of the growth of forensic science services little published research exists related to the impact of forensic evidence on criminal case outcomes. The present study focused on the influence of forensic evidence on the case processing of homicide incidents.
Materials and Methods: The study utilized a prospective analysis of official record data that followed homicide cases in five jurisdictions from the time of police incident report to final criminal disposition.
Results: The results showed that most homicides went unsolved (34.5% conviction rate). Only 55.5% of the 400 homicide incidents resulted in arrest of which 77% were referred to the district attorney. On the other hand, 94% of cases referred to the district attorney were charged. Cases were more likely to have arrests, referrals, and charges when witnesses provided information to the police. Suspects who knew their victims were more likely to be arrested and referred to the district attorney. Homicides committed with firearms were less likely to be cleared. The most noteworthy finding was that none of the forensic evidence variables significantly influenced criminal justice outcomes.
Conclusions: The study results suggest that forensic evidence is auxiliary and non-determinative for homicide cases.
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Judicial Independence and Retention Elections
Brandice Canes-Wrone, Tom Clark & Jee-Kwang Park
Journal of Law, Economics, and Organization, forthcoming
Abstract:
Judges face retention elections in over a third of US state courts of last resort and numerous lower courts. According to conventional wisdom, these elections engender judicial independence and decrease democratic accountability. We argue that in the context of modern judicial campaigns, retention elections create pressure for judges to cater to public opinion on "hot-button" issues that are salient to voters. Moreover, this pressure can be as great as that in contestable elections. We test these arguments by comparing decisions across systems with retention, partisan, and nonpartisan contestable elections. Employing models that account for judge- and state-specific effects, we analyze new data regarding abortion cases decided by state supreme courts between 1980 and 2006. The results provide strong evidence for the arguments.
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Kirk Randazzo, Richard Waterman & Michael Fix
Political Research Quarterly, forthcoming
Abstract:
Do state supreme court judges render decisions according to their ideological preferences, or are they constrained by the language of state statutes? Using data from the Judge-Level State Supreme Court Database, the authors analyze the votes of individual judges from 1995 to 1998 to determine whether their behavior is constrained by legislation. The results indicate that more detailed language (resulting in statutes with higher word counts) significantly limits the discretion afforded to liberal judges while simultaneously facilitating the ideological voting of their conservative colleagues.
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Judicial Discretion in Corporate Bankruptcy
Nicola Gennaioli & Stefano Rossi
Review of Financial Studies, forthcoming
Abstract:
We study a demand-and-supply model of judicial discretion in corporate bankruptcy. On the supply side, we assume that bankruptcy courts may be biased for debtors or creditors, and subject to career concerns. On the demand side, we assume that debtors (and creditors) can engage in forum shopping at some cost. A key finding is that stronger creditor protection in reorganization improves judicial incentives to resolve financial distress efficiently, preventing a "race to the bottom" toward inefficient uses of judicial discretion. The comparative statics of our model shed light on a lot of evidence on U.S. bankruptcy and yield novel predictions on how bankruptcy codes should affect firm-level outcomes.
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To Elect or to Appoint? Bias, Information, and Responsiveness of Bureaucrats and Politicians
Matias Iaryczower, Garrett Lewis & Matthew Shum
California Institute of Technology Working Paper, August 2010
Abstract:
In this paper, we address empirically the trade-offs involved in choosing between bureaucrats and politicians. In order to do this, we need to map institutions of selection and retention of public officials to the type of public officials they induce. We do this by specifying a collective decision-making model, and exploiting its equilibrium information to obtain estimates of the unobservable types. We focus on criminal decisions across US states' Supreme Courts. We find that justices that are shielded from voters' influence ("bureaucrats") on average (i) have better information, (ii) are more likely to change their preconceived opinions about a case, and (iii) are more effective (make less mistakes) than their elected counterparts ("politicians"). We evaluate how performance would change if the courts replaced majority rule with unanimity rule.
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The Relative (Un)Importance of Rehnquist Court Decisions
Robert Robinson
Politics & Policy, October 2010, Pages 907-938
Abstract:
The Rehnquist Court took conservative positions more often than its immediate predecessors. Less clear, however, is the degree to which its decisions actually impacted the legal framework. Given studies that suggest that ideological heterogeneity within Supreme Court majority coalitions and systematic trends of "institutional thickening" hinder the creation of legally important decisions, I hypothesize that the decisions of the Rehnquist Court should be less legally important relative to prior courts, and should create more important liberal legal decisions than expected. Employing measures of legal importance developed through the network analysis of Supreme Court precedent, I find that Rehnquist Court decisions are less legally important than decisions from prior eras. Furthermore, I find that in the most salient legal subject areas, the Rehnquist Court's liberal and conservative decisions are of roughly equal importance. Given these findings, the Rehnquist Court's ideological impact on precedent is more modest than its critics charge.
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The Rise of the Choral Court: Use of Concurrence in the Burger and Rehnquist Courts
Nancy Maveety, Charles Turner & Lori Beth Way
Political Research Quarterly, September 2010, Pages 627-639
Abstract:
Justices' goals when writing concurrences continue to elude scholars. This project extends Baum's contention that justices' goals are bifurcated. The authors argue that justices use concurrences as means to both speak about their legal policy preferences and win by being members of the majority voting coalition. An analysis of the Burger and Rehnquist Courts' concurring behavior illustrates that members of the Court are both authoring and joining concurrences in ways previously undocumented. Specifically, justices have become comfortable not only authoring concurrences but regularly joining others' separate opinions as well - a trend the authors call choral-Court decision making.
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Net Neutrality and Consumer Welfare
Gary Becker, Dennis Carlton & Hal Sider
Journal of Competition Law & Economics, September 2010, Pages 497-519
Abstract:
The Federal Communications Commission's proposed net neutrality rules would, among other things, prohibit broadband access providers from prioritizing traffic, charging differential prices based on the priority status, imposing congestion-related charges, and adopting business models that offer exclusive content or that establish exclusive relationships with particular content providers. The proposed regulations are motivated in part by the concern that the broadband access providers will adopt economically inefficient business models and network management practices due to a lack of sufficient competition in the provision of broadband access services. This paper addresses the competitive concerns motivating net neutrality rules and addresses the potential impact of the proposed rules on consumer welfare. We show that there is significant and growing competition among broadband access providers and that few significant competitive problems have been observed to date. We also evaluate claims by net neutrality proponents that regulation is justified by the existence of externalities between the demand for Internet access and content services. We show that such interrelationships are more complex than claimed by net neutrality proponents and do not provide a compelling rationale for regulation. We conclude that antitrust enforcement and/or more limited regulatory mechanisms provide a better framework for addressing competitive concerns raised by proponents of net neutrality.
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A Little-known Case from the American Civil War: The War Crimes Trial of Major General John H. Gee
Guénaël Mettraux
Journal of International Criminal Justice, September 2010, Pages 1059-1068
Abstract:
Major John Henry Gee was the commandant of the Confederate prison at Salisbury, North Carolina from 1864 until 1865. During his tenure, thousands of Union prisoners of war died of starvation and diseases or were shot when attempting to escape. Shortly after the end of hostilities, Major Gee was arrested, charged with two counts of violations of the laws of war and brought before a military commission to be tried. The trial of Major Gee is one of the first recorded trials for war crimes and a rare early example of domestic prosecution of an enemy fellow-national for what was effectively an international crime, in a war in which his side had been vanquished. Unlike the war crimes trial of Henry Wirz, commandant of Andersonville prison during the American Civil War, little attention has been paid to this important precedent.
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Corrective Taxation versus Liability
Steven Shavell
NBER Working Paper, July 2010
Abstract:
Taxation and liability are compared here as means of controlling harmful externalities. It is emphasized that liability has an advantage over taxation: inefficiency of incentives arises under taxation when, as would be typical, it would be impractical for a tax to reflect all variables that significantly affect expected harm, whereas efficiency of incentives under liability does not require the state to determine expected harm - it requires only that injurers pay for harm that occurs. However, taxation enjoys an advantage over liability: incentives under liability are diluted to the degree that injurers might escape suit. The optimal joint use of taxation and liability is also examined, and it is shown in the model that is analyzed that liability should be employed fully because liability creates more efficient incentives than taxation; a tax should be used only to take up the slack due to the possibility that suit for harm would not be brought.
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Turning Piracy into Profits: A Theoretical Investigation
Antonio Minniti & Cecilia Vergari
Information Economics and Policy, forthcoming
Abstract:
We analyse how the presence of a (private, small-scale) file-sharing community affects the profitability of producers of digital goods within a spatial duopoly model à la Hotelling (1929). Consumers can download pirated content by joining this file-sharing network. To gain access to the community, consumers have to buy and share a digital good with other members. We show that firms benefit from piracy in emerging markets, that is, markets that are not fully covered. The activity of file-sharing, in fact, allows firms to reach a larger share of customers who otherwise would not buy at all. This effect is missing in mature and widespread markets where firms prefer to be protected from piracy. Our results provide a rationale for the observation that in emerging countries, companies are unlikely to take a firm stance against piracy.
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Ignoring Advice and Consent? The Uses of Judicial Recess Appointments
Scott Graves & Robert Howard
Political Research Quarterly, September 2010, Pages 640-653
Abstract:
The authors seek to answer the questions of why presidents use the power to temporarily seat federal court judges during recesses of the Senate. The use of the recess power can upset the carefully calculated separation of powers envisioned by the framers, shifting power away from one branch of government toward another. Examining every judicial recess appointment from 1789 to 2004, the authors discover that presidents are conditionally strategic in their use of the unilateral authority to appoint federal court judges during Senate recesses but that the use of this power is careful and spare, especially in the modern era.
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Owning versus Renting: Do Courts Matter?
Pablo Casas‐Arce & Albert Saiz
Journal of Law and Economics, February 2010, Pages 137-165
Abstract:
We develop a legal contract enforcement theory of the decision to own or lease. The allocation of ownership rights will minimize enforcement costs when the legal system is inefficient. In particular, when legal enforcement of contracts is costly, there will be a shift from arrangements that rely on such enforcement (such as a rental agreement) toward other forms that do not (such as direct ownership). We then test this prediction and show that costly enforcement of rental contracts hampers the development of the rental housing market in a cross section of countries. We argue that this association is not the result of reverse causation from a developed rental market to more investor protective enforcement and is not driven by alternative institutional channels. The results provide supportive evidence for the importance of legal contract enforcement for market development and the optimal allocation of property rights.
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Who pays the piper? The political economy of freedom of information
Tom McClean
Government Information Quarterly, October 2010, Pages 392-400
Abstract:
If freedom of information is fundamental to contemporary democracy, why have democratic countries differed so markedly in their willingness to pass laws enshrining formal rights of access to government files? This article demonstrates that an analysis grounded in comparative political economy can provide a compelling answer to this question. Specifically, it demonstrates that the more highly coordinated a country's economy, the less transparent it is likely to be. Through a comparison of the United States and Germany, this article argues that in coordinated market economies, ongoing negotiations between the state and the peak representative bodies provide privileged access to information about the government, and indeed privileged channels of influence over government action. Public access to official files threatens this privileged access. In less coordinated economies, however, firms lack this privileged access; they are likely to favor access laws as a partial substitute, especially since such laws are more consistent with the highly fragmented and competitive environment in which they operate. By further comparing Sweden and the United Kingdom, it also demonstrates the limits of this explanation, suggesting that historical sequences and classic political variables should also be taken into account.
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Do Restrictions on Eminent Domain Harm Economic Development?
Dick Carpenter & John Ross
Economic Development Quarterly, November 2010, Pages 337-351
Abstract:
After the U.S. Supreme Court upheld in the Kelo decision the use of eminent domain for private-to-private transfer of property for economic development, public outrage was followed by attempts to restrict such use of eminent domain. Opponents of restrictions predicted dire consequences for state and local economies. This study considers whether restricting the use of eminent domain for economic development results in negative economic effects. The authors examine economic indicators before and after legislative or judicial restrictions on eminent domain across all states and between states based on the type of legislative/judicial change. Results indicate that there appear to be no negative economic consequences resulting from limiting the use of eminent domain when examining economic indicators before and after legislative/judicial change. Adopting either moderate or major eminent domain restrictions appears to create no economic ill effects when analyzing differences in trends based on the type of legislation passed or scope of judicial decision.