http://repub.eur.nl/res/concept/jel-K42/ Recent publications classified by JEL Code K42 en http://repub.eur.nl/static-eur/img/logo.png http://repub.eur.nl http://repub.eur.nl/res/pub/34707/ 2012-07-03T00:00:00Z Field-experimental studies have shown that people litter more in more littered environments. Inspired by these findings, many cities around the world have adopted policies to quickly remove litter. While such policies may avoid that people follow the bad example of litterers, they may also invite free-riding on public cleaning services. This paper reports the results of a natural field experiment where, in a randomly assigned part of a residential area, the frequency of cleaning was reduced from daily to twice a week during a three-month period. Using high-frequency data on litter at treated and control locations before, during, and after the experiment, we find strong evidence that litter begets litter. However, we also find evidence that some people start to clean up after themselves when public cleaning services are diminished. Dur, A.J. Vollaard, B. http://repub.eur.nl/res/pub/34944/ 2011-04-01T00:00:00Z Abstract. The corporate governance debate mainly deals with the effectiveness of techniques to protect shareholders from the controllers’ misbehaviour. This article takes a different approach. Focussing on self-dealing, it shows that effective strategies to protect investors from expropriation differ from country to country. However, some may be more efficient than others. The inefficiency of an effective discipline of self-dealing stems from the constraints it imposes on the discretion of controlling managers and shareholders. This article shows that both the US litigation-based model and the UK governance-based model are effective against expropriation, but their efficiency can be improved. In light of this, this article recommends restricting the influence of non-controlling shareholders to the selection of a minority of independent directors, whose task should be limited to monitoring and validating self-dealing. These findings can be extended from self-dealing to similar conflicts of interest that may lead to expropriation of shareholders, and to their regulation in other jurisdictions. Pacces, A.M. http://repub.eur.nl/res/pub/13461/ 2008-03-10T00:00:00Z Given the threats of our current 'risk society', there is an ever-increasing demand for safety regulation to counter the harmful effects of an equally growing number of dangerous activities. Claims for more safety and security abound, ranging from concerns about people killed in traffic accidents and consumers harmed by unsafe products to anxiety about environmental disasters (global warming) and terrorism. This state of affairs poses difficult issues for policy makers. While government resources are necessarily limited, demands for safety and security are in principle without bounds. It is thus unavoidable that difficult choices must be made and priorities must be set. The Law and Economics literature has developed a comprehensive normative framework to prescribe optimal legal policies when individuals behave rationally. It is well established that enforcement agents should not aim at a minimum level of violations of legal norms but at an optimal level. The main goal of this paper is to apply the insights from the Law and Economics literature on optimal law enforcement to the area of safety regulation. Our paper distinguishes between the form of the sanctions (monetary versus non-monetary), the role of private parties versus public agents in enforcement (e.g. group actions), the timing of the enforcement measures (preclusion, act-based sanctions and harm-based sanctions) and the division of competencies between central enforcement authorities and decentralized enforcement agencies. Furthermore, we discuss several criticisms on the rational choice model (especially related to terrorism) and briefly discuss compliance strategies as alternative approach to deterrence strategies. Bergh, R.J. van den Visscher, L.T. http://repub.eur.nl/res/pub/10907/ 2008-01-24T00:00:00Z This dissertation reappraises the existing framework for economic analysis of corporate law. The standard approach to the legal foundations of corporate governance is based on the ‘law matters’ thesis, according to which corporate law promotes separation of ownership and control by protecting minority shareholders from expropriation. This book takes a broader perspective on the economic and legal determinants of corporate governance. It shows that investor protection is a necessary, but not sufficient, legal condition for efficient separation of ownership and control. Supporting control powers vested in managers or controlling shareholders is at least as important as protecting investors from their abuse. Corporate law does not only matter in the last respect; it matters in both. This result is derived by interpreting corporate governance based on three categories of private benefits of control. Corporate law affects corporate governance depending on its impact on each category of private benefits, and not just on those accounting for shareholder expropriation. Three major areas of corporate law are considered with this view. The first is the legal distribution of corporate powers. The second is the discipline of related-party transactions. The third is regulation of control transactions. The three areas are investigated comparatively in the US, the UK, Italy, Sweden, and the Netherlands. The investigation shows that, when corporate law is analyzed in this fashion, it explains the different patterns and performance of corporate governance. This account of corporate law is not only useful for understanding separation of ownership and control, but also for indicating how to improve its efficiency through legal intervention. Pacces, A.M. http://repub.eur.nl/res/pub/11349/ 2006-10-01T00:00:00Z We consider a stylized model of crime and punishment in which the prosecution policy is defined by three variables: the size of punishment, the type of punishment and the detection probability. We derive the optimal type of punishment under the assumption that the detection probability is chosen by a government official whose objective function places a higher weight on the government's budget than the social welfare function does. We show that for serious crimes exclusive imprisonment is welfare maximizing. If costs of imprisonment are taken into account, the optimal punishment is a prison term with an additional fine that is smaller or equal to the costs of the prison term. For less serious crimes, fines without imprisonment are welfare maximizing. Therefore, this paper demonstrates that the standard result of the literature that fines should be used whenever feasible need not hold in the presence of agency conflicts. Moreover, it offers a new economic explanation for the wide-spread use of mandatory imprisonment for serious crimes. Dittmann, I. http://repub.eur.nl/res/pub/7423/ 2006-01-02T00:00:00Z This paper develops a model in which individuals gain social status among their peers for being 'tough' by committing violent acts. We show that a high penalty for moderately violent acts (zero-tolerance) may yield a double dividend in that it reduces both moderate and extreme violence. The reason is that a high penalty keeps relatively 'gutless' individuals from committing moderately violent acts, which raises the signaling value of that action, and thus makes it more attractive for otherwise extremely violent individuals. Conversely, a high penalty for extremely violent acts may backfire, as it induces relatively 'tough' individuals to commit moderately violent acts and so makes moderate violence more attractive for otherwise nonviolent individuals. Dur, A.J. http://repub.eur.nl/res/pub/152/ 2001-01-22T00:00:00Z Moral outrage was the response of the Chinese press, when Cheng Kejie, one of the country's highest officials, Vice-Chairman of the Standing Committee of the National People's Congress (NPC) and former Governor of the Guangxi Zhuang Autonomous Region, was arrested on grounds of corruption on 25 April 2000. Cheng's arrest came amidst a spate of serious corruption cases that reached into the top echelons of China's state leadership (China Aktuell 2000). His case attracted wide public attention in national and international Chinese media because of his high office, the number of officials implicated, and the involvement of his lover Li Ping (dubbed the 'Jiang Qing of Guangxi' by the Hong Kong and overseas Chinese press) (Ming Pao 2000), daughter-in-law of his predecessor in the position of Governor of Guangxi, and for years the most influential woman in Guangxi. This was not just a case of a local official embezzling public funds, but a story of love and greed of a popular political leader, who had achieved much for his province. This was also not the story of an anonymous mistress, but of an ambitious, intelligent and attractive woman using the position of first her father-in-law then her lover to systematically and on a long-term basis exploit the powers vested in the office of provincial governor. The accusation against them focused on three crimes: appropriation and sale of real estate development and construction rights, sale of publicly subsidized goods at market prices and promotion of trusted allies into official positions of power. While the personal details of his deeds and his final execution in September 2000 fascinated the Chinese and Hong Kong press, his case also demonstrates how corruption works in China today (Hendrischke 2001). Krug, B. Hendrischke, H.