Consumer class actions are under broad attack for providing little in compensation to class members. One response to this charge is the argument that one of us has made elsewhere: consumer class actions should not be measured by their compensatory value, but by their deterrence value. But here we take up this critique of consumer class actions on its own terms: can they serve a meaningful compensatory role? Scholars have taken up this question before, but they have been stymied by the lack of available data. In this article, we present original data on the distribution of class action settlements in fifteen related small-stakes consumer class action lawsuits against some of the largest banks in the United States. We obviously can make no claim that these settlements are representative of most consumer class actions. Nonetheless, we believe our findings support the notion that, under certain circumstances, consumer class actions can indeed serve a meaningful compensatory role: when they eschew claim forms in favor of automatic distributions, and when they rely on standard-sized checks (rather than the cheaper, postcard-sized variety) and especially direct deposits to make those distributions. We believe these circumstances will only grow in the future as the "big data" revolution continues to unfold and electronic banking continues to evolve.
{"title":"An Empirical Look at Compensation in Consumer Class Actions","authors":"","doi":"10.2139/SSRN.2577775","DOIUrl":"https://doi.org/10.2139/SSRN.2577775","url":null,"abstract":"Consumer class actions are under broad attack for providing little in compensation to class members. One response to this charge is the argument that one of us has made elsewhere: consumer class actions should not be measured by their compensatory value, but by their deterrence value. But here we take up this critique of consumer class actions on its own terms: can they serve a meaningful compensatory role? Scholars have taken up this question before, but they have been stymied by the lack of available data. In this article, we present original data on the distribution of class action settlements in fifteen related small-stakes consumer class action lawsuits against some of the largest banks in the United States. We obviously can make no claim that these settlements are representative of most consumer class actions. Nonetheless, we believe our findings support the notion that, under certain circumstances, consumer class actions can indeed serve a meaningful compensatory role: when they eschew claim forms in favor of automatic distributions, and when they rely on standard-sized checks (rather than the cheaper, postcard-sized variety) and especially direct deposits to make those distributions. We believe these circumstances will only grow in the future as the \"big data\" revolution continues to unfold and electronic banking continues to evolve.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-03-06","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122999576","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
I develop the notion of “thin political markets.” These are esoteric areas of market rule-making where corporate managers possess the technical expertise necessary for informed regulation, enjoy strong economic interests in the outcome, and face little political opposition. The motivating phenomenon for thin political markets is the political process of accounting rule-making. I present evidence suggesting that managers use their political and substantive advantage in thin political markets to subtly structure the rules of the game to their advantage. On one level, this action is entirely consistent with the capitalist spirit a la Milton Friedman – “The social responsibility of business is to increase its profits.” But there are serious questions as to whether such actions sustain the long-term legitimacy of market capitalism. In the conclusion, I offer some suggestions on how we might address this problem.
{"title":"Political Standards: Accounting for Legitimacy","authors":"K. Ramanna","doi":"10.2139/ssrn.2537088","DOIUrl":"https://doi.org/10.2139/ssrn.2537088","url":null,"abstract":"I develop the notion of “thin political markets.” These are esoteric areas of market rule-making where corporate managers possess the technical expertise necessary for informed regulation, enjoy strong economic interests in the outcome, and face little political opposition. The motivating phenomenon for thin political markets is the political process of accounting rule-making. I present evidence suggesting that managers use their political and substantive advantage in thin political markets to subtly structure the rules of the game to their advantage. On one level, this action is entirely consistent with the capitalist spirit a la Milton Friedman – “The social responsibility of business is to increase its profits.” But there are serious questions as to whether such actions sustain the long-term legitimacy of market capitalism. In the conclusion, I offer some suggestions on how we might address this problem.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"3 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-11","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"130934992","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Investor-state arbitration, also called investment arbitration, is often accused of harming developing states facing economic hardship, for the benefit of a wealthy few from the Global North. Its proponents respond that it is the only available means to resolve disputes impartially, and that its increased use clarifies international law. In this article, the authors investigate the empirical manifestations of the uses and functions of investment arbitration, with an original dataset that compiles over 500 arbitration claims from 1972 to 2010. The study reveals that until the mid-to-late nineties, investment arbitration was mainly used in two ways. On the one hand, it was a neocolonial instrument to strengthen the economic interests of developed states. On the other, it was a means to impose the rule of law in non-democratic states with a weak law and order tradition. But since the mid-to-late nineties, the main function of investment arbitration has been to provide guideposts and determine rights for investors and host state, and thus to increase the predictability of the international investment regime. In doing so, however, it seems to favor the “haves” over the “have-nots”, making the international investment regime harder on poorer than on richer countries.
{"title":"Investment Arbitration: Promoting the Rule of Law or Over-Empowering Investors? A Quantitative Empirical Study","authors":"T. Schultz, C. Dupont","doi":"10.2139/ssrn.2399179","DOIUrl":"https://doi.org/10.2139/ssrn.2399179","url":null,"abstract":"Investor-state arbitration, also called investment arbitration, is often accused of harming developing states facing economic hardship, for the benefit of a wealthy few from the Global North. Its proponents respond that it is the only available means to resolve disputes impartially, and that its increased use clarifies international law. In this article, the authors investigate the empirical manifestations of the uses and functions of investment arbitration, with an original dataset that compiles over 500 arbitration claims from 1972 to 2010. The study reveals that until the mid-to-late nineties, investment arbitration was mainly used in two ways. On the one hand, it was a neocolonial instrument to strengthen the economic interests of developed states. On the other, it was a means to impose the rule of law in non-democratic states with a weak law and order tradition. But since the mid-to-late nineties, the main function of investment arbitration has been to provide guideposts and determine rights for investors and host state, and thus to increase the predictability of the international investment regime. In doing so, however, it seems to favor the “haves” over the “have-nots”, making the international investment regime harder on poorer than on richer countries.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"49 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-02-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"125935432","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article examines the explanatory potential and limitations of the use of economic models and quantitative analytic techniques in comparative law. It suggests that the incorporation of comprehensive, rigorous legal analysis in both the design of empirical models and the interpretation of quantitative results can improve the accuracy of descriptive and prescriptive conclusions by addressing concerns related to variable selection; data selection, collection, and coding; the robustness of causal claims; and appreciation (or lack thereof) for the complex roles and functions of laws and their interactions with social norms and other institutions. This article argues that, while large-scale quantitative research methods can provide valuable information to inform policy decisions and strategies, the limitations of their explanatory and predictive powers must be acknowledged and tempered by context-specific, nuanced analysis of legal rules and systems, especially when guiding reform efforts within and across countries.
{"title":"Restoring Law in Comparative Law and Economics","authors":"Lindsey Carson","doi":"10.2139/ssrn.2297660","DOIUrl":"https://doi.org/10.2139/ssrn.2297660","url":null,"abstract":"This article examines the explanatory potential and limitations of the use of economic models and quantitative analytic techniques in comparative law. It suggests that the incorporation of comprehensive, rigorous legal analysis in both the design of empirical models and the interpretation of quantitative results can improve the accuracy of descriptive and prescriptive conclusions by addressing concerns related to variable selection; data selection, collection, and coding; the robustness of causal claims; and appreciation (or lack thereof) for the complex roles and functions of laws and their interactions with social norms and other institutions. This article argues that, while large-scale quantitative research methods can provide valuable information to inform policy decisions and strategies, the limitations of their explanatory and predictive powers must be acknowledged and tempered by context-specific, nuanced analysis of legal rules and systems, especially when guiding reform efforts within and across countries.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"81 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2013-07-23","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121289968","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This article reviews recent developments in American felony disenfranchisement law. Examining several variables' impact on states' likelihood of enacting reform, I find that only initial policy severity proves a strong predictor of restriction-relaxing change, as most of the dozen states enacting such reforms in the last decade began the period with extremely restrictive policies. Entrepreneurship by African American and Democratic lawmakers has been important, but many Republicans conclude that debating disenfranchisement can be advantageous to them, as well. The Help America Vote Act has centralized administration of this policy, while local officials retain important roles. The article concludes by examining two unresolved problems: whether ineligibility follows a person moving from one state to another, and whether Congress has the constitutional authority to enfranchise former offenders. Copyright 2009, Oxford University Press.
{"title":"Criminal Disenfranchisement and the Challenge of American Federalism","authors":"Alec C. Ewald","doi":"10.1093/PUBLIUS/PJP009","DOIUrl":"https://doi.org/10.1093/PUBLIUS/PJP009","url":null,"abstract":"This article reviews recent developments in American felony disenfranchisement law. Examining several variables' impact on states' likelihood of enacting reform, I find that only initial policy severity proves a strong predictor of restriction-relaxing change, as most of the dozen states enacting such reforms in the last decade began the period with extremely restrictive policies. Entrepreneurship by African American and Democratic lawmakers has been important, but many Republicans conclude that debating disenfranchisement can be advantageous to them, as well. The Help America Vote Act has centralized administration of this policy, while local officials retain important roles. The article concludes by examining two unresolved problems: whether ineligibility follows a person moving from one state to another, and whether Congress has the constitutional authority to enfranchise former offenders. Copyright 2009, Oxford University Press.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"159 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2012-03-24","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132756429","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper discusses recent UK monetary policies as instances of Galbraith’s ‘innocent frauds’, including the idea that money is a thing rather than a relationship, the fallacy of composition that what is possible for one bank is possible for all banks, and the belief that the money supply can be controlled by reserves management. The origins of the idea of QE, and its defense when it was applied in Britain, are analysed through this lens. An empirical analysis of the effect of reserves on lending is conducted; we do not find evidence that QE ‘worked’ either by a direct effect on money spending, or through an equity market effect. These findings are placed in a historical context in a comparison with earlier money control experiments in the UK.
{"title":"Innocent Frauds Meet Goodhart’s Law in Monetary Policy","authors":"D. Bezemer, G. W. Gardiner","doi":"10.2139/ssrn.1687750","DOIUrl":"https://doi.org/10.2139/ssrn.1687750","url":null,"abstract":"This paper discusses recent UK monetary policies as instances of Galbraith’s ‘innocent frauds’, including the idea that money is a thing rather than a relationship, the fallacy of composition that what is possible for one bank is possible for all banks, and the belief that the money supply can be controlled by reserves management. The origins of the idea of QE, and its defense when it was applied in Britain, are analysed through this lens. An empirical analysis of the effect of reserves on lending is conducted; we do not find evidence that QE ‘worked’ either by a direct effect on money spending, or through an equity market effect. These findings are placed in a historical context in a comparison with earlier money control experiments in the UK.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"66 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"132047439","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
In their majority, public international lawyers postulate that for a new rule of customary law to originate, two conditions must be fulfilled: there must be consistent practice, and it must be shown that this practice is motivated by the belief that such behaviour is required in law. Maurice Mendelson (Recueil des Cours 272 (1998) 155) has challenged this view. He believes that the majority view ignores the fundamentally incomplete nature of public international law. He claims that the new rule emerges because mere practice leads to convergent expectations. This paper uses data from student experiments with a linear public good to show that behaviour con-verges even absent verbal communication; that convergence is guided by mean contributions in the previous round, which serve as an implicit norm; that freeriding on this implicit norm is re-garded as illegitimate; that cooperation can be stabilised at a high level if “reprisals” are permitted. Hence the mechanism of norm formation proposed by Maurice Mendelson is fully borne out by the experimental data.
大多数国际公法律师认为，要产生一种新的习惯法规则，必须满足两个条件:必须有一贯的做法，而且必须表明，这种做法的动机是相信这种行为是法律所要求的。莫里斯·门德尔松(Recueil des Cours 272(1998) 155)对这一观点提出了挑战。他认为，多数人的观点忽视了国际公法根本不完整的本质。他声称，新规则的出现是因为仅仅是实践就会导致预期趋同。本文使用线性公共产品的学生实验数据表明，即使没有语言交流，行为也会趋同;这种趋同是由前一轮的平均贡献指导的，这是一种隐含的规范;搭便车这种隐含的规范被认为是不合法的;如果允许“报复”，这种合作可以稳定在高水平。因此，莫里斯·门德尔松提出的规范形成机制得到了实验数据的充分证实。
{"title":"An Experimental Contribution to the Theory of Customary (International) Law","authors":"C. Engel","doi":"10.2139/ssrn.1599464","DOIUrl":"https://doi.org/10.2139/ssrn.1599464","url":null,"abstract":"In their majority, public international lawyers postulate that for a new rule of customary law to originate, two conditions must be fulfilled: there must be consistent practice, and it must be shown that this practice is motivated by the belief that such behaviour is required in law. Maurice Mendelson (Recueil des Cours 272 (1998) 155) has challenged this view. He believes that the majority view ignores the fundamentally incomplete nature of public international law. He claims that the new rule emerges because mere practice leads to convergent expectations. This paper uses data from student experiments with a linear public good to show that behaviour con-verges even absent verbal communication; that convergence is guided by mean contributions in the previous round, which serve as an implicit norm; that freeriding on this implicit norm is re-garded as illegitimate; that cooperation can be stabilised at a high level if “reprisals” are permitted. Hence the mechanism of norm formation proposed by Maurice Mendelson is fully borne out by the experimental data.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"30 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2010-04-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124656286","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper looks at the institutional set-up and the politico-economic dimension of the European Neighbourhood Policy towards Morocco from a foreign policy analysis standpoint. Thanks to its particular progress and ambition, Morocco is among the four countries whose bilateral ties with the EU are to be upgraded. As far as regards the economic and social issues of the policy, relevant progresses have been done in the practice by starting in 2008 the negotiations of an agreement on liberalizing trade in services and investments. The energy sector development is of high interest because of the strengthening of Morocco's role in the EU energy security as a country of transit in the Maghreb region. What is however striking in EU-Morocco relations is the low priority of political issues in comparison to the economic and energy related issues. An important exception to this is the area of Justice and Home Affairs, where arguably, the politics of insecurity produces policies at incomparable speed. It can be argued that not only the individual level of structural foreign policy is neglected, but also the importance of societal and inter-societal levels in effective foreign policy-making is not rightly emphasized.
{"title":"European Neighborhood Policy: A Case Study of Morocco","authors":"L. Carafa, K. Kopra","doi":"10.2139/ssrn.1158427","DOIUrl":"https://doi.org/10.2139/ssrn.1158427","url":null,"abstract":"This paper looks at the institutional set-up and the politico-economic dimension of the European Neighbourhood Policy towards Morocco from a foreign policy analysis standpoint. Thanks to its particular progress and ambition, Morocco is among the four countries whose bilateral ties with the EU are to be upgraded. As far as regards the economic and social issues of the policy, relevant progresses have been done in the practice by starting in 2008 the negotiations of an agreement on liberalizing trade in services and investments. The energy sector development is of high interest because of the strengthening of Morocco's role in the EU energy security as a country of transit in the Maghreb region. What is however striking in EU-Morocco relations is the low priority of political issues in comparison to the economic and energy related issues. An important exception to this is the area of Justice and Home Affairs, where arguably, the politics of insecurity produces policies at incomparable speed. It can be argued that not only the individual level of structural foreign policy is neglected, but also the importance of societal and inter-societal levels in effective foreign policy-making is not rightly emphasized.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"8 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2008-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"121146556","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper empirically investigates the effect of government bail-out policies on banks outside the safety net. We construct a measure of bail-out perceptions by using rating information. From there, we construct the market shares of insured competitor banks for any given bank, and analyze the impact of this variable on banks’ risk-taking behavior, using a large sample of banks from OECD countries. Our results suggest that government guarantees strongly increase the risk-taking of competitor banks. In contrast, there is no evidence that public guarantees increase the protected banks’ risk-taking, except for banks that have outright public ownership. These results have important implications for the effects of the recent wave of bank bail-outs on banks’ risk-taking behavior.
{"title":"Competition, Risk-Shifting, and Public Bail-Out Policies","authors":"R. Gropp, Hendrik Hakenes, I. Schnabel","doi":"10.2139/ssrn.965495","DOIUrl":"https://doi.org/10.2139/ssrn.965495","url":null,"abstract":"This paper empirically investigates the effect of government bail-out policies on banks outside the safety net. We construct a measure of bail-out perceptions by using rating information. From there, we construct the market shares of insured competitor banks for any given bank, and analyze the impact of this variable on banks’ risk-taking behavior, using a large sample of banks from OECD countries. Our results suggest that government guarantees strongly increase the risk-taking of competitor banks. In contrast, there is no evidence that public guarantees increase the protected banks’ risk-taking, except for banks that have outright public ownership. These results have important implications for the effects of the recent wave of bank bail-outs on banks’ risk-taking behavior.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2007-02-26","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116649447","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper makes use of regression discontinuity designs to estimate the effect of the number of legislators on the size of government. The results indicate a negative effect, i.e., the larger the size of the legislature the smaller is the size of government. This runs counter to conventional wisdom. One potential explanation is that more legislators can better control a budget maximizing bureaucracy. I present evidence that is consistent with the proposed mechanism.
{"title":"Does the Size of the Legislature Affect the Size of Government? Evidence from Two Natural Experiments","authors":"Per Pettersson-Lidbom","doi":"10.2139/ssrn.988346","DOIUrl":"https://doi.org/10.2139/ssrn.988346","url":null,"abstract":"This paper makes use of regression discontinuity designs to estimate the effect of the number of legislators on the size of government. The results indicate a negative effect, i.e., the larger the size of the legislature the smaller is the size of government. This runs counter to conventional wisdom. One potential explanation is that more legislators can better control a budget maximizing bureaucracy. I present evidence that is consistent with the proposed mechanism.","PeriodicalId":256324,"journal":{"name":"LSN: Empirical Studies (Law & Politics) (Topic)","volume":"10 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2006-01-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114963297","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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