In this article, I present a partisan theory of agency enforcement and empirically investigate the possibility of partisan bias in the enforcement of the federal securities laws. Leveraging plausibly exogenous shocks to partisan control of the U.S. Securities and Exchange Commission (SEC), I find evidence that a firm’s partisan alignment with the SEC substantially reduces the likelihood of enforcement. For a firm that is ex ante equally likely to be targeted for enforcement or not, my estimates indicate that a typical increase in partisan alignment following a change in party control of the SEC reduces the likelihood of enforcement by over 19%. Partisan alignment also appears to reduce aggregate monetary sanctions, though these estimates are less certain. By contrast, I find little evidence of partisan bias in the initial opening of investigations. These findings suggest there may be meaningful partisan bias in SEC enforcement and have important implications for democratic governance. (JEL D73, K22, K23, K41, K42, P00)
{"title":"Partisan bias in securities enforcement","authors":"Reilly S Steel","doi":"10.1093/jleo/ewae019","DOIUrl":"https://doi.org/10.1093/jleo/ewae019","url":null,"abstract":"In this article, I present a partisan theory of agency enforcement and empirically investigate the possibility of partisan bias in the enforcement of the federal securities laws. Leveraging plausibly exogenous shocks to partisan control of the U.S. Securities and Exchange Commission (SEC), I find evidence that a firm’s partisan alignment with the SEC substantially reduces the likelihood of enforcement. For a firm that is ex ante equally likely to be targeted for enforcement or not, my estimates indicate that a typical increase in partisan alignment following a change in party control of the SEC reduces the likelihood of enforcement by over 19%. Partisan alignment also appears to reduce aggregate monetary sanctions, though these estimates are less certain. By contrast, I find little evidence of partisan bias in the initial opening of investigations. These findings suggest there may be meaningful partisan bias in SEC enforcement and have important implications for democratic governance. (JEL D73, K22, K23, K41, K42, P00)","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"182 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-08-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"142218329","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}
Scholars since Hume and Smith have debated possible causal connections between market experiences and moral beliefs. Here, we study the impact of market interactions on utilitarian versus deontological values, charitable donations, and whether individuals have differential in-group/out-group moral views. We randomly assign workers residing across several nations of varying income levels to different market conditions and found that, in low-income nations, tournament-based compensation increased deontological commitments, especially toward out-group members, and donations by productive workers, but decreased donations by less productive workers. In higher-income nations, the effect on deontological commitments reversed, while effects on out-group attitudes and donations became insignificant. These findings suggest that if utilitarian attitudes lead to more market-oriented policies, then multiple steady states arise wherein some countries sustain high levels of utilitarian attitudes and economic growth alongside progressively weakening deontological commitments and interpersonal regard for others, putting economic rationality and liberal moral development at odds.
{"title":"Markets and morality: how markets shape our (dis)regard for others","authors":"Daniel L Chen, Eric Reinhart","doi":"10.1093/jleo/ewae016","DOIUrl":"https://doi.org/10.1093/jleo/ewae016","url":null,"abstract":"Scholars since Hume and Smith have debated possible causal connections between market experiences and moral beliefs. Here, we study the impact of market interactions on utilitarian versus deontological values, charitable donations, and whether individuals have differential in-group/out-group moral views. We randomly assign workers residing across several nations of varying income levels to different market conditions and found that, in low-income nations, tournament-based compensation increased deontological commitments, especially toward out-group members, and donations by productive workers, but decreased donations by less productive workers. In higher-income nations, the effect on deontological commitments reversed, while effects on out-group attitudes and donations became insignificant. These findings suggest that if utilitarian attitudes lead to more market-oriented policies, then multiple steady states arise wherein some countries sustain high levels of utilitarian attitudes and economic growth alongside progressively weakening deontological commitments and interpersonal regard for others, putting economic rationality and liberal moral development at odds.","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"20 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-30","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141864003","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}
Recent years have seen increased interest in gender diversity within corporate America. CEOs’ political preferences have been shown to influence many corporate decisions. Evidence suggests that views on gender equality align more with political preferences than an individual’s gender. We investigate if CEOs’ political leanings correlate with female representation and compensation in the executive suite. We discover that Democratic CEOs (those donating more to Democratic candidates) correlate with greater female presence in the executive suite. Using an event-study method, we find replacing a Republican with a Democratic CEO leads to a 20%–50% rise in executive suite female representation. Additionally, Democratic CEOs significantly reduce, or eliminate, the gender pay gap in executive compensation levels and performance sensitivity.
{"title":"Politics and gender in the executive suite","authors":"Alma Cohen, Moshe Hazan, David Weiss","doi":"10.1093/jleo/ewae011","DOIUrl":"https://doi.org/10.1093/jleo/ewae011","url":null,"abstract":"Recent years have seen increased interest in gender diversity within corporate America. CEOs’ political preferences have been shown to influence many corporate decisions. Evidence suggests that views on gender equality align more with political preferences than an individual’s gender. We investigate if CEOs’ political leanings correlate with female representation and compensation in the executive suite. We discover that Democratic CEOs (those donating more to Democratic candidates) correlate with greater female presence in the executive suite. Using an event-study method, we find replacing a Republican with a Democratic CEO leads to a 20%–50% rise in executive suite female representation. Additionally, Democratic CEOs significantly reduce, or eliminate, the gender pay gap in executive compensation levels and performance sensitivity.","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"26 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-07-12","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"141614253","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 studies the spillover effects of an Italian anti-corruption measure targeting municipalities colluding with organized crime. We assess its impact on neighboring municipalities’ procurement practices. Our findings reveal that neighboring municipalities increase contracts falling below the 40,000 Euro threshold, which bear lighter evidentiary requirements, and are consequently harder to monitor. The neighboring municipalities strategically evade stricter regulations by fragmenting major projects into different sub-threshold contracts. Our analysis presents three evidence that this response stems from greater law enforcement monitoring. First, the number of arrests increases in the area after the implementation of the measure. Then, we demonstrate that the spillovers are more pronounced in areas with greater prior law enforcement activity. Lastly, we illustrate how neighboring municipalities react to the dissolution by reducing their engagement in activities that are more susceptible to monitoring. This is evident in their decreased participation in renegotiating public works contracts (JEL D730, H570, K420).
{"title":"Sweeping the dirt under the rug: measuring spillovers of an anti-corruption measure","authors":"Andrea Tulli","doi":"10.1093/jleo/ewae009","DOIUrl":"https://doi.org/10.1093/jleo/ewae009","url":null,"abstract":"This article studies the spillover effects of an Italian anti-corruption measure targeting municipalities colluding with organized crime. We assess its impact on neighboring municipalities’ procurement practices. Our findings reveal that neighboring municipalities increase contracts falling below the 40,000 Euro threshold, which bear lighter evidentiary requirements, and are consequently harder to monitor. The neighboring municipalities strategically evade stricter regulations by fragmenting major projects into different sub-threshold contracts. Our analysis presents three evidence that this response stems from greater law enforcement monitoring. First, the number of arrests increases in the area after the implementation of the measure. Then, we demonstrate that the spillovers are more pronounced in areas with greater prior law enforcement activity. Lastly, we illustrate how neighboring municipalities react to the dissolution by reducing their engagement in activities that are more susceptible to monitoring. This is evident in their decreased participation in renegotiating public works contracts (JEL D730, H570, K420).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"5 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-04-27","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140809567","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}
Marco Fabbri, Giuseppe Dari-Mattiacci, Matteo Rizzolli
Why are impartial institutions such as formalized property rights so important for the emergence of impersonal trade? Previous literature has stressed the role of such institutions in providing third-party enforcement to shield strangers from locals’ opportunism. We document the existence of a second mechanism based on the role of formalized property rights in inducing respect for the property of strangers, regardless of enforcement. Ten years after the randomized introduction of formal property rights across rural Benin, we conducted a taking-dictator-game experiment in which participants could appropriate the endowment of an anonymous stranger from a different village. Even if enforcement institutions are absent and peer effects are silenced by design, participants from villages where the reform was implemented took significantly less than those in control villages. We further give consideration to several possible transmission channels and discuss their plausibility (JEL: D02, D91, K11, K42).
{"title":"Strangers’ property","authors":"Marco Fabbri, Giuseppe Dari-Mattiacci, Matteo Rizzolli","doi":"10.1093/jleo/ewae007","DOIUrl":"https://doi.org/10.1093/jleo/ewae007","url":null,"abstract":"Why are impartial institutions such as formalized property rights so important for the emergence of impersonal trade? Previous literature has stressed the role of such institutions in providing third-party enforcement to shield strangers from locals’ opportunism. We document the existence of a second mechanism based on the role of formalized property rights in inducing respect for the property of strangers, regardless of enforcement. Ten years after the randomized introduction of formal property rights across rural Benin, we conducted a taking-dictator-game experiment in which participants could appropriate the endowment of an anonymous stranger from a different village. Even if enforcement institutions are absent and peer effects are silenced by design, participants from villages where the reform was implemented took significantly less than those in control villages. We further give consideration to several possible transmission channels and discuss their plausibility (JEL: D02, D91, K11, K42).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"37 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-03-07","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"140073593","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}
We investigate how transfers of military equipment in the United States through the 1033 Program impact the electoral performance of sheriffs that receive a significant share of equipment while directly accountable to voters. To address this question, we have compiled a unique dataset covering 7281 sheriff elections in 2714 counties between 2006 and 2016. Our findings indicate that an increase in military transfers to the sheriff’s office, from no transfers to the 25th percentile, increases the probability of the incumbent being reelected by 5.8–12.5 percentage points. This is due to an increase in the number of votes cast for the incumbent while there is no effect on the total number of voters participating in the election. Our heterogeneity results demonstrate that voters tend to reward military equipment transfers, especially when local newspapers are present and in Republican-leaning small counties, providing novel insights into voter responsiveness in local elections (JEL D72, H56, H76, K42).
{"title":"Police militarization and local sheriff elections","authors":"Christos Mavridis, Orestis Troumpounis, Maurizio Zanardi","doi":"10.1093/jleo/ewae004","DOIUrl":"https://doi.org/10.1093/jleo/ewae004","url":null,"abstract":"We investigate how transfers of military equipment in the United States through the 1033 Program impact the electoral performance of sheriffs that receive a significant share of equipment while directly accountable to voters. To address this question, we have compiled a unique dataset covering 7281 sheriff elections in 2714 counties between 2006 and 2016. Our findings indicate that an increase in military transfers to the sheriff’s office, from no transfers to the 25th percentile, increases the probability of the incumbent being reelected by 5.8–12.5 percentage points. This is due to an increase in the number of votes cast for the incumbent while there is no effect on the total number of voters participating in the election. Our heterogeneity results demonstrate that voters tend to reward military equipment transfers, especially when local newspapers are present and in Republican-leaning small counties, providing novel insights into voter responsiveness in local elections (JEL D72, H56, H76, K42).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"43 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139947578","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}
While most social sciences confronted data sharing, transparency, and reproducibility sometime in the last two decades, the legal academy has largely been absent from these discussions. In this study, we examine the degree to which the information underlying empirical studies is available. Using an original dataset of every empirical study published in top law journals from 2010 to 2022, we find that 15% have a dataset that is readily available. We compare these low rates with a dataset of every empirical article published in the top economics, political science, and interdisciplinary journals from 2018 to 2022. The vast majority of these articles (99%) make their data available. Additional analysis demonstrates that disciplinary norms enforced by journals drive when authors make their data available. Given the discrepancy between law and other social sciences, we advocate for a disciplinary and cultural shift in law that embraces data accessibility and identify concrete steps to improve data availability. (JEL K00, K1, K10)
{"title":"Legal research as a collective enterprise: an examination of data availability in empirical legal scholarship","authors":"Abigail A Matthews, Jason Rantanen","doi":"10.1093/jleo/ewae001","DOIUrl":"https://doi.org/10.1093/jleo/ewae001","url":null,"abstract":"While most social sciences confronted data sharing, transparency, and reproducibility sometime in the last two decades, the legal academy has largely been absent from these discussions. In this study, we examine the degree to which the information underlying empirical studies is available. Using an original dataset of every empirical study published in top law journals from 2010 to 2022, we find that 15% have a dataset that is readily available. We compare these low rates with a dataset of every empirical article published in the top economics, political science, and interdisciplinary journals from 2018 to 2022. The vast majority of these articles (99%) make their data available. Additional analysis demonstrates that disciplinary norms enforced by journals drive when authors make their data available. Given the discrepancy between law and other social sciences, we advocate for a disciplinary and cultural shift in law that embraces data accessibility and identify concrete steps to improve data availability. (JEL K00, K1, K10)","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"1 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139750917","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}
We present a model of the formation and evolution of organizational culture and its effect on performance. The analysis reveals circumstances under which, because of cultural externalities, excessive polarization or, alternatively, homogeneity may result, indicating inter alia an important role for the performance of managing cultural diversity in organizations. The exhibited framework can be useful in dissecting how different aspects of cultural diversity and the nature of management–workers’ interactions affect organizational functioning (JEL D02, D23, M54, Z13).
{"title":"Organizational Culture: Structure and Evolution","authors":"Mark Gradstein","doi":"10.1093/jleo/ewae008","DOIUrl":"https://doi.org/10.1093/jleo/ewae008","url":null,"abstract":"We present a model of the formation and evolution of organizational culture and its effect on performance. The analysis reveals circumstances under which, because of cultural externalities, excessive polarization or, alternatively, homogeneity may result, indicating inter alia an important role for the performance of managing cultural diversity in organizations. The exhibited framework can be useful in dissecting how different aspects of cultural diversity and the nature of management–workers’ interactions affect organizational functioning (JEL D02, D23, M54, Z13).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"306 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139750912","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}
Georgios Efthyvoulou, Harry Pickard, Vincenzo Bove
We explore the effect of terrorism on individuals’ perceptions about national identity in the context of Great Britain, where national and supranational identities overlap. We find that exposure to terrorist attacks strengthens identification with Britain but has no effect on identification with its constituent nations. The estimated effects last for about 45 days, but subside over time as the threat fades away. We also find that exposure to terrorism leads to more positive attitudes toward the European Union, providing further support for the emergence of a supranational-unity effect. Overall, our results differ from numerous previous studies on how violence reinforces “hardline beliefs,” exacerbating nativism and “narrow” forms of solidarity (JEL D70; F50; Z10).
{"title":"Terrorist violence and the fuzzy frontier: national and supranational identities in Britain","authors":"Georgios Efthyvoulou, Harry Pickard, Vincenzo Bove","doi":"10.1093/jleo/ewae003","DOIUrl":"https://doi.org/10.1093/jleo/ewae003","url":null,"abstract":"We explore the effect of terrorism on individuals’ perceptions about national identity in the context of Great Britain, where national and supranational identities overlap. We find that exposure to terrorist attacks strengthens identification with Britain but has no effect on identification with its constituent nations. The estimated effects last for about 45 days, but subside over time as the threat fades away. We also find that exposure to terrorism leads to more positive attitudes toward the European Union, providing further support for the emergence of a supranational-unity effect. Overall, our results differ from numerous previous studies on how violence reinforces “hardline beliefs,” exacerbating nativism and “narrow” forms of solidarity (JEL D70; F50; Z10).","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"11 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-02-16","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139750904","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}
Infringement of intellectual property seems to be much more common than infringement of physical property. Intellectual property rights protect goods that are non-rival in consumption, while physical property rights protect rival goods. Nonrivalry implies that the owner suffers no direct harm from infringement. This could explain lower respect for property rights in nonrival goods. To test this hypothesis, we isolate the dimension of rivalry in an experiment. We develop a theft game that offers plausible deniability and minimizes experimenter demand. We find no evidence, either in behavior or in social norms, that participants’ respect for nonrival goods is lower than for rival goods. This suggests that the widespread infringement of intellectual property rights is not due to their nonrival nature. We examine this result in a vignette study and find that stealing a nonrival good is more socially acceptable when the user’s valuation is below the price of the good.
{"title":"Intrinsic adherence to law: physical versus intellectual property","authors":"Stefan Bechtold, Gabriel Gertsch, Martin Schonger","doi":"10.1093/jleo/ewad030","DOIUrl":"https://doi.org/10.1093/jleo/ewad030","url":null,"abstract":"Infringement of intellectual property seems to be much more common than infringement of physical property. Intellectual property rights protect goods that are non-rival in consumption, while physical property rights protect rival goods. Nonrivalry implies that the owner suffers no direct harm from infringement. This could explain lower respect for property rights in nonrival goods. To test this hypothesis, we isolate the dimension of rivalry in an experiment. We develop a theft game that offers plausible deniability and minimizes experimenter demand. We find no evidence, either in behavior or in social norms, that participants’ respect for nonrival goods is lower than for rival goods. This suggests that the widespread infringement of intellectual property rights is not due to their nonrival nature. We examine this result in a vignette study and find that stealing a nonrival good is more socially acceptable when the user’s valuation is below the price of the good.","PeriodicalId":501404,"journal":{"name":"The Journal of Law, Economics, and Organization","volume":"7 1","pages":""},"PeriodicalIF":0.0,"publicationDate":"2024-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"139509532","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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