Much political conflict in the world revolves around the issue of how much freedom to accord people. Liberal democracies are characterized by, e.g., the rule of law and a strong protection of civil rights, giving individuals a great deal of legally guaranteed freedom to lead their lives as they see fit. However, it is not known whether legal freedom suffices to make people satisfied with freedom. Our study explores that issue by relating seven indicators of legal freedom to the satisfaction people express with their freedom of choice. Using a sample of 133 countries over the period 2008-2018, and taking a panel-data approach, we find no robust baseline relationship. However, when exploring conditional associations by interacting the indicators with social trust, the rule of law is positively and increasingly related to satisfaction with freedom above and below a threshold level. Freedom of assembly is more positive for satisfaction with freedom the higher the GDP per capita and in democracies. Thus, for some types of legal freedom, formal legal institutions are complementary with culture, income and the political system in generating satisfaction with freedom.
This paper discusses the effects of one-off Motor Vehicle Registration Taxes (MVRT) and market concentration level on the profitability of multinational enterprises (MNEs) operating in the European Union motor vehicle industry. Our simple theoretical framework shows that firm profits depend on the demand function and therefore on taxes applied to prices. We overcome empirically the challenges of making informative theoretical predictions on the pass-through rate under imperfect competition. We find that MVRT,-both as ad valorem taxes and as specific taxes,-have a significant negative effect on MNEs' profitability. Our findings show a statistically significant positive effect of market concentration on profitability. Finally, our results suggest that the degree of competitiveness in the motor vehicle market moderates the effect of MVRT on firm profitability only in EU countries where the MVRT is an ad valorem tax, with the negative effect of the ad valorem MVRT becoming higher as the motor vehicle market becomes less competitive.
Prosecution of criminals is costly and subject to errors. In contrast to adversarial court procedures, in inquisitorial systems the prosecutor is regarded as an impartial investigator and an aide to the judge. We show in a sequential prosecution game of a Bayesian court that a strategic interaction between these two impartial agents exists where each player may hope to free ride on the other one´s investigative effort. This gives rise to inefficient equilibria. The model demonstrates that the effectiveness of some policy measures that intend to curb the free-riding problem critically depends on the assumed benevolence of the prosecutor. We find that, if policy makers are unable to infer the true preferences of the prosecutorial body, the high burden of proof in criminal law may reduce the probability of court errors. Our analysis, therefore, substantiates claims made in the literature that inquisitorial procedures are introduced to avoid wrongful acquittals.
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