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Behavioral Law & Economics Enforcement Mechanisms

Contents

This course is devoted to the analysis of different mechanisms of law enforcement (legal, economic, social, moral and political), both from a theoretical and from an empirical point of view. The insights from the standard economic model of crime, with its focus on legal and economic incentives, will be complemented with those coming from the analysis of social and moral determinants of crime, with a special focus on the endogenous formation of social and moral norms, on stigmatisation and on temptation, as well as on the interaction between organized crime and politics. Most of the attention will be devoted to articles denoted with a star (*) in the reading list.

Schedule and lecture notes

All classes take place in January 2021, in the Seminar Room, Piazza Scaravilli, 2 - Bologna.

  • Tue 12, 3pm-6pm: Legal enforcement of law (PDF)
    • Crime and the Legalization of Recreational Marijuana (PDF)
  • Thu 14, 3pm-6pm: Economic enforcement of law (PDF)
  • Tue 19, 3pm-6pm: Social enforcement of law (PDF)
    • Does Social Capital Reduce Crime? (PDF)
    • Crime and Social Sanction (PDF)
    • Social Closure, Surnames and Crime (PDF)
  • Thu 21, 3pm-6pm: Moral enforcement of law (PDF)
    • “Thou Shalt Not Covet”: Prohibitions, Temptation and Moral Values (PDF)
  • Tue 26, 3pm-6pm: Political enforcement of law and organized crime (PDF)
    • Resource Curse in the Origins of the Sicilian Mafia (PDF)
    • Organized Crime and Electoral Outcomes (PDF)
    • Terrorism Risk and Democratic Preferences in Pakistan (PDF)

Prerequisites
Knowledge of Game Theory and Micro-econometrics is helpful to better understand the theoretical and empirical parts of the course, although the basic tools will be explained, at least at an intuitive level, along the way.

Learning outcomes
The aim of the course is to provide instruments to (i) understand this segment of literature, (ii) identify interesting questions and (iii) manage the theoretical and empirical tools to tackle such questions.

Assessment methods 
Students are required to write a research proposal, and send it by email to the instructor (paolo.vanin@unibo.it) by 23 February 2021. The proposal should identify a research question, explain why it is interesting and relevant, articulate the intended way of addressing it, theoretically or empirically, address the feasibility of the proposed method, and explain the expected results, the expected contribution to the relevant literature and the possible policy implications (if any).

Teaching methods
Each class will develop one topic, presenting classic and recent contributions from the literature and discussing both results, methodological problems and research possibilities. 

Teaching tools
All materials will be published on the course webpage.

Office hours 
Wednesday, 12:00-13:00, or by appointment.

Office: Piazza Scaravilli 2, Room 227, Second floor
Tel. 051 – 209 8120
Email: paolo.vanin@unibo.it
Webpage: https://sites.google.com/site/paolovanin/home

Reading list

(* denotes required readings)

Legal enforcement of law

  • * Becker, G. (1968). Crime and Punishment: An Economic Approach. Journal of Political Economy 76:169–217.
  • * Ehrlich, I. (1973). Participation in Illegitimate Activities: A Theoretical and Empirical Investigation. Journal of Political Economy 81:521–65.
  • Sah, R. (1991). Social osmosis and patterns of crime. Journal of Political Economy 99(6): 1272-1295.
  • Corman, H., and N. Mocan (2000). A Time-Series Analysis of Crime, Deterrence, and Drug Abuse in New York City. American Economic Review 90 (3), 584-604.
  • * Polinsky, M. A. and S. Shavell (2000). The economic theory of public enforcement of law. Journal of Economic Literature 38 (1), 45-76.
  • Buonanno, P., F. Drago, R. Galbiati and G. Zanella (2011). Crime in Europe and in the United States: Dissecting the 'Reversal of Misfortunes'. Economic Policy 26 (67), 347-385.
  • Dills, A. K., J. A. Miron, and G. Summers (2010). What Do Economists Know About Crime? In The Economics of Crime: Lessons for and from Latin America, NBER, 269-302
  • Jacob, B., L. Lefgren and E. Moretti (2007). The Dynamics of Criminal Behavior: Evidence from Weather Shocks. Journal of Human Resources 42 (3), 489-527.
  • Di Tella, R., and E. Schargrodsky (2004). Do Police Reduce Crime? Estimates Using the Allocation of Police Forces after a Terrorist Attack. American Economic Review 94 (1), 115-133.
  • Draca, M., S. Machin and R. Witt (2011). Panic on the Streets of London: Police, Crime, and the July 2005 Terror Attacks. American Economic Review 101(5), 2157-2181.
  • Barbarino, A., and G. Mastrobuoni (2014). The Incapacitation Effect of Incarceration: Evidence From Several Italian Collective Pardons. American Economic Journal: Economic Policy 6 (1), 1-37.
  • Buonanno, P., and S. Raphael (2013). Incarceration and Incapacitation: Evidence from the 2006 Italian Collective Pardon. American Economic Review 103 (6), 2437-2465.
  • Adda, J., B. McConnell and I. Rasul (2014). Crime and the Depenalization of Cannabis Possession: Evidence from a Policing Experiment. Journal of Political Economy 122 (5), 1130-1202.
  • Dragone, D., G. Prarolo, P. Vanin and G. Zanella (2018). Crime and the Legalization of Recreational Marijuana. Journal of Economic Behavior & Organization, in press.

 

Economic enforcement of law

  • Murphy, K., A. Shleifer and R. Vishny (1993). Why is rentseeking so costly to growth? American Economic Review83(2): 409-414.* Imrohoroglu, A., A. Merlo and P. Rupert (2000). On the Political Economy of Income Redistribution and Crime. International Economic Review 41(1), 1-25.
  • Raphael, S. and R. Winter-Ebmer (2001). Identifying the effect of unemployment on crime. Journal of Law & Economics 44 (1), 259-284.
  • Gould, E., B. Weinberg and D. Mustard (2002). Crime and Local Labor Market Opportunities in the United States: 1979-1997. The Review of Economics and Statistics 87(3), 411- 422.
  • Burdett, K., R. Lagos and R. Wright (2003). Crime, Inequality, and Unemployment. American Economic Review 93(5), 1764-1777.
  • Lochner, L., and E. Moretti (2004). The Effect of Education on Criminal Activity: Evidence from Prison Inmates, Arrests and Self-Reports. American Economic Review 94(1), 155-189.
  • Imrohoroglu, A., A. Merlo and P. Rupert (2004). What Accounts for the Decline in Crime? International Economic Review 3(08): 707-729
  • Ludwig, J., G. Duncan and P. Hirschfield (2001). Urban Poverty and Juvenile Crime: Evidence from a Randomized Housing-Mobility Experiment. Quarterly Journal of Economics 116, 87–130.
  • Lin, M.-J. (2008). Does Unemployment Increase Crime? Evidence from U.S. Data 1974–2000. Journal of Human Resources 43(2), 413-436.
  • Fougère, D., F. Kramarz and J. Pouget (2009). Youth Unemployment and Crime in France. Journal of the European Economic Association 7(5), 909-938.
  • Mocan, N., T. Bali (2010). Asymmetric Crime Cycles. Review of Economics and Statistics 92(4), 899-911.
  • Buonanno, P., and J.F. Vargas (2018). Inequality, Crime, and the Long Run Legacy of Slavery. Journal of Economic Behavior & Organization, forthcoming.
  • Abadie, A., M. C. Acevedo, M. Kugler and J. Vargas (2014). Inside the War on Drugs: Effectiveness and Unintended Consequences of a Large Illicit Crops Eradication Program in Colombia. Mimeo, Harvard University.
  • Chioda, L., J. M. P. De Mello and R. Soares (2016). Spillovers from Conditional Cash Transfer Programs: Bolsa Família and Crime in Urban Brazil. Economics of Education Review 54(C), 306-320.

 

Social enforcement of law

THEORY

  • Rasmusen, E. (1996). Stigma and Self-Fulfilling Expectations of Criminality. Journal of Law and Economics 39:519–44.
  • Posner, R. (1997). Social norms and the law: An economic approach. American Economic Review 87 (2), 365-369.
  • Lindbeck, A., S. Nyberg and J. Weibull (1999). Social Norms and Economic Incentives in the Welfare State. The Quarterly Journal of Economics 114, 1-35.
  • Furuya, K. (2002). A Socio-Economic Model of Stigma and Related Social Problems. Journal of Economic Behavior & Organization 48(3), 281-290.
  • Blume, L. (2003). Stigma and Social Control. Game Theory and Information 0312002, EconWPA.
  • Silverman, D. (2004). Street Crime and Street Culture. International Economic Review 45:761–86.
  • Calvó-Armengol, A., and Y. Zenou (2004). Social Networks and Crime Decisions: The Role of Social Structure in Facilitating Delinquent Behavior. International Economic Review 45:939–58.
  • Funk, P. (2004). On the effective use of stigma as a crime deterrent. European Economic Review 48 (4), 715-728.
  • Weibull, J., and E. Villa (2005). Crime, Punishment and Social Norms. SSE/EFI Working Paper 610. Stockholm School of Economics, Stockholm.
  • Calvó-Armengol, A., T. Verdier and Y. Zenou (2007). Strong and Weak Ties in Employment and Crime. Journal of Public Economics 91:203–33.

 

EMPIRICS

  • * Case, A., and L. Katz (1991). The Company You Keep: The Effects of Family and Neighborhood on Disadvantaged Youths. NBER Working Paper No. 3705.
  • Sherman, L., D. Smith, J. Schmidt and D. Rogan (1992). Crime, punishment, and stake in conformity: Legal and informal control of domestic violence. American Sociological Review 57 (5), 680-690.
  • Glaeser, E., B. Sacerdote, and J. Scheinkman (1996). Crime and Social Interactions. Quarterly Journal of Economics 111:507–48.
  • * Glaeser, E., and B. Sacerdote (1999). Why is there more crime in cities? The Journal of Political Economy 107 (6/2), 225-258.
  • Levitt, S., and S. Venkatesh (2000). An Economic Analysis of a Drug-Selling Gang’s Finances. Quarterly Journal of Economics 115:755–89.
  • * Donohue, J., and S. Levitt (2001). The Impact of Legalized Abortion on Crime. Quarterly Journal of Economics 116(2), 379-420.
  • * Kling, J., J. Ludwig and L. Katz (2005). Neighborhood Effects on Crime for Female and Male Youth: Evidence from a Randomized Housing Voucher Experiment. Quarterly Journal of Economics 120:87–130.
  • Heaton, P. (2006). Does Religion Really Reduce Crime? Journal of Law and Economics 49:147–72.
  • * Buonanno, P., D. Montolio and P. Vanin (2009). Does Social Capital Reduce Crime? Journal of Law and Economics 52(1): 145-170.
  • Galiani, S., M. Rossi and E. Schargrodsky (2011). Conscription and Crime: Evidence from the Argentine Draft Lottery. American Economic Journal: Applied Economics, 3(2), 119-36.
  • * Buonanno, P., M. Bianchi and P. Pinotti (2012). Do Immigrants Cause Crime? Journal of the European Economic Association, 10(6): 1318-1347.
  • Pinotti, P. (2017). Clicking on Heaven's Door: The Effect of Immigrant Legalization on Crime. American Economic Review, 107 (1): 138-68.
  • * Buonanno, P., G. Pasini and P. Vanin (2012). Crime and Social Sanction. Papers in Regional Science, 91(1), 193-218.
  • Galbiati, R., and G. Zanella (2012). The Tax Evasion Social Multiplier: Evidence from Italy. Journal of Public Economics, 96(5-6), 485–494.
  • Mastrobuoni, G. (2015). The Value of Connections: Evidence from the Italian-American Mafia. Economic Journal, 125(586), F256–F288.
  • Buonanno, P., and P. Vanin (2017). Social Closure, Surnames and Crime. Journal of Economic Behavior & Organization, 137, 160-175.

 

Moral enforcement of law

  • Frank, R. (1987). If Homo Economicus Could Choose His Own Utility Function, Would He Want One with a Conscience? American Economic Review 77(4), 593-604.
  • Gottfredson, M., and T. Hirschi (1990). A General Theory of Crime. Stanford University Press.
  • * Bisin, A., and T. Verdier (2001). The Economics of Cultural Transmission and the Evolution of Preferences. Journal of Economic Theory 97(2), 298-319.
  • Gul, F., and W. Pesendorfer (2001). Temptation and Self-Control. Econometrica 69(6), 1403-1435.
  • Halpern, D. (2001). Moral Values, Social Trust and Inequality. British Journal of Criminology 41 (2), 236-251.
  • Marcus, B. (2004). Self-Control in the General Theory of Crime: Theoretical Implications of a Measurement Problem. Theoretical Criminology 8(1), 33-55.
  • Hughes, P. (2006). Temptation, Culpability and the Criminal Law. Journal of Social Philosophy 37 (2), 221-232.
  • Conley, J., and P. Wang (2006). Crime and Ethics. Journal of Urban Economics 60(1), 107-123.
  • Lindbeck, A., and S. Nyberg (2006). Raising Children to Work Hard: Altruism, Work Norms and Social Insurance. Quarterly Journal of Economics 121(4), 1473-1503.
  • * Kaplow, L., and S. Shavell (2007). Moral Rules, the Moral Sentiments, and Behavior: Toward a Theory of an Optimal Moral System. Journal of Political Economy 115(3), 494-514.
  • Coricelli, G., M. Joffily, C. Montmarquette and M.-C. Villeval (2007). Tax Evasion: Cheating Rationally or Deciding Emotionally? IZA Discussion Papers 3103.
  • Tabellini, G. (2008). The Scope of Cooperation: Values and Incentives. The Quarterly Journal of Economics, 123.
  • Curry, P., and S. Mongrain (2008). What You Don't See Can't Hurt You: An Economic Analysis of Morality Laws. Canadian Journal of Economics 41(2), 583-594.
  • McCullough, M., and B. Willoughby (2009). Religion, Self-Regulation, and Self-Control: Associations, Explanations, and Implications. Psychological Bulletin 135(1), 69-93.
  • Adriani, F., and S. Sonderegger (2009). Why do Parents Socialize their Children to Behave Pro-Socially? An Information-Based Theory. Journal of Public Economics 93 (11-12), 1119-1124.
  • * Corneo, G., and O. Jeanne (2009). A Theory of Tolerance. Journal of Public Economics 93(5-6), 691-702.
  • Fehr, E. (2009). On The Economics and Biology of Trust. Journal of the European Economic Association, 7(2-3), 235-266.
  • Corneo, G., and O. Jeanne (2010). Symbolic values, occupational choice, and economic development. European Economic Review 54(2), 237-251.
  • Cervellati, M., J. Esteban and L. Kranich (2010). Work Values, Endogenous Sentiments and Redistribution. Journal of Public Economics 94, 612-627.
  • Coricelli, G., Joffily, M., Montmarquette, C., and Villeval M-C (2010). Cheating, Emotions, and Rationality: An Experiment on Tax Evasion. Journal of Experimental Economics 13, 226-247.
  • Zak, P. (2011). The physiology of moral sentiments. Journal of Economic Behavior & Organization, 77(1), 53-65.
  • Cubitt, R., M. Drouvelis, S. Gächter, R. Kabalin (2011). Moral judgments in social dilemmas: How bad is free riding? Journal of Public Economics 95, 253-264.
  • Fershtman, C., U. Gneezy, and M. Hoffman (2011). Taboos and Identity: Considering the Unthinkable. American Economic Journal: Microeconomics 3(2), 139-164.
  • * Dal Bó, E., and M. Terviö (2013). Self-Esteem, Moral Capital, and Wrongdoing. Journal of the European Economic Association 11(3), 599-663.
  • * Cervellati, M., and P. Vanin (2013). “Thou Shalt Not Covet”: Prohibitions, Temptation and Moral Values, Journal of Public Economics, 103, 15-28.
  • * Dal Bó, E., and P. Dal Bó (2014). Do the Right Thing: The Effects of Moral Suasion on Cooperation. Journal of Public Economics, 117: 28-38.
  • Doepke, M., and F. Zilibotti (2017). Parenting with style: Altruism and paternalism in intergenerational preference transmission. Econometrica, 85(5), 1331-1371.

 

Political enforcement of law and organized crime

  • Kugler, M., T. Verdier and Y. Zenou (2005). Organized crime, corruption and punishment. Journal of Public Economics 89 (9-10), 1639-1663.
  • * Dal Bó, E., P. Dal Bó and R. Di Tella (2006). “Plata o Plomo?”: Bribe and Punishment in a Theory of Political Influence. American Political Science Review, 100(01), 41-53.
  • Konrad, K. A., and S. Skaperdas (2012). The Market for Protection and the Origin of the State. Economic Theory, 50(2), 417-443.
  • Acemoglu, D., J. A. Robinson and R. J. Santos (2013). The monopoly of violence: Evidence from Colombia. Journal of the European Economic Association, 11(s1), 5-44.
  • * Buonanno, P., R. Durante, G. Prarolo and P. Vanin (2015). Poor Institutions, Rich Mines: Resource Curse in the Origins of the Sicilian Mafia. Economic Journal, 125(586), F175-F202.
  • Pinotti, P. (2015). The economic cost of organized crime: evidence from Southern Italy. Economic Journal 125(586), F203–F232.
  • Barone, G. and G. Narciso (2015). Organized crime and business subsidies: Where does the money go? Journal of Urban Economics 86(C), 98-110.
  • Daniele, G. and B. Geys (2015). Organized crime, institutions and political quality: empirical evidence from Italian municipalities. Economic Journal 125 (586), F233–F255.
  • Buonanno, P., G. Prarolo and P. Vanin (2016). Organized Crime and Electoral Outcomes: Evidence from Sicily at the Turn of the XXI Century. European Journal of Political Economy, 41, 61-74.
  • Alesina, A., S. Piccolo and P. Pinotti (2016). Organized crime, violence, and politics. NBER Working Paper w22093.
  • De Luca, G. D. and G. De Feo (2017). Mafia in the ballot box. American Economic Journal: Economic Policy, in press.
  • Daniele, G. and G. Dipoppa (2017). Mafia, elections and violence against politicians. Journal of Public Economics, 154:10–33.
  • Rehman, F. U. and P. Vanin (2017). Terrorism Risk and Democratic Preferences in Pakistan, Journal of Development Economics, 124, 95-106.
  • Piccolo, S. and G. Immordino (2017). Organised Crime, Insider Information and Optimal Leniency. Economic Journal, 127(606), 2504-2524.
  • Acemoglu, D., G. De Feo, and G. De Luca (2020). Weak States: Causes and Consequences of the Sicilian Mafia. Review of Economic Studies, forthcoming.
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