cssi/SciSciGPT-SciSciNet huggingface dataset:
HARMFUL TAX COMPETITION

European governments are currently engaged in an assault on tax havens, to stamp out what they call ‘unfair tax competition.’ This article examines and rejects the arguments they use to justify this action and shows that tax competition is (like all forms of competition) beneficial, except perhaps as practised by European governments themselves.
Asset Pricing at the Millennium

This paper surveys the field of asset pricing. The emphasis is on the interplay between theory and empirical work and on the trade-off between risk and return. Modern research seeks to understand the behavior of the stochastic discount factor ~SDF! that prices all assets in the economy. The behavior of the term structure of real interest rates restricts the conditional mean of the SDF, whereas patterns of risk premia restrict its conditional volatility and factor structure. Stylized facts about interest rates, aggregate stock prices, and cross-sectional patterns in stock returns have stimulated new research on optimal portfolio choice, intertemporal equilibrium models, and behavioral finance. This paper surveys the field of asset pricing. The emphasis is on the interplay between theory and empirical work. Theorists develop models with testable predictions; empirical researchers document “puzzles”—stylized facts that fail to fit established theories—and this stimulates the development of new theories. Such a process is part of the normal development of any science. Asset pricing, like the rest of economics, faces the special challenge that data are generated naturally rather than experimentally, and so researchers cannot control the quantity of data or the random shocks that affect the data. A particularly interesting characteristic of the asset pricing field is that these random shocks are also the subject matter of the theory. As Campbell, Lo, and MacKinlay ~1997, Chap. 1, p. 3! put it: What distinguishes financial economics is the central role that uncertainty plays in both financial theory and its empirical implementation. The starting point for every financial model is the uncertainty facing investors, and the substance of every financial model involves the impact of uncertainty on the behavior of investors and, ultimately, on mar
Market discipline and conflicts of interest between banks and pension funds

Abstract We study the behavior of private pension funds as large depositors in a banking system. Using panel data analysis, we examine whether, and if so how, pension funds influence market discipline in Argentina in the period 1998–2001. We find that the disciplining role of pension funds depends on whether or not banks are connected to the pension fund industry through ownership of pension fund management companies. We find evidence that pension funds exert market discipline on unconnected banks but not on connected ones. On balance, pension funds undermine market discipline in the banking system as a result of conflicts of interest. We conclude that regulations aimed at averting these conflicts can enhance market discipline.
Regulating prices for shifting between service providers

Abstract The price that a regulated access provider charges for shifting customers between service providers has significant welfare implications. Typical regulatory approaches to pricing, such as pricing based on fully allocated cost or incremental cost, ignore the characteristics of consumer demand. A theoretical alternative, Ramsey pricing, considers only the elasticity of demand for given products. This paper directs attention to the competitive process. Using US long-distance telephone services as an example, this paper shows how empirical evidence concerning customer acquisition costs, customer switching costs, and churn among service providers can help to inform price regulation.
Asymptotic Analysis of Spectral Properties of Finite Capacity Processor Shared Queues

We consider sojourn (or response) times in processor-shared queues that have a finite customer capacity. Computing the response time of a tagged customer involves solving a finite system of linear ODEs. Writing the system in matrix form, we study the eigenvectors and eigenvalues in the limit as the size of the matrix becomes large. This corresponds to finite capacity models where the system can only hold a large number K of customers. Using asymptotic methods we reduce the eigenvalue problem to that of a standard differential equation, such as the Airy equation. The dominant eigenvalue leads to the tail of a customer's sojourn time distribution. Some numerical results are given to assess the accuracy of the asymptotic results.
Nominal Loss Aversion, Housing Equity Constraints, and Household Mobility: Evidence from the United States

Abstract This paper exploits the recent variation in US house prices to examine the effect of equity constraints and nominal loss aversion on household mobility. Detailed data from the 1985–1996 National Longitudinal Survey of Youth (NLSY79) were matched with house price data from 149 metropolitan areas to estimate instrumental variables linear probability and semi-parametric proportional hazard models of intra-metropolitan mobility. Household mobility is significantly influenced by nominal loss aversion. There is little evidence that low equity because of fallen house prices constrains mobility.
The role of bank monitoring in borrowers? discretionary disclosure: : Evidence from covenant violations

This study uses covenant violations to provide evidence on how firms make disclosure decisions in the presence of enhanced bank monitoring. Using a regression discontinuity design, I find that firms reduce disclosure following covenant violations. A series of analyses suggest that part of this decline in disclosure reflects a delegation of monitoring to banks by shareholders who consequently demand less disclosure.
Rebuilding Schools, Rebuilding Communities: The Civic Role of Mississippi's Public Schools After Hurricane Katrina

When public elementary and secondary schools in the six Mississippi Gulf Coast-area counties opened in August 2006, they enrolled 92% of the number of students they had before Hurricane Katrina made landfall just one year earlier. The one-year return rate in Mississippi's Gulf Coast public schools varied among districts depending on the extent of damage, but was nearly double that in New Orleans. Some lessons from Mississippi school districts-yes, from schools in a state known for having one of the most quantitatively weak public school systems in the country-can tell us what government did exceptionally well in Katrina's aftermath. This chapter tells the story of those Mississippi school districts. I first set the stage by comparing the coastal Mississippi public schools and the New Orleans public schools before the hurricane and then quantifying the hurricane's immediate damage to schools in both regions. Then, I describe the crucial roles Mississippi schools played in the immediate and short-term recovery efforts in their communities as well as schools' initiatives to address students' mental health needs. Finally, I return to a comparative perspective, quantifying ways in which the two regions' schools have changed in the two years since Katrina.
Standards of Appellate Review for Denial of Counsel and Ineffective Assistance of Counsel in Child Protection and Parental Severance Cases

This article examines whether parties in child protection cases have a right to competent counsel, and if so, it analyzes the appropriate standard of review for allegations of incompetent representation.
Alaska Native Rights, Statehood, and Unfinished Business

Alaska Native aboriginal rights to land and associated resources were never dealt with in a comprehensive fashion until 1971, when Congress passed the Alaska Native Lands Claims Settlement Act. Although general principles of federal Indian law provided strong support for the proposition that Alaska's Native people held aboriginal title to much of the new state, the Alaska Statehood Act itself carefully disclaimed any effect on aboriginal title. This approach was in keeping with the Congress's past dealings with Alaska Native property rights. This article outlines the history of Alaska Native aboriginal rights through the Statehood Act along with their post-statehood treatment in the Alaska Native Claims Settlement Act and the Alaska National Interest Lands Conservation Act. The article closes with a look at the unsatisfactory treatment of two important aboriginal rights - access to fish and game and tribal sovereignty - and suggests that these areas should be revisited in consultation with Alaska Native peoples.
The illusion of courage in social predictions: Underestimating the impact of fear of embarrassment on other people !

The results of two experiments support the thesis that emotional perspective taking entails two judgments: a prediction of one’s own preferences and decisions in a diVerent emotional situation, and an adjustment of this prediction to accommodate perceived diVerences between self and others. Participants overestimated others’ willingness to engage in embarrassing public performances—miming (Experiment 1) and dancing (Experiment 2)—in exchange for money. Consistent with a dual judgment model, this overestimation was greater among participants facing a hypothetical rather than a real decision to perform. Further, participants’ predictions of others’ willingness to perform were more closely correlated with self-predictions than with participants’ estimates of others’ thoughts about the costs and beneWts of performing.
Individual and Aggregate Real Balances in a Random-Matching Model

This article investigates the characteristics of stationary single-price equilibrium in a monetary random-matching model where agents can hold an arbitrary amount of divisible money and where production is costly. At such an equilibrium, agents' money holdings are endogenously determined and uniformly bounded. A refinement of weakly undominated strategies is argued to be necessary. It is shown that a continuum of single-price equilibria indexed by the aggregate real-money balance exists if one such equilibrium exists. Equilibria with different money-holdings upper bounds, hence different distributions, but with identical aggregate real-money balances can coexist.
META‐REGRESSION ANALYSIS: A QUANTITATIVE METHOD OF LITERATURE SURVEYS

Abstract. Pedagogically, literature reviews are instrumental. They summarize the large literature written on a particular topic, give coherence to the complex, often disparate, views expressed about an issue, and serve as a springboard for new ideas. However, literature surveys rarely establish anything approximating unanimous consensus. Ironically, this is just as true for the empirical economic literature. To harmonize this dissonance, we offer a quantitative methodology for reviewing the empirical economic literature. Meta-regression analysis (MRA) is the regression analysis of regression analyses. MRA tends to objectify the review process. It studies the processes that produce empirical economic results as though they were any other social scientific phenomenon. MRA provides a framework for replication and offers a sensitivity analysis for model specification. In this brief essay, we propose a new method of reviewing economic literature, MRA, and discuss its potential.
The Struggle for Music Copyright

Craig Joyce, Jessica Litman, Michael Madison, Thomas Nachbar, Pamela Samuelson and the participants in the Berkeley-Wisconsin History of Copyright Workshop for helpful and supportive comments. Nancy Mace provided very generous and helpful guidance at various stages of this project. Christopher Nickels and Melanie Taylor provided superb research assistance, with helpful assists from Rufus Jennings and Darcy Williams. As always, all errors remain mine.
Insurgency and credible commitment in autocracies and democracies

The inability of political actors to make credible promises to broad segments of society a previously unexplored determinant of civil war causes both elected and unelected governments to pursue public policies that leave citizens worse off and more prone to revolt. Non credible political actors are also less able to build counterinsurgency capacity. Popular dissatisfaction with rulers reduces the costs to counterinsurgents of overthrowing regimes, discouraging rulers from building counterinsurgency capacity in the first place; lack of credibility prevents rulers from writing contracts with counterinsurgents that maximize counterinsurgency effort. Empirical tests across numerous subsamples using various measures of political credibility support the conclusion that broad political credibility ranks at least as high as social fractionalization and natural resource rents as a cause of conflict.
The Components of Private Equity Performance: Implications for Portfolio Choice

Kinlaw, Kritzman, and Mao use a proprietary database of private equity returns to measure the excess return of private equity over public equity and to partition this return into two components: an asset class alpha and compensation for illiquidity. Their evidence suggests that private equity managers, as a group, generate alpha by anticipating the relative performance of economic sectors. The authors assume that manager-specific alpha is fully diluted across a broad universe of private equity managers to interpret the balance of excess return as a premium for illiquidity. Their results suggest that investors can capture the asset class alpha of private equity by using liquid assets such as exchange-traded funds to match the sector weights of private equity investors. This decomposition of private equity performance has important implications for portfolio choice, which Kinlaw, Kritzman, and Mao explore in this article.
WHEN A NUDGE ISN'T ENOUGH: DEFAULTS AND SAVING AMONG LOW-INCOME TAX FILERS

This study discusses a fi eld experiment on default options and savings decisions by low-income households at the time of federal tax fi ling. In the treatment, a fraction of the tax refund was automatically directed to U.S. Savings Bonds unless fi lers actively chose another allocation. We fi nd that this opt-out default had no impact on savings, and our treatment estimate is suffi ciently precise to reject effects as small as 20 percent of those found in the literature on defaults and 401(k) plans. Our results have implications for understanding when default interventions will be effective and when their infl uence will be limited.
Chile´s Structural Fiscal Surplus Rule: A Model - Based Evaluation

The paper analyzes Chile´s structural surplus fiscal rule in the face of shocks to the world copper price. Two results are obtained. First, Chile?s current fiscal rule performs well if the policymaker (i) puts a premium on avoiding excessive volatility in fiscal instruments, and (ii) puts a relatively small weight on output volatility relative to inflation volatility in his/her objective function. A more aggressive countercyclical fiscal rule can attain lower output volatility, but there is a trade-o¤ with somewhat higher inflation volatility and much higher instrument volatility. The ranking of instruments between government spending and labor income taxes depends mainly on the instrument volatility the policymaker will tolerate. Second, given its then current stock of government assets, Chile´s adoption of a 0.5% surplus target starting in 2008 was desirable because the earlier 1% target would have required significant further asset accumulation that could only have been accomplished at the expense of greater volatility in fiscal instruments and therefore in macroeconomic variables.
Closeness counts in horseshoes and dancing ... and elections

This paper was stimulated by an assertion made by Cornell, Noll, and Weingast in their excellent discussion of safety regulation (1976). Having observed that complete information about the hazards associated with all products and occupations is not and, perhaps, cannot be made available, they note that the literature on statistical decision theory shows that investment in research designed to reduce our ignorance about product and workplace hazards should lead to better decisions (assuming, of course, 'flexible decisionmaking procedures, overseen by institutions capable of responding expeditiously to past mistakes') and conclude with a plea for caution in dealing with 'unknown hazards.' (Cornell, Noll, and Weingast, 1976: 469). This is sound observation and good advice. However, they further suggest that what this means is that regulatory decision-makers ought:
Cradle to Border: U.S. Hazardous Waste Export Regulations and International Law

This paper explores current U.S. law regulating the transboundary shipment and export of hazardous waste, under both the Resource Conservation and Recovery Act (RCRA) and applicable treaties. The paper attempts to untangle the overlapping strands of domestic law, including statutes, common law and ratified treaties, in the context of current international agreements. In addition, the paper examines the legal remedies provided by the Alien Tort Claims Act (ATCA) and its potential use by alien plaintiffs harmed by hazardous waste exported in violation of U.S. law or applicable treaties. The central insight of the paper is that the exemptions provided by RCRA, that were designed to encourage recycling and reuse of certain wastes, have created a loophole that allows many types of toxic waste to be exported without any regulation, data collection, or monitoring. Further, these "exempt wastes" are exported without any assurance that the wastes will be recycled or reused, or alternatively, disposed of in environmentally responsible manner. Examples of the kinds of wastes that slip through this loophole include: car batteries that contain corrosive acids and lead; and K061 waste from steel manufacturing that may contain high levels of toxic heavy metals and may be exported for use in fertilizer without regulation. In essence, the current regulatory structure provided by RCRA does not ensure that all domestically generated hazardous waste is recycled, reused or disposed of in an environmentally responsible manner once it crosses the border. The paper next looks at the role of the Organization for Economic Cooperation and Development (OECD) and the Basel Convention on the Control of Transboundary Movements of Hazardous Waste and Their Disposal (Basel). The U.S. is a member of OECD but has not ratified Basel despite the fact that over 120 other counties are parties to the Convention, including Canada, Mexico, and the countries of the European Union. Because current U.S. export practices and regulations are not in compliance with Basel, and OECD rules are less stringent, it is becoming increasingly difficult for those U.S. trading partners who are parties to Basel to comply with the Convention.
Activist Macroeconomic Policy, Election Effects and the Formation of Expectations: Evidence from OECD Economies

We examine the explanatory power of a political—business cycle theory in which governments practice short-run policy to lessen the impact of exogenous shocks. Governments have ideological objectives with respect to macroeconomic performance, but are constrained by an augmented Phillips curve. The most prominent version, the rational partisan model, incorporates forward-looking expectations. This model can be compared to a competing model based on backward-looking expectations. Alesina and Roubini's recent advocacy of the rational model uses OECD data. Our reconsideration of the same data, updated to 1995, suggests that the adaptive expectations version offers a better explanation than the rational one.
French Fascism and History in “Speck’s Idea”

“Speck’s Idea” is Mavis Gallant’s most widely published short story and arguably her masterpiece. Through its depiction of its central character, the story dramatizes how a segment of France’s population could tolerate and condone fascism for reasons other than an inherent attraction to fascist ideas. These reasons include indifference and self-interest. Gallant’s story thus illustrates how fascism drew not merely on ideological, but also on opportunistic, motivations. The story also depicts pitfalls of understanding particular to the contemporary, post-fascist age. They include explanations of fascism that emphasize the uniquely monstrous character of its adherents, or denunciations of the work of fascist intellectuals that are so prejudicial that they take a step toward fascism in the very moment of opposing it.
Driving forces of technological change in medicine: Radical innovations induced by side effects and their impact on society and healthcare

Abstract Technological change in medicine has complex interactions driven by demand- and supply side determinants. The epistemological position of this paper is that scientific research generates in medicine vital radical innovations (new drugs/therapies) that are associated, a posteriori, to moderate and/or severe side effects. These side effects spur feedback mechanisms, which support a co-evolution of innovation in parallel technological pathways: 1) incremental innovations with lower side effects and higher efficacy; 2) emergence of new radical innovations induced from severe side effects. Empiricist-positivist arguments support this stance and show the main role of society and healthcare in the patterns of technological innovation in medicine. Critical evidences are the foundation to state main inductive theoretical implications between observed facts.
Graham v. Florida: Justice Kennedy’s Vision of Childhood and the Role of Judges

This short essay examines Graham v. Florida, the United States Supreme Court decision holding that the Eighth Amendment’s Cruel and Unusual Punishments Clause does not permit a juvenile offender to be sentenced to life in prison without parole for a nonhomicide crime. This essay argues that Justice Anthony Kennedy’s majority opinion is grounded not only in Roper v. Simmons, which invalidated the death penalty for juvenile offenders on Eighth Amendment grounds, and Kennedy v. Louisiana, which held that the Eighth Amendment prohibited the death penalty for the offense of rape of a child, but in Establishment Clause cases set in the context of public schools and Fourteenth Amendment Due Process Clause cases upholding parental notification requirements for teenagers seeking abortions. Whereas many journalists and scholars consider Justice Kennedy a “legal pragmatist” who lacks an overarching philosophy to guide his decision-making, in each of these opinions his view of childhood and the proper role of judges is consistent: children and adolescents are unformed works in progress, in the midst of both character and brain development, who are particularly susceptible to direct as well as indirect forms of coercion. As a result, according to Justice Kennedy, when determining what liberty interests are protected by the United States Constitution, the role of judges and the courts is to ensure that youth mitigates rather than aggravates. Further, although juvenile justice advocates have heralded Graham as a clear victory, the opinion may raise as many questions as it seeks to answer.
Under one roof: Supply chains and the protection of foreign investment

We argue that economic links, such as supply chains, can create a common roof that protects foreign investors in host countries that lack strong institutions to protect property rights. Supply chains link the activities of firms: when a host government breaks a contract with one firm, other firms in the supply chain are harmed. These partner firms therefore have incentive to protect one another’s property rights. This leads to the key implication of our argument: host governments are less likely to violate the property rights of firms that are more tightly linked with other firms in the host economy. We test our argument with cross-national data on investment arbitration, a survey of US multinational subsidiaries in Russia, and case studies from Azerbaijan. Our findings imply that one benefit of outsourcing in developing and transition economies is the creation of a network of partner firms that protect each other’s property rights.
EARNINGS MANIPULATION IN FAILING FIRMS

Prior literature and anecdotal evidence, most recently provided by allegations relative to Enron, Global Crossing, and WorldCom, suggest that failing firms (defined here as prebankruptcy firms) may be motivated to engage in fraudulent financial reporting to conceal their distress. I examine two research questions: (1) Are failing firms' prebankruptcy financial statements more likely to exhibit signs of material income increasing earnings manipulation than those of nonfailing firms? (2) Do auditors detect the overstatements in firms that they perceive to be failing? I predict and find that as (ex post) bankrupt firms that do not (ex ante) appear to be distressed approach bankruptcy, their financial statements reflect significantly greater material income-increasing accrual magnitudes in nongoing-concern years than do control firms. The accrual behavior of these firms resembles that of bankrupt firms that the Securities and Exchange Commission (SEC) has sanctioned for fraud. Like sanctioned firms, the nonstressed bankrupt firms display significantly greater (material) increases in receivables; inventory; property, plant, and equipment; sales; net working capital, current, and discretionary accruals in prebankruptcy nongoing-concern years than do control firms. They also display significantly more negative changes in cash flows from operations and net cash and a greater disparity between accrual-based net income and operating cash flows than do control firms, consistent with Lee, Ingram, and Howard 1999. Finally, I predict and find that these firms' going-concern years reflect evidence consistent with auditor-prompted reversal of previous overstatements. These results are based on parametric and nonparametric tests for various subsample combinations drawn from a sample of 293 bankrupt firms representing approximately 2,500 observations.
Asymmetric sensitivity of CEO cash compensation to stock returns

Abstract We document that CEO cash compensation is twice as sensitive to negative stock returns as it is to positive stock returns. Since stock returns include both unrealized gains and unrealized losses, we expect cash compensation to be less sensitive to stock returns when returns contain unrealized gains (positive returns) than when returns contain unrealized losses (negative returns). This is consistent with boards of directors exercising discretion to reduce costly ex post settling up in cash compensation paid to CEOs.
Trade, Institutions and Ethnic Tolerance: Evidence from South Asia

I provide evidence that the degree to which medieval Hindus and Muslims could provide complementary, non-replicable services and a mechanism to share the gains from exchange has resulted in a sustained legacy of ethnic tolerance in South Asian towns. Due to Muslimspecific advantages in Indian Ocean shipping, inter-ethnic complementarities were strongest in medieval trading ports, leading to the development of institutional mechanisms that further supported inter-ethnic exchange. Using novel town-level data spanning South Asia’s medieval and colonial history, I find that medieval trading ports, despite being more ethnically mixed, were five times less prone to Hindu-Muslim riots between 1850-1950, two centuries after Europeans disrupted Muslim overseas trade dominance. I provide case and representative household survey evidence that these differences were transmitted via the persistence of institutions that emerged to support inter-ethnic medieval trade and continue to influence contemporary occupational choices, trust and organizations.
Banking System Bailout‐Scandinavian Style

During the Scandinavian banking crisis in the early 1990s, Norway and Sweden chose somewhat different routes to crisis resolution, though both involved government intervention and both proved effective. The Norwegian government injected a hybrid debt-equity form of capital into the largest commercial bank, though only after first extinguishing old equity claims. The Swedish government issued a system-wide debt guarantee and allowed shareholders to maintain their equity stakes, provided they also contributed new equity capital to the banks. In the (single) case where equityholders refused to participate, the government took over the bank and divided it into a “good” and “bad” part, with the latter holding the non-performing loans. The resolution of banking system problems in Scandinavia provides a useful precedent for the recent “bailout” of the U.S. banking system, which, after some initial trial and errors, also involved government ownership of shares in financial institutions. As the author notes in closing, the Scandinavian experience is also relevant for addressing the question of how the U.S. government, having effectively become “owner of last resort” in key financial institutions, should handle its controlling equity stakes.
New goods, old theory, and the welfare costs of trade restrictions

why this seemingly small change in the assumptions of a model can have such important positive and normative implications. The paper also asks why the implications of new goods have not more extensively been explored, especially given that the basic economic issues were identified 150 years ago. The mathematical difficulty of modeling new goods has no doubt been part of the problem. An equally, if not more important stumbling block has been the deep philosophical resistance that humans feel toward the unavoidable logical consequence of assuming that genuinely new things can happen and could have happened at every date in the past. We are forced to admit that the world as we know it is the result of a long string of chance outcomes.
Cotton Subsidies, the WTO, and the ‘Cotton Problem’

Following an 8-year long dispute over cotton subsidies, Brazil and the United States signed a Memorandum of Understanding on April 21, 2010, effectively paving the way for settling the dispute. This paper argues that cotton subsidies are just the tip of the iceberg while a number of other, perhaps more important, issues require attention and, indeed, political will. Chief among them is the persistent divergence between cotton prices and the prices of other agricultural commodities, which reflects, for the most part, the large supply response by China and India, a direct consequence of con-version to biotech cotton varieties in these (and other) countries. Such response -- which kept cotton prices low, compared with other commodities -- imposes a competitive disadvantage to non-users of biotech cotton. The paper also highlights two additional constraints faced by the cotton producing countries of West and Central Africa, namely, the structural inefficiencies of their primary processing industries (also known as ginning) and the appreciation of the CFA franc against the US dollar. Without downplaying the importance of subsidy elimination, the paper concludes that these impediments should receive high priority in the policy agenda.
The Law and Policy of Online Privacy: Regulation, Self-Regulation, or Co-Regulation?

The Internet poses grave new threats to information privacy. Search engines collect and store our search queries; Websites track our online activity and then sell this information to others; and Internet Search Providers read the very packets of information through which we interact with the Internet. Yet the debate over how best to address this problem has ground to a halt, stuck between those who call for a vigorous legislative response and those who advocate for market solutions and self-regulation. In 1995, the European Union member states began to build a third approach into their data protection laws, one in which government and industry work together to develop and enforce privacy rules. This “co-regulatory” model could provide a way to transcend the frozen U.S. debate. However, it has received little attention in the United States and almost no analysis in the law review literature. This article identifies the threats to online privacy; evaluates whether direct government regulation or the market/self-regulation can adequately address these threats; surveys the theoretical literature on co-regulation; and describes and analyzes the statutes through which E.U. member states have implemented the co-regulatory approach. It provides the first comprehensive analysis of these laws in a U.S. law review and develops an original way of categorizing and understanding them.
Variation in the Intensity of Financial Regulation: Preliminary Evidence and Potential Implications

Given all the talk of regulatory convergence in financial markets, one would think that good data would be available regarding the actual intensity of financial regulation in developed countries as well as a robust literature about how to determine the optimal level of regulatory intensity for financial markets and financial institutions. As it turns out, neither data nor theories are well developed on these topics. In this paper, I discuss first the considerable difficulties of conducting a theoretically complete analysis of costs and benefits in the area of financial regulation as well as the problems associated in making international comparisons between the observed levels of the intensity of financial regulation across national boundaries. Notwithstanding these difficulties, I proceed to present some data about direct regulatory costs of financial regulation in the United States and then engage in some preliminary international comparisons. Even after making adjustments for the size of U.S. financial markets, the costs of financial regulation in the United States are substantially higher than the costs observed in most other jurisdictions. Moreover, common law jurisdictions, in general, seem to incur substantially higher regulatory costs than do civil law jurisdictions. The paper also presents some additional evidence about the level of regulatory intensity in the area of securities regulation by reporting data on public and private securities enforcement actions in the United States in recent years, including data on both monetary and non-monetary sanctions. Compared to at least the United Kingdom and Germany, the intensity of securities enforcement actions in the United States appears to be strikingly higher. Not only are there more financial regulators in the United States, but they carry bigger sticks than their foreign counterparts. While law on the books may be converging, the level of enforcement efforts seems to vary widely across national boundaries and even within the regions, such as Europe. The paper concludes with some thoughts about additional lines of research in this area and then touches briefly upon the implications of my data for the debate over regulatory convergence and for future lines of research.
Playing God: The Legality of Plans Denying Scarce Resources to People with Disabilities in Public Health Emergencies

Public health emergencies can arise in a number of different ways. They can follow a natural disaster, such as Hurricane Katrina, the 2004 tsunami, and the recent earthquakes in Haiti and Chile. They may be manmade, such as the September 11 attacks and the anthrax scare. They may also be infectious. While no pandemic flu has yet reached the severity of the 1918 flu, there have been several scares, including avian flu and most recently H1N1. Few questions are more ethically or legally loaded than determining who will receive scarce medical resources in the event of a widespread public health emergency. The answer will often mean the difference between life and death for affected Americans. Despite this reality, or perhaps because of it, there has been little guidance from the federal and state governments on how to prioritize distribution of those resources among individuals. To fill this gap, some public health and medical organizations promulgated protocols that set forth a hierarchy of resource allocation in response to the predicted H1N1 pandemic. Although these efforts at advance planning are to be lauded, they raise a number of troubling civil rights issues. Several of the protocols exclude some people with disabilities from receiving care even when their disabilities do not affect the likely success of the medical interventions at issue. Both the legality of such plans and the ethical implications of promoting the health of the community at the expense of people with disabilities are highly problematic. This Article explores the legality of the proposed allocation protocols under the Americans with Disabilities Act (ADA) and the Rehabilitation Act. It also evaluates their compatibility with the ethical principles that guide public health decisions and discusses their implications for people with disabilities in the preplanning for public health emergencies.
Secularism in the Indian Context

Indian constitutional framers sought to tie their new state to ideas of modernity and liberalism by creating a government that would ensure citizens' rights while also creating the conditions for democratic citizenship. Balancing these two goals has been particularly challenging with regard to religion, as exemplified by the emergence of a peculiarly Indian understanding of secularism which requires the nonestablishment of religion but not the separation of religion and state. Supporters argue that this brand of secularism is best suited to the particular social and historical circumstances of independent India. This article suggests that the desire to separate religion and state is integral to any understanding of secularism and that, consequently, the Indian state neither is nor was meant to be secular. However, Indian secularists correctly identify the Indian state's distinctive approach to religion-state relations as appropriate to the Indian context and in keeping with India's constitutional goals.
State ownership and corporate governance

State ownership of publicly-traded corporations remains pervasive around the world, and has been increasing in recent years. Existing literature focuses on the implications of government ownership for corporate governance and performance at the firm level. This Article, by contrast, explores the different but equally important question of whether the presence of the state as a shareholder can impose negative externalities on the corporate law regime available to the private sector. Drawing from historical experiments with government ownership in the United States, Brazil, China, and Europe, this study shows that the conflict of interest stemming from the state’s dual role as a shareholder and regulator can influence the content of corporate laws to the detriment of outside investor protection and efficiency. It thus addresses a gap in the literature on the political economy of corporate governance by incorporating the political role of the state as shareholder as another mechanism to explain the relationship between corporate ownership structures and legal investor protection. Finally, this Article explores the promise of different institutional arrangements to constrain the impact of the state’s interests as a shareholder on the corporate governance environment, and concludes by offering several policy recommendations.
Mental Capacity as Metaphor

Mental capacity is a foundational concept in contract law, but the term is metaphorical, and a detailed analysis of three representative judicial opinions shows that the explanations that courts give of the term are equally metaphorical. As such, the term illustrates well the cognitivist view that abstract concepts arise through an imaginative but orderly projection from the domain of bodily and social experience. Legal Realists such as Felix Cohen condemned metaphors for their supposed failure to constrain judges, but recent empirical work suggests that metaphorical thinking is indeed constrained, and accordingly thinkers such as Cohen would probably in fact have welcomed cognitive analysis of law, both for its methods and for its substantively progressive disposition.
Privacy and Attitudes Towards Internet-Based Selection Systems: A Cross-Cultural Comparison

This paper examines perceptions of privacy and how they relate to reluctance to submit employment-related information over the Internet. In addition, possible cross-cultural differencesbetweentheUSandBelgiumregardingtheseconstructsandtheroleofInternet knowledge are investigated. Based on theories of privacy and cross-cultural differences, a survey methodology was applied to test several hypotheses. Results suggest that privacy considerations may affect reluctance to use an Internet-based selection system. Moreover, as expected, some differences were observed between US and Belgian respondents. Respondents possessing a higher self-rated knowledge of the Internet were less concerned that employment-related data submitted over the Internet would fall into the wrong hands.
Risk and Return Characteristics of Venture Capital-Backed Entrepreneurial Companies

Valuations of entrepreneurial companies are only observed occasionally, albeit more frequently for well-performing companies. Consequently, estimators of risk and return must correct for sample selection to obtain consistent estimates. We develop a general model of dynamic sample selection and estimate it using data from venture capital investments in entrepreneurial companies. Our selection correction leads to markedly lower intercepts and higher estimates of risks compared to previous studies.
Private monitoring, collusion, and the timing of information

When a principal's monitoring information is private (nonverifiable), the agent should be concerned that the principal could misrepresent the information to reduce the agent's wage or collect a monetary penalty. Restoring credibility may lead to an extreme waste of resources-the so-called burning of money. A more realistic and efficient outcome is feasible when the private information arrives in time to rescale the agent's effort. Rescaling is more effective than pure monetary penalties because effort has different values to different parties whereas money is equally valuable to all parties. Furthermore, when rescaling is feasible, private monitoring is more efficient than public monitoring subject to collusion because nonmonetary penalties are ineffective to deter collusion.
A Great Place to Start: The Role of Military Service on Human Capital Formation

The earnings of African–American males have increased over the past 50 years, but differences remain in their economic progress relative to either white or Asian Americans. Labor market disadvantages in the past were the result of overt discrimination; however, the earnings gap experienced over the last four decades has been linked to human capital differences. It is hypothesized that military service provides a buffer for adverse labor market characteristics for young African–American males and this paper discusses the returns from military service as reflected in their post–service wages.
Electoral Accountability and Responsive Democracy

We consider elections with hidden preferences and hidden actions, in which neither voters nor politicians can commit to future choices. When politicians are highly office motivated, they respond by choosing high policies to signal that they are above average, and some below-average politicians must randomise between choosing policies near their ideal points and mimicking above-average politicians by choosing high policies. If voter preferences are increasing, then elections deliver positive outcomes; but if voter preferences are single peaked, then politicians overshoot in the first period. Electoral incentives shift to sanctioning, rather than selection, as office motivation becomes large.
Random Projection Estimation of Discrete-Choice Models with Large Choice Sets

We introduce random projection, an important dimension-reduction tool from machine learning, for the estimation of aggregate discrete-choice models with high-dimensional choice sets. Initially, high-dimensional data are projected into a lower-dimensional Euclidean space using random projections. Subsequently, estimation proceeds using cyclical monotonicity moment inequalities implied by the multinomial choice model; the estimation procedure is semiparametric and does not require explicit distributional assumptions to be made regarding the random utility errors. Our procedure is justified via the Johnson–Lindenstrauss lemma—the pairwise distances between data points are preserved through random projections. The estimator works well in simulations and in an application to a supermarket scanner data set. This paper was accepted by Juanjuan Zhang, marketing.
HIV/AIDS, Life Expectancy, and the Opportunity Cost Model of Civil War:

This article views death in battle as an opportunity cost whose size is determined by the number of years a rebel would have lived as a civilian. As civilian life expectancy declines, this opportun...
The impact of joint participation on liquidity in equity and syndicated bank loan markets

Abstract Market liquidity is impacted by the presence of financial intermediaries that are informed and active participants in both the equity and the syndicated bank loan markets, specifically informationally advantaged lead arrangers of syndicated bank loans that simultaneously act as equity market makers (dual market makers). Employing a two-stage procedure with instrumental variables, we identify the simultaneous equations model of liquidity and dual market maker decisions. We find that the presence of dual market makers improves the liquidity of the more competitive and transparent equity markets, but widens the spread in the less competitive over-the-counter loan market, particularly for small, informationally opaque firms.
Transparency and market quality: Evidence from SuperMontage

Abstract In this study, we examine the effect of pre-trade transparency on market quality using data before and after the introduction of SuperMontage. Our results show that both bid–ask spreads and return volatility declined significantly after the implementation of SuperMontage. In addition, SuperMontage led to significant improvements in the SEC Rule 605 execution quality measures (e.g., faster executions and higher fill rates). Overall, our results indicate that SuperMontage improved market and execution quality on NASDAQ through greater pre-trade transparency and the integrated, more efficient quotation and trading system.
A Window into the Regulated Commons: The Takings Clause, Investment Security, and Sustainability

The holding of the U.S. Court of Appeals for the Federal Circuit in American Pelagic Fishing Co. v. United States points to the conclusion that the government will almost never be liable, under the Takings Clause, when fisheries regulations reduce the value of commercial fishing permits, vessels, or gear. From the perspective of natural resource economics, this is a healthy result. Economists suggest that solving commons problems requires that natural resources be under the complete control of a sole owner who makes self-interested decisions about resource use, and if the Fifth Amendment required the government owner to compensate fishermen when it tightened regulations, it would hamper the government’s ability to regulate optimally. One problem with the economic theory of commons solution, however, is that it does not distinguish between sole private ownership and sole government ownership in terms of their application. In this Article, I argue that government ownership is fraught with problems that do not occur in the private ownership context. To the extent that government resource owners rely on entrepreneurs to capture and sell natural resources, the government must play two roles: regulator and facilitator. These roles frequently come into conflict, inevitably compromising the effectiveness of regulation. Furthermore, entrepreneurs have incentives to lobby against long-term conservation. The poor condition of United States fisheries is proof that these two problems—government’s dual role and fishermen’s lobbying—are preventing the Magnuson-Stevens Fishery Conservation and Management Act from achieving its goal of sustainable