Consider legal uncertainty as uncertainty about the legality of a specific action. In particular, suppose that the threshold of legality is uncertain. I show that this legal uncertainty raises welfare. Legal uncertainty changes deterrence in opposite directions. The probability of conviction...

Adding to the literature on the effects of government decentralization, this paper uses a large sample of individual responses from more than a hundred countries about public’s perceptions of government’s performance along various dimensions to study the relative influences of different...

Although social pressure may affect the behavior of individuals, it is very hard to evaluate empirically. A soccer field is an attractive testing ground in the sense that both performance and social pressure by spectators are measurable. The drawback is that the number of spectators is an...

This paper analyzes patent pools and their effects on innovation incentives. It is shown that the pro-competitive effects of patent pools for complementary patents naturally extend for dynamic innovation incentives. However, this simple conclusion may not hold if we entertain the possibility...

Legal provisions that protect politicians from arrest and prosecution exist throughout much of the modern democratic world. Why, and with what effects, do societies choose to place their politicians above the law? We examine the institution of immunity both theoretically and empirically. Our...

Adding to the corruption-gender nexus, this paper contributes across several dimensions: (a) measurement of corruption by studying whether female managers and female owners of firms perceived corruption differently; (b) using survey information at the firm level; and (c) employing a large sample...

I examine whether elections influence perceived corruption in the public sector. Perceived corruption in the public sector is measured by the reversed Transparency International’s Perception of Corruption Index (CPI). The dataset includes around 100 democracies over the period 2012-2016, a...

We find an economic rationale for the common sense answer to the question in our title courts should not always enforce what the contracting parties write. We describe and analyze a contractual environment that allows a role for an active court. An active court can improve on the outcome that...

We describe and analyze a contractual environment that allows a role for an active court. The model we analyze is the same as in Anderlini, Felli, and Postlewaite (2006). An active court can improve on the outcome that the parties would achieve without it. The institutional role of the court is...

Recent empirical work shows that judicial dependence can explain high levels of corruption. This paper examines how the dependence of judiciaries influences corruption at different levels of the government in a model where the central government, low-level officials, and the judiciary are...