The Hidden Effect of Rules: Behavioural consequences of Obligations

How formal institutions (e.g. laws and public policies) affect human behaviour represents a crucial issue in economic analysis. Formal rules are defined as obligations backed by incentives. The economic literature has largely studied the role of material incentives in shaping individual behaviour. Yet, the role of obligations, i.e. what formal rules ask people to do or not to do, remains a black box. In this paper we run a public good game to analyze the behavioural effects of obligations. We find experimental evidence that obligations can affect cooperative behaviour both by coordinating conditional co-operators’ beliefs on others’ behaviour and by directly affecting social preferences. Our results shed a new light on the behavioural channels through which formal rules can affect individual behaviour and suggest the opportunity to broaden the scope of analysis in order to better understand the effects of institutions on economic outcomes.Beliefs, Human Behaviour, Incentives, Obligations, Preferences, Public Good Game.

The Social Multiplier of Tax Evasion: Evidence from Italian Audit Data

We investigate the role of individual interdependencies in tax evasion, arising from congestion on the auditing resources available to local tax authorities. Identification exploits a novel method based on comparison of the variance of individual behavior — concealed income in this case — at different levels of aggregation, within different subpopulations (Graham, 2008). This method allows us to mitigate some of the most severe problems that surround identification of neighbourhood effects, at the cost of identifying restrictions that arise naturally from our model. We employ a unique dataset of tax audits to about 75,000 self-employed individuals in Italy. Surprisingly, this sample is not statistically different from a random sample of taxpayers. We find a social multiplier of about 3, meaning that the equilibrium response to a shock that induces an exogenous variation in mean concealed income — such as tougher or looser tax enforcement — is about three times the initial average responsesocial interactions, social multiplier, tax evasion, tax compliance, excess variance

Law and Behaviours in Social Dilemmas: Testing the Effect of Obligations on Cooperation

Laws consist of two components: the ‘obligations’ they express and the ‘incentives’ designed to enforce them. In this paper we run a public good experiment to test whether or not obligations have any independent effect on cooperation in social dilemmas. The results show that, for given marginal incentives, different levels of minimum contribution required by obligation determine significantly different levels of average contributions. Moreover, unexpected changes in the minimum contribution set up by obligation have asymmetric dynamic effects on the levels of cooperation: a reduction does not alter the descending trend of cooperation, whereas an increase induces a temporary re-start in the average level of cooperation. Nonetheless, obligations per se cannot sustain cooperation over time.Obligation, Incentives, Public Good Game, Experiments.

Indirect Effects of a Policy Altering Criminal Behaviour: Evidence from the Italian Prison Experiment

We exploit the Collective Clemency Bill passed by the Italian Parliament in July 2006 to evaluate the indirect effects of a policy that randomly commutes actual sentences to expected sentences for 40 percent of the Italian prison population. We estimate the direct and indirect impact of the residual sentence – corresponding to a month less time served in prison associated with a month of expected sentence – at the date of release on individual recidivism. Using prison, nationality and region of residence to construct reference groups of former inmates, we find large indirect effects of this policy. In particular, we find that the reduction in the individuals’ recidivism due to an increase in their peers’ residual sentence is at least as large as their response to an increase in their own residual sentence. From this result we estimate a social multiplier in crime of 2.Crime, Natural Experiment, Indirect Effects of Policies, Social Interactions

Indirect Effects of a Policy Altering Criminal Behaviour: Evidence from the Italian Prison Experiment

We exploit the Collective Clemency Bill passed by the Italian Parliament in July 2006 to evaluate the indirect effects of a policy that randomly commutes actual sentences to expected sentences for 40 percent of the Italian prison population. We estimate the direct and indirect impact of the residual sentence – corresponding to a month less time served in prison associated with a month of expected sentence – at the date of release on individual recidivism. Using prison, nationality and region of residence to construct reference groups of former inmates, we find large indirect effects of this policy. In particular, we find that the reduction in the individuals' recidivism due to an increase in their peers’ residual sentence is at least as large as their response to an increase in their own residual sentence. From this result we estimate a social multiplier in crime of 2.crime, social interactions, indirect effects

Prison Conditions and Recidivism

We use a unique data set on post-release behavior of former Italian inmates to estimate the effect of prison conditions on recidivism. By combining different sources of data we exploit variation in prison conditions measured by: 1) the extent of overcrowding at the prison level, 2) the number of deaths in the facility of detention during an inmate’s stay and 3) the distance of the prison from the chief town of the province where the prison is located. By considering inmates who served their sentence in a jurisdiction different from the hometown in which they live after release, we can include province of residence fixed effects and account for the main source of unobserved heterogeneity correlated to prison conditions. We find that a harsher prison treatment does not reduce former inmates’ criminal activity. The extent of overcrowding and the number of deaths do not decrease the probability to be re-arrested. Instead, we find evidence that the degree of isolation measured by distance from the prison of detention to the chief town of the province where the prison is located increases recidivism.crime, prison, deterrence

Evaluating Electoral Responses to Policies. What do we learn from Italian incarceration policies

This policy brief discusses how voters respond to public policies with a particular focus on crime control policies. We present the main methodological issues that the researcher faces to disentangle the response of voters to the consequences of policies from the other factors. We present the results of a study of the consequences of the 2006 Italian collective pardon. Using randomness in local variation in recidivism rates we show that Italian voters held the incumbent government responsible for local variations in recidivism caused by the collective pardon. We conclude by discussing the consequences for the evaluation of the electoral response to public policies

Deterrent effects of imprisonment

This paper provides a sintetic review of the literature concernig the effects of imprisonment on crime rates and on recidivism. We hghlight both the effects depending on general and specific deterrence as well as open research questions. Nb: This manuscript is a working draft of a voice in preparation for Encyclopedia of Criminology and Criminal Justice, Springer.Cet article offre un résumé concis des travaux sur les effets de l'emprisonnement sur les taux de criminalité et la récidive. Nous mettons en évidence les effets liés à deux formes de dissuasion, générale et spécifique. Enfin, nous présentons les questions de recherche qui restent ouvertes

Sanctions that Signal: an Experiment.

Sanctions are a means to provide incentives towards more pro-social behavior. Yet their implementation can be a signal that past behavior was undesirable. We investigate experimentally the importance of the informational content of the choice to sanction. We place this in a context of a coordination game to focus attention on beliefs and information and less on intrinsic or pro-social motivations. We compare the eect of sanctions that are introduced exogenously by the experimenter to that of sanctions which have been actively chosen by a subject who takes the role of a fictitious policy maker with superior information about the previous eort of the other players. We nd that cooperative subjects perceive actively chosen sanctions as a negative signal which eliminates for them the incentive eect of sanctions.