ECONOMIC ANALYSIS OF LAW AND ECONOMICS

The academic world is wonderful. Like few other professionals, we can choose what we want to do and what questions we think are important, which in our line of work means choosing what topics we want to research. But what influences our choices? This paper examines what drives scholars to select Law and Economics (L&E) as a topic for research. It does so by implementing the methodology of many L&E papers - by assuming that regulation and incentives matter. Legal scholars face very different academic incentives in different parts of the world. In some countries, the academic standards for appointment, promotion and tenure encourage legal scholars to concentrate on L&E. In others, they strongly discourage such research. Thus, we should expect wide variation in the rate of participation of legal scholars in the L&E discourse across countries. On the other hand, economists are evaluated with similar yardsticks everywhere. Thus, participation of economists in the L&E discourse is likely to vary much less from one place to another. The hypothesis of this paper is that the academic incentives are a major factor in the level of participation in the L&E scholarship. This "incentives hypothesis" is presented and then examined empirically on data gathered from the list of authors in L&E journals and the list of participants in L&E conferences. The data generally supports the hypothesis. In the legal academia, the incentives to focus research on L&E topics are the strongest in Israel, they are weaker in North America and weakest in Europe. In fact, the data reveal that lawyers' authorship of L&E papers weighted by population is almost ten times higher in Israel than in North America; while in Europe it is almost ten times lower than in North America. By comparison, the weighted participation level of economists - who face relatively similar academic environments across countries - in L&E research is not significantly different across countries.Law and Economics, Legal Education, Comparative Law,

Economic Analysis of Law and Economics

The academic world is wonderful. Like few other professionals, we can choose what we want to do and what questions we think are important, which in our line of work means choosing what topics we want to research. But what influences our choices? This paper examines what drives scholars to select Law and Economics (L&E) as a topic for research. It does so by implementing the methodology of many L&E papers – by assuming that regulation and incentives matter. Legal scholars face very different academic incentives in different parts of the world. In some countries, the academic standards for appointment, promotion and tenure encourage legal scholars to concentrate on L&E. In others, they strongly discourage such research. Thus, we should expect wide variation in the rate of participation of legal scholars in the L&E discourse across countries. On the other hand, economists are evaluated with similar yardsticks everywhere. Thus, participation of economists in the Law and Economics discourse is likely to vary much less from one place to another. The hypothesis of this paper is that the academic incentives are a major factor in the level of participation in the L&E scholarship. This incentives hypothesis is presented and then examined empirically on data gathered from the list of authors in L&E journals and the list of participants in L&E conferences. The data generally supports the hypothesis. In the legal academia, the incentives to focus research on L&E topics are the strongest in Israel, they are weaker in North America and weakest in Europe. In fact, the data reveal that lawyers\u27 authorship of L&E papers weighted by population is almost ten times higher in Israel then in North America; while in Europe it is almost ten times lower then in North America. By comparison, the weighted participation level of economists – who face relatively similar academic environments across countries – in L&E research is not significantly different across countries

Safety from Plea-Bargains’ Hazards

There is a significant risk—in safety terms, a hazard—that the wide gap between the defendant’s anticipated punishment if convicted at trial and the relatively lighter punishment if he confesses in a plea-bargain will lead not only the guilty but also the innocent to confessing. In practice, only 3% of all federal cases go to trial, and only 6% of state cases. In the remainder, conviction is obtained through plea-bargaining. Indeed, plea-bargains are one of the central mechanisms facilitating false convictions. In other fields, the meaning of a “safety-critical system” is well understood, and resources are, therefore, invested in modern safety methods, which reduce significantly the rate of accidents. This is the case, for example, in the aviation field, which abandoned the “Fly-Fix-Fly” approach and developed more advanced safety methods that generally follow an “Identify-Analyze-Control” model and are aimed at “First-Time-Safe.” Under this approach, there is systematic identification of future hazards, analysis of the probability of their occurrence, and a complete neutralization of the risk, or at least its reduction to an acceptable level. A false conviction is a system error and accident just like a plane crash. But in criminal law, a Hidden Accidents Principle governs and almost all the false convictions are never detected. Therefore, not enough thought has been given to the system’s safety. Empiric studies based on the Innocence Project’s findings point to a very high false-conviction rate: at least 5% for the most serious crimes. Regarding convictions based on plea-bargains, the rate is probably significantly higher since the commission of the offense and the guilt of the accused are not proved by significant evidence. This article proposes a theory and some initial tools for incorporating modern safety into the criminal justice system. Specifically, I demonstrate how the innovative “System-Theoretic Accident Model and Processes” (STAMP) safety model can be applied in the criminal justice system, by developing constraints, controls, and barriers against the existing hazards in the context of convictions based on plea-bargains. Additionally, the article suggests an innovative idea, of recognizing defendants’ right to a fair plea-bargain offer. Plea-bargains need not be dependent on the goodwill of a particular prosecutor toward a particular defendant or her defense counsel

Reducing False Guilty Pleas and Wrongful Convistions Through Exoneree Compensation

A great concern with plea-bargains is that they may induce innocent individuals to plead guilty to crimes they have not committed. In this article, we identify schemes that reduce the number of innocent-pleas without affecting guilty individuals\u27 plea-bargain incentives. Large compensations for exonerees reduce expected costs associated with wrongful determinations of guilt in trial and thereby reduce the number of innocent-pleas. Any distortions in guilty individuals\u27 incentives to take plea bargains caused by these compensations can be off-set by a small increase in the discounts offered for pleading guilty. Although there are many statutory reform proposals for increasing exoneration compensations, no one has yet noted this desirable separating effect of exoneree compensations. We argue that such reforms are likely to achieve this result without causing deterrence losses

Reducing False Guilty Pleas and Wrongful Convistions Through Exoneree Compensation

A great concern with plea-bargains is that they may induce innocent individuals to plead guilty to crimes they have not committed. In this article, we identify schemes that reduce the number of innocent-pleas without affecting guilty individuals\u27 plea-bargain incentives. Large compensations for exonerees reduce expected costs associated with wrongful determinations of guilt in trial and thereby reduce the number of innocent-pleas. Any distortions in guilty individuals\u27 incentives to take plea bargains caused by these compensations can be off-set by a small increase in the discounts offered for pleading guilty. Although there are many statutory reform proposals for increasing exoneration compensations, no one has yet noted this desirable separating effect of exoneree compensations. We argue that such reforms are likely to achieve this result without causing deterrence losses

The Innocence Effect

Nearly all felony convictions—about 95 percent—follow guilty pleas, suggesting that plea offers are very attractive to defendants compared to trials. Some scholars argue that plea bargains are too attractive and should be curtailed because they facilitate the wrongful conviction of innocents. Others contend that plea bargains only benefit innocent defendants, providing an alternative to the risk of a harsher sentence at trial. Hence, even while heatedly disputing their desirability, both camps in the debate believe that plea bargains commonly lead innocents to plead guilty. This Article shows, however, that the belief that innocents routinely plead guilty is overstated. We provide varied empirical evidence for the hitherto neglected innocence effect, revealing that innocents are significantly less likely to accept plea offers that appear attractive to similarly situated guilty defendants. The Article further explores the psychological causes of the innocence effect and examines its implications for plea bargaining. Positively, we identify the striking cost of innocence, wherein innocents suffer harsher average sanctions than similarly situated guilty defendants. Yet our findings also show that the innocence effect directly causes an overrepresentation of the guilty among plea bargainers and an overrepresentation of the innocent among those who choose trial. In this way, the innocence effect beneficially reduces the rate of wrongful convictions—including accepted plea bargains—even when compared to a system that does not allow plea bargaining. Normatively, our analysis finds that both detractors and supporters of plea bargaining should reevaluate, if not completely reverse, their long-held positions to account for the causes and consequences of the innocence effect. The Article concludes by outlining two proposals for minimizing false convictions, better protecting the innocent, and improving the plea bargaining process altogether by accounting for the innocence effect

The Cross-Atlantic Law and Economics Divide: A Dissent

While law and economics has become an established mode of analysis within the United States, it is generally asserted that law and economics "barely exists" in European countries. In order to support this claim, scholars have looked to various metrics, such as hiring of economists by law schools, publications in major journals, and law and economics conference participation, all of which suggest the United States as being significantly more advanced than Europe in its development of law and economics. This Article states that the gap between the United States and Europe regarding the development of law and economics is greatly exaggerated. We argue that, due to the failure to control for institutional differences between academics in the United States and Europe, existing metrics fail to adequately capture the rate at which law and economics has developed in Europe. In order to appreciate the contribution of law and economics in Europe, we emphasize the distinction between fundamental and applied domestic contributions to a field of scholarship. We suggest that a significant body of European law and economics scholarship fits in the applied group. Moreover, given the institutional obstacles to interdisciplinary research at European law schools, specifically the lack of incentives to produce such scholarship, the more puzzling question is why law and economics is practiced at European law schools as much as it is today. We find that the field of economic analysis of law has inspired impressive entrepreneurial efforts in Europe. The accomplishments of the law and economics movement in Europe are unfairly neglected when measuring scholarly productivity without accounting for institutional differences in educational markets