Reexamining the Role of Incarceration and Stigma in Criminal Law

One of the ways by which the legal system has responded to different sets of problems is the blurring of the traditional boundaries of criminal law, both procedural and substantive. This study aims to explore under what conditions does this trend lead to the improvement of society's welfare by focusing on two distinguishing sanctions in criminal law, incarceration and social stigma. In analyzing how incarceration affects the incentive to an individual to violate a legal standard, we considered the crucial role of the time constraint. This aspect has not been fully explored in the literature on law and economics, especially with respect to the analysis of the beneficiality of imposing either a fine or a prison term. We observed that that when individuals are heterogeneous with respect to wealth and wage income, and when the level of activity can be considered a normal good, only the middle wage and middle income groups can be adequately deterred by a fixed fines alone regime. The existing literature only considers the case of the very poor, deemed as judgment proof. However, since imprisonment is a socially costly way to deprive individuals of their time, other alternatives may be sought such as the imposition of discriminatory monetary fine, partial incapacitation and other alternative sanctions. According to traditional legal theory, the reason why criminal law is obeyed is not mainly due to the monetary sanctions but to the stigma arising from the community’s moral condemnation that accompanies conviction or merely suspicion. However, it is not sufficiently clear whether social stigma always accompanies a criminal conviction. We addressed this issue by identifying the circumstances wherein a criminal conviction carries an additional social stigma. Our results show that social stigma is seen to accompany a conviction under the following conditions: first, when the law coincides with the society's social norms; and second, when the prohibited act provides information on an unobservable attribute or trait of an individual -- crucial in establishing or maintaining social relationships beyond mere economic relationships. Thus, even if the social planner does not impose the social sanction directly, the impact of social stigma can still be influenced by the probability of conviction and the level of the monetary fine imposed as well as the varying degree of correlation between the legal standard violated and the social traits or attributes of the individual. In this respect, criminal law serves as an institution that facilitates cognitive efficiency in the process of imposing the social sanction to the extent that the rest of society is boundedly rational and use judgment heuristics. Paradoxically, using criminal law in order to invoke stigma for the violation of a legal standard may also serve to undermine its strength. To sum, the results of our analysis reveal that the scope of criminal law is narrow both for the purposes of deterrence and cognitive efficiency. While there are certain conditions where the enforcement of criminal law may lead to an increase in social welfare, particularly with respect to incarceration and stigma, we have also identified the channels through which they could affect behavior. Since such mechanisms can be replicated in less costly ways, society should first try or seek to employ these legal institutions before turning to criminal law as a last resort.

Monismo e dualismo nei rapporti tra Cedu e ordinamento costituzionale interno. Fonti e processi interpretativi

La tesi analizza i rapporti tra l’ordinamento italiano e la Cedu, in particolare la collocazione della Cedu all’interno del sistema delle fonti alla luce della modifica dell’art. 117, comma 1 Cost. Si tratta di un tema molto dibattuto in dottrina, specialmente a seguito dell’entrata in vigore del Trattato di Lisbona. Questa tematica risulta strettamente connessa al profilo dell’interazione tra la Corte di Strasburgo e la Corte costituzionale e i giudici ordinari. L’analisi del profilo statico concernente lo status della Cedu nel sistema italiano deve quindi essere accompagnata dall’esame del profilo dinamico, relativo al ruolo della giurisprudenza della Corte di Strasburgo nell’esperienza dell’ordinamento nazionale. Entrambi i profili di indagine sono esaminati alla luce delle indicazioni provenienti dalla giurisprudenza della Corte costituzionale, della Corte di Cassazione e della Corte di Strasburgo. Prima di essere esaminate singolarmente, queste tematiche richiedono la preliminare ricognizione dei termini della dicotomia tra i due modelli concettuali di riferimento in tema di rapporti interordinamentali: il monismo e il dualismo. Trasferite nel peculiare contesto del sistema Cedu, tali categorie dogmatiche si arricchiscono di ulteriori profili, che esorbitano dalla sistemazione del rapporto tra fonti. La tenuta dei due paradigmi concettuali, che sono nati ed operano nel contesto della teorica delle fonti, deve essere verificata anche rispetto all’attuale fenomeno della produzione europea di diritto giurisprudenziale ed alla capacità paradigmatica assunta dalla giurisprudenza di Strasburgo. Il diritto e le istituzioni giuridiche tendono ad assumere sempre più sembianze giurisdizionali, generando un’osmosi che porta a trasferire il focus dai rapporti interordinamentali ai rapporti tra giurisprudenze.

El depósito irregular de dinero: una aproximación teórica, histórica y ética

El análisis económico de las instituciones jurídicas ha adquirido una importancia considerable en los últimos años. Precisamente, el objetivo esencial de este trabajo se centra en el estudio del análisis económico del contrato de depósito irregular de dinero mediante tres enfoques metodológicos diferentes. El primer capítulo de este trabajo analiza la naturaleza jurídica del contrato de depósito irregular de dinero, examinando las principales características respecto al contrato de préstamo o mutuo. Igualmente, este capítulo estudiará la lógica jurídica propia de ambas instituciones, y cómo los principios generales del derecho fueron descubiertos desde el derecho romano clásico. El segundo capítulo trata de analizar la historia de los hechos económicos y, en particular, el proceso histórico de la violación de los principios tradicionales del derecho en relación al contrato de depósito irregular de dinero. Por último, el capítulo tercero examina los distintos intentos doctrinales realizados para elaborar un nuevo tipo de contrato de depósito bancario de dinero, con el único objetivo de legitimar un sistema bancario con un coeficiente de caja de reserva fraccionaria.

Credit-Default-Swaps and the 2008 Financial Crisis: An Inquiry into the Underlying Legal Origins and the European Union’s Regulatory Reforms

After the 2008 financial crisis, the financial innovation product Credit-Default-Swap (CDS) was widely blamed as the main cause of this crisis. CDS is one type of over-the-counter (OTC) traded derivatives. Before the crisis, the trading of CDS was very popular among the financial institutions. But meanwhile, excessive speculative CDSs transactions in a legal environment of scant regulation accumulated huge risks in the financial system. This dissertation is divided into three parts. In Part I, we discussed the primers of the CDSs and its market development, then we analyzed in detail the roles CDSs had played in this crisis based on economic studies. It is advanced that CDSs not just promoted the eruption of the crisis in 2007 but also exacerbated it in 2008. In part II, we asked ourselves what are the legal origins of this crisis in relation with CDSs, as we believe that financial instruments could only function, positive or negative, under certain legal institutional environment. After an in-depth inquiry, we observed that at least three traditional legal doctrines were eroded or circumvented by OTC derivatives. It is argued that the malfunction of these doctrines, on the one hand, facilitated the proliferation of speculative CDSs transactions; on the other hand, eroded the original risk-control legal mechanism. Therefore, the 2008 crisis could escalate rapidly into a global financial tsunami, which was out of control of the regulators. In Part III, we focused on the European Union’s regulatory reform towards the OTC derivatives market. In specific, EU introduced mandatory central counterparty clearing obligation for qualified OTC derivatives, and requires that all OTC derivatives shall be reported to a trade repository. It is observable that EU’s approach in re-regulating the derivatives market is different with the traditional administrative regulation, but aiming at constructing a new market infrastructure for OTC derivatives.

Law, Informal Institutions and Trust: an Experimental Perspective

This dissertation has studied how legal and non-legal mechanisms affect the levels of trust and trustworthiness in an economy, and whether and when subtle psychological factors are crucial for establishing trust and even for recovering trust from a breach of contract. The first Chapter has addressed the question of whether formal legal enforcement crowds out or crowds in the amount of trust in a society. We find that formal legal mechanisms, especially formal contracts backed by a powerful authority, normally undermine trust except when they are perceived as legitimate, or when there are no strong social norms of fairness (i.e. the population in a society is considerably heterogeneous), or when the environment in which repeated commercial relationships take place becomes highly uncertain. The second Chapter has examined whether the endogenous adoption of a collective punishment institution can help a society coordinate on an efficient outcome, characterized by high levels of trust and trustworthiness. The experimental results show that the endogenous introduction of collective punishment by means of a majority-voting rule does not significantly improve coordination on the efficient equilibrium. Not all subjects seem to be able to anticipate the change in behavior induced by the introduction of the mechanism, and a majority of them vote against it. The third Chapter has explored whether high-trustors adapt their behavior in response to others’ trustworthiness or untrustworthiness more quickly, which in turn supports them to maintain higher default expectations of others’ trustworthiness relative to low-trustors. Our experimental results reveal that high-trustors are better than low-trustors at predicting others’ trustworthiness because they are less susceptible to the anticipated aversive emotions aroused by the potential betrayal and thereby have a higher willingness to acquire the valuable information about their partner’s actions.