25-27 Novembre 2005
FACOLTA’ DI ECONOMIA
“R.M. GOODWIN”
P.ZZA S. FRANCESCO 7, SIENA
abstracts
FIRST ANNUAL CONFERENCE
ABSTRACTS
RULES OF PROTECTION, COMPARATIVE INSTITUTIONAL ADVANTAGE AND GLOBALIZATION
FRANCESCO DENOZZA (Univ. di Milano)
LE REGOLE DELLA GLOBALIZZAZIONE TRA (PRETESA) EFFICIENZA E (FINTI)
MERCATI: IL CASO DEI MODELLI DI CORPORATE GOVERNANCE
Uno dei temi che su cui si concentra il dibattito internazionale sulla disciplina delle società per
azioni riguarda il destino dei modelli di corporate governance. Molti studiosi si chiedono se un
modello finirà per prevalere su tutti gli altri o se continuerà la convivenza tra i diversi modelli, di
volta in volta definiti come anglosassone, renano, latino, ecc. Intendo qui sviluppare alcuni
argomenti volti a dimostrare che nessuno dei presupposti su cui si basa la tesi dell’unificazione
dei modelli di corporate governance è accettabile. Sosterrò che ottimi argomenti inducono a non
accettare le seguenti tesi, e cioè che: 1) le principali norme sono attualmente prodotte
direttamente da strutture di mercato o imposte dal mercato ai legislatori statali; 2) che le questioni
attinenti ai modelli di corporate governance sono esclusivamente o prevalentemente di natura
allocativa; 3)che conseguentemente esiste per ogni problema una sola una sola soluzione
efficiente destinata ad imporsi come tale a qualsiasi organismo produttore di regole. Sosterrò al
contrario che: 1)la produzione di norme “globalizzate”avviene attraverso processi che sono, per lo
più, lontanissimi da un corretto modello di mercato; 2) che le questioni attinenti alla corporate
governance hanno implicazioni distributive, che talora sono più importanti di quelle allocative; 3)
che l’ eventuale unificazione non si manifesterà come universale riconoscimento dell’efficienza
dell’una o dell’altra soluzione, ma se mai come conseguenza del prevalere di una specifica
ideologia, che risulti alla fine universalmente condivisa dai legislatori e dai più potenti gruppi di
pressione.
UGO PAGANO (Univ. Siena), MARIANNA BELLOC (Univ. La Sapienza, Roma)
CO-EVOLUTION PATHS OF POLITICS, TECHNOLOGY AND CORPORATE GOVERNANCE
According to Mark Roe, politics influences corporate governance. The separation between control
and ownership is only possible when there is a low “degree of social democracy”. By contrast,
systems, characterised by strong employees’ rights, are necessarily balanced by strong and
concentrated owners. However, causation may also run in the opposite direction: from strong
concentrated ownership to strong employees’ protection. We argue that this form of two-ways
cumulative causation may imply the existence of multiple co-evolution paths of Politics,
Technology and Corporate Governance. We focus on two stylized alternative co-evolution paths.
In the first, the representation of both owners and employees is divided among many agents
(“dispersed equilibrium”), while, in the second, their interests are expressed by few concentrated
agents (“concentrated equilibrium”). We argue that there is both theoretical and empirical support
for the thesis that the direction of causation from politics to corporate governance form is more
relevant in a “dispersed equilibrium” while the direction of causation from corporate governance
to politics is more relevant in a “concentrated equilibrium”. The paper is structured in three
sections. In the first section, we consider the theoretical arguments for which we expect politics to
have an important anticipatory role in a “dispersed equilibrium” and a less elevant reactive role in
a “concentrated equilibrium”, and we consider some stylized facts concerning American and
European Histories that seem to support this view. In the second section, we provide crosscountry and dynamic-panel econometric evidence, which is consistent with the arguments
developed in the first section. Finally, we argue that each system may have a comparative
institutional advantage in particular types of technologies and in certain productive sectors and
that, in turn, this specialization may stabilize the related economic and political arrangements. We
conclude considering some effects of globalization on the two systems and, in particular, the
consequences of the reinforcement of international IPR protection.
1
ROBERTO ARTONI (Univ. Bocconi, Milano), MASSIMO D’ANTONI (Univ. Siena),
MAURIZIO DEL CONTE, STEFANO LIEBEMAN
REGIMI DI PROTEZIONE DEL LAVORO E MODELLI DI STATO SOCIALE IN UNA
PORSPETTIVA COMPARATA
Nella presentazione si fornisce una valutazione di alcuni indici relativi alla rigidità del mercato
del lavoro e alla protezione rispetto alla disoccupazione, nonché di alcune grandezze relative alla
spesa sociale, correntemente utilizzati nei confronti internazionali al fine di individuare diversi
"modelli" di stato sociale. Si individuano diverse debolezze nelle analisi correnti, derivanti da una
insufficiente comprensione delle specificità degli istituti in questione nei diversi sistemi
giuridici/economici. Ci si concentra quindi sui presupposti metodologici che devono essere
verificati quando si vogliono effettuare analisi comparate, e si suggerisce la necessità di un
maggiore dialogo tra giuristi ed economisti su questo campo.
REGULATION AND SELF-REGULATION
GIULIO NAPOLITANO (Univ. Tuscia Viterbo)
L’ANALISI ECONOMICA DEL DIRITTO PUBBLICO
Nell’ambito del diritto pubblico, forse più che in qualsiasi altro campo giuridico, l’analisi
economica costituisce un «ospite inatteso», in grado di rivoluzionarne i metodi di studio e di
affermarne una nuova scientificità. Si tratta, in realtà, di un ‘incontro imprevisto’ per entrambi:
non soltanto, cioè, per il diritto pubblico, le cui uniche deviazioni dal metodo giuridico in passato
ammesse (e poi sempre più aspramente combattute) si sono manifestate sul versante della scienza
politica e dell’amministrazione; ma anche per la stessa analisi economica del diritto, che, alle
origini, si caratterizza per la critica alle forme di intervento pubblico e la fiducia nelle naturali
capacità di autoregolazione del mercato. Ciò conduce ad approfondire gli istituti fondamentali del
common law, quali il contratto e la proprietà, intesi come pilastri della concezione capitalistica
della giustizia. Anche gli orientamenti più sensibili ai profili equitativi concentrano l’attenzione
sullo studio della responsabilità e dell’assicurazione come strumenti connessi o alternativi alla
regolamentazione amministrativa, trascurando gli aspetti istituzionali. Soprattutto a partire dagli
anni Ottanta del ventesimo secolo, tuttavia, la considerazione del comportamento degli attori
istituzionali in termini razionali e il progressivo arricchimento dell’ordine valoriale dell’analisi
economica del diritto consentono di superare le iniziali barriere. Secondo gli interpreti più attenti,
anzi, è proprio nel campo del diritto pubblico che il metodo giuseconomico appare destinato a
fondare nuove ricostruzioni unitarie. D’altra parte, la crisi fiscale degli Stati e l’integrazione dei
mercati portano in primo piano l’esigenza di redistribuire le funzioni di governo, di razionalizzare
la spesa pubblica e di garantire la concorrenza. In questa prospettiva, l’impiego di saperi tecnico
economici è particolarmente raccomandato di fronte a riforme, che, in difetto della necessaria
strumentazione teorica, sono continuamente mutate, con scelte contraddittorie, sulla base di
percezioni intuitive piuttosto che di conoscenze scientifiche. Anche in Italia, di recente, si osserva
che l’analisi economica del diritto pubblico può svolgere un’utile funzione predittiva e
interpretativa: purché non si pretenda di farne un nuovo metodo unico, ideologico e astratto.
FABRIZIO CAFAGGI (European University Institute)
SELF-REGULATORY COMPETITION
European legal and political science is paying growing attention to the circumstance that the
European Community (EC) is increasingly promoting self-regulation as a regulatory strategy in
order to mplement supranational policies. As a matter of fact, well beyond the classic example of
the «new approach» to standardisation, the EC is nowadays developing a differentiated typology
of interventions based, directly or indirectly, on self-regulation at the Member States’ level. Such
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development of the European legal order is certainly impressive in quality and marks a new
orientation in the shaping and management of the Community policies. Moreover, its emergence
has to be situated in a more general tendency towards the identification, within the Nation-States,
of new mechanisms of regulation based on a stable combination of public and private action, as
well as in the tendency to the strengthening of juridical pluralism in the global legal space.
Conceptually original as it can be, the increasing recourse to self-regulation as a regulatory
technique in the European context is nevertheless highly problematic and certainly in need for a
great deal of systematic legal investigation,both at the empirical and theoretical level.
S1 - COMPETITION AND REGULATION/1
A. CHRISTIANSEN, W. KERBER (Philipps-University Marburg)
COMPETITION POLICY WITH OPTIMALLY DIFFERENTIATED RULES INSTEAD OF PER
SE RULES VS. RULE OF REASON
Both in US antitrust and EU competition policy a development to a broader application of rule of
reason instead of per se rules can be observed. In the European discussion the attempt to base
competition policy on a "more economic" approach is mainly seen as improving the economic
analysis in the assessment of specific cases. In this paper it is shown from a general law and
economics-perspective that the application of rules instead of focussing on case-by-case analyses
can have many advantages (regulation costs, rent seeking and knowledge problems). However,
also an additional differentiation of rules through a deeper assessment can have advantages in
regard to the reduction of decision errors of type I and II. Going beyond the traditional discussion
on "per se rules vs. rule of reason", we show that a continuum of more or less differentiated rules
exists between simple per se rules and full-scale market analyses. Based upon law and economics
literature upon the optimal complexity of rules we show in a small model that a competition rule
is optimally differentiated, if the marginal reduction of the sum of error costs (as the marginal
benefit of differentiation) equals the marginal costs of differentiation. This model also allows for
a more detailed analysis of the most important determinants of the optimal degree of ruledifferentiation. Since rules save on regulation costs and welfare losses due to rent seeking and
knowledge problems, from an economic point of view competition policy should consist mainly
of (more or less differentiated) rules and should only rarely rely on case-by-case analysis. This
result suggests that the main task of a "more economic" approach is to use economics for the
formulation of (perhaps rather simple but robust) competition rules that are able to minimize the
sum of error costs and regulation costs.
K. CSERES (European Institute - Universiteit van Amsterdam)
THE IMPACT OF CONSUMER PROTECTION ON COMPETITION AND COMPETITION
LAW: THE CASE OF DEREGULATED MARKETS
Consumer information problems form relevant issues for competition law as well. Information
failures can distort the working of an otherwise competitive market and can lead to sub-optimal
effects and inefficiency. The cause of competitive injury might be rooted in consumer
information asymmetry. Therefore in certain situations the impact of information asymmetries
forms an important part of a careful market assessment. While information imperfections may not
warrant competition scrutiny on the basis of the rule of law, they might exacerbate anticompetitive effects or provide an efficiency justification for such a conduct. The liberalisation of
network industries is one example when more competition does not automatically lead to a more
competitive outcome because consumers have incomplete information. In many countries
liberalisation has led to mixed results. While it improved competition for large users and provided
better retail prices at the same time it raised major difficulties for small consumers to exercise
3
their choice. The complexity of product selection resulted in certain jurisdictions consumers being
disconnected from or disadvantaged in the market. The basic question that is discussed in this
paper is the following. Which role consumer information problems play in achieving and
maintaining competitive markets? When should a specific market failure be tackled on the
supplier or consumer side? How do consumer protection rules addressing information failures
effect the enforcement of competition rules? The key is to know how to design strategies that help
consumers to successfully activate competition and what competition law tools are needed in
order to keep the market structure competitive. It is a difficult task to establish such an efficient
balance, but it is the key to realising effective competition and maximised consumer welfare on
the market.
A. CAVALIERE (Univ. Pavia)
LIBERALIZATION AND ACCESS TO ESSENTIAL FACILITIES – THE CASE OF NATURAL
GAS
L’analisi dei problemi di accesso nei servizi a rete ha tradizionalmente riguardato le fasi di
trasmissione e distribuzione locale. In questi segmenti si riscontrano tipicamente condizioni di
monopolio naturale sia nel settore dell’energia elettrica che in quello del gas naturale. Dopo la
liberalizzazione e nel caso particolare del gas naturale si è posto un problema riguardante
l’accesso ai servizi di stoccaggio. Questi ultimi garantiscono alle imprese, operanti in concorrenza
nella vendita di gas, la flessibilità necessaria per far fronte ad una domanda incerta e volatile, in
presenza di un’offerta che può anche avere un profilo flat. Con la liberalizzazione i servizi di
stoccaggio devono essere offerti separatamente (così prevedono le norme sull’unbundling
dell’ultima direttiva europea) rispetto sia al trasporto che alla vendita di gas naturale. L’accesso
allo stoccaggio (sempre in base all’ultima direttiva) può essere però sia regolato che negoziato. La
discrezionalità lasciata ai singoli Paesi europei circa la scelta della modalità di accesso riflette il
dibattito corrente circa la natura delle infrastrutture di stoccaggio e l’offerta di flessibilità. Lo
stoccaggio non rientra infatti nei casi di monopolio naturale e quindi a rigore potrebbe essere
offerto da diverse imprese in concorrenza tra di loro. Inoltre i servizi di stoccaggio sono
parzialmente sostituibili con altri servizi sul mercato della flessibilità. In parte quindi esiste,
almeno teoricamente, la possibilità di by-pass. Queste caratteristiche tenderebbero quindi ad
escludere che lo stoccaggio rappresenti un’infrastruttura essenziale per competere nel segmento a
valle della vendita di gas. Tuttavia nella fase di avvio della liberalizzazione la persistenza di
monopoli legali nello stoccaggio e le asimmetrie nella disponibilità di sostituti fra imprese
dominanti e nuovi entranti rendono lo stoccaggio una vera e propria barriera all’entrata nella
vendita di gas.
S2 – CORPORATE GOVERNACE/1
L. SACCONI (Univ. di Trento)
A SOCIAL CONTRACT ACCOUNT FOR CSR AS AN EXTENDED MODEL OF CORPORATE
GOVERNANCE
This essay seeks to give a contractarian foundation to the concept of Corporate Social
Responsibility (CSR), meant as an extended model of corporate governance of the firm. Whereas
justificatory issues has been talked in a related paper (Sacconi 2005c), in this essay I focus on the
implementation of and compliance with this normative model. The theory of reputation games,
with reference to the basic game of trust, is introduced in order to make sense of self-regulation as
a way to implement the social contract on the multi-fiduciary model of corporate governance.
This affords understanding of why self-regulation, meant as mere recourse to a long-run strategy
in a repeated trust game, fails. Two basic problems for the functioning of the reputation
4
mechanism are examined: the cognitive fragility problem, and the motivational problem. As
regards the cognitive fragilities of reputation (which result from the impact of unforeseen
contingencies and from bounded rationality), the paper develops the logic and the structure that
self-regulatory norms must satisfy if they are to serve as gap-filling tools with which to remedy
cognitive limitations in the reputation mechanism. The motivation problem then arises from the
possibility of sophisticated abuse by the firm. Developed in this case is an entirely new
application of the theory of conformism-and-reciprocity-based preferences, the result of which is
that the stakeholders refuse to acquiesce to sophisticated abuse on the part of the firm.
S. SEPE (Univ. Siena & Yale Law School)
OPTIMAL DEBT CONTRACT
Under the current model of corporate fiduciary law, informational asymmetry between directors
and creditors makes the debt contract inadequate to govern efficiently the debtor-creditor
relationship. In particular, as currently devised, the debt contract fails to prevent managerial
opportunism; i.e., the managers’ tendency to increase the investment’s risk ex-post. Anticipating
the contract’s failure, creditors ask higher interest rates. Moreover, because of the scarcity of
observable information, creditors tend to pool firms together and price debt on the basis of the
average risk increase. As a result, credit capital is inefficiently allocated. A default duty of
directors to creditors, paired to a regime of textualist interpretation of the debt contract, would
redress the existing inefficiency. By sanctioning directors’ with personal liability for increasing
the level of risk contractually accepted by creditors, the duty would serve as a bonding
mechanism against managerial opportunism and induce directors to fulfill the contract. In
addition, the adoption of a textualist interpretative regime would prompt a Nash bargaining
between the parties, which would give both of them the right incentives to write more statecontingent contracts. In this way, not only would monitoring and opportunity costs be reduced,
but also credit capital would be more efficiently allocated. Indeed, the higher level of
specification of debt contracts would induce creditors to price debt on the basis of such
specification, rather than through a pooling mechanism. As a result, a Pareto improvement in the
market equilibrium could be achieved.
I. BAUM (Univ. Hamburg)
AN ECONOMIC ANALYSIS OF THE CORPORATE LAWYER CLIENT PRIVILEGE
This paper extends the existing models of the lawyer’s privilege and its effect on legal
compliance (specifically Shavell 1989) to the corporate setting. We find that the privilege may
increase the incentives of managers to take illegal actions or actions that expose firms to civil
liability when such liability is borne solely by the firm and not by the managers themselves. We
survey the effects of the privilege on the various functions that corporate lawyers performs or are
expected to perform: 1. Legal advice before actions are chosen; 2. Legal advice regarding the
presentation of evidence in court (litigation); 3. Gate-keeping and Whistle-blowing. While the
different functions of lawyers seem to have been each singularly analyzed with respect to the
privilege, an attempt to draw implications to the entire professional service rendered by lawyers is
still lacking. In view of recent proposals by the SEC to oblige lawyers to report client violations, a
re-examination of the privilege in light of the current functions performed by lawyers in capital
markets seems timely. We suggest a restructuring of the way lawyers provide legal services to
corporate clients, to minimize the social cost of the privilege, by separating the services that
lawyers provide to their corporate clients (much like the separation imposed on auditing firms and
their consulting businesses). Such a separation will tackle many bias problems faced by lawyers
in the current regime and also allow to grant the privilege only to the legal functions where it will
truly serve to promote compliance.
5
S3 - CORPORATE GOVERNANCE / 2
L. ENRIQUES (Univ. Bologna)
COMPANY LAW HARMONIZATION RECONSIDERED: WHAT ROLE FOR THE EC?
The paper highlights harmonization’s drawbacks. Company law harmonization substitutes a
single lawmaker for twenty-five different ones, or in other words a monopolist to twenty-five
competitors, implying a higher risk of excessive regulation and innovation and a lower degree of
experimentation in the company law field. A uniform set of rules also rules out the possibility that
the law takes into account divergent expectations and preferences at the national level. Further,
real-world harmonization turns out to increase the degree of complexity and uncertainty of
national company laws; in addition, EC company law rules are hard to change and therefore little
adaptable to new economic or technological developments. Finally, the harmonization process
itself is costly in terms of lobbying expenditures and the rent extraction opportunities it provides
EC officials and politicians with. The paper concludes that, ideally, the EC should only engage in
free-choice and contractual freedom enhancing harmonization, while recognizing that EC
lawmakers cannot be expected to espouse such a programme and expressing the no more realistic
hope that they will have the courage, in Gérard Hertig’s words, “of doing nothing” instead of
pursuing their ambitious harmonization agenda.
A. KHACHATURYA (CEPS, Bruxelles), J. McCAHERY (University of Amsterdam, ACLE)
TRANSATLANTIC CORPORATE GOVERNANCE REFORM: BRUSSELS SPROUTS OR
WASHINGTON SOUP?
In light of increased and unprecedented integration of transatlantic economies, this article
explores transatlantic regulatory challenges against the background of the latest spate of the
European Commission's proposals on reforming corporate governance in the EU and the US
Sarbanes-Oxley Act. These challenges stem in part from the corporate fallouts across both sides
of the Atlantic and the subsequent regulatory responses, and more comprehensively from the
ambition to design an international regulatory and supervisory system of cooperation in
accounting and auditing. Furthermore, specific challenges related to internal control standards,
auditing and accounting standards, international regulatory and supervisory cooperation are
briefly outlined. The paper concludes by sketching a transatlantic regulatory road-map.
P. SANTELLA (EC, Bank of Italy), G. PAONE (European Commission, Bank of Italy), C.
DRAGO (Univ. Napoli)
HOW INDEPENDENT ARE INDEPENDENT DIRECTORS? THE CASE OF ITALY
In this article we provide an interpretation for the independence requirements contained in the
Italian Corporate Governance Code (Preda Code) and we check them against a proxy for
international best practice, the independence criteria provided in the EC Recommendation on non
executive and supervisory directors of 2005. We find that the Preda Code should be updated in
several respects in order to make it abreast with best practice in the European Union. We then go
on to check to what extent company disclosure for 2003 allows to verify the independence of
directors qualified as independent by the Italian 40 blue chips. The results show such a low level
of compliance (either with Preda and with EC independence criteria) as to suggest that, as far as
independence requirements are concerned, the Italian Preda Code is poorly applied and EU
standards poorly followed.
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S4 – ANTITRUST LAW & ECONOMICS
P. L. PARCU (StudioEconomico)
EUROPEAN DOMINANT POSITION AND AMERICAN MONOPOLIZATION: A UNIFYING
APPROACH
In this paper we give precise meaning to some fundamental legal definitions of European antitrust
law using basic concepts of game theory. Important definitions like the dominant position of a
firm, the abuse of such a dominant position, the special responsibility of the dominant firm,
acquire more precise meaning and operational content. In a competition meta-game, in which
there is a truly dominant firm and competition law is respected, we state in a formal theorem that
the dominant firm must have a dominant strategy, so her choices should never be a source of expost regret. Other players of the game, understanding and anticipating the realization of this
dominant strategy, should optimize their behaviour taking it into account and be more able to
select a best solution among all possible outcomes.
What kind of behaviours a dominant firm can adopt to defend her market shares and economic
position? Following the European Court of Justice intuition that a dominant firm must compete
using normal methods of competition, we argue that a dominant position, whatever its origin, can
be defended only through competition on the merit. Hence, unpredictable behaviours and actions
that a normal firm would not adopt are hints of abusive conduct, even this idea is
formalized in a theorem.
P. SABBATINI (Autorità Garante Concorrenza e Mercato)
ON VERTICAL COMPETITION
Generalmente le relazioni verticali tra imprese vengono concepite in chiave cooperativa. Ciò
mette in ombra una tensione competitiva che a volte risulta ben più intensa della concorrenza
orizzontale. In questo lavoro si propone una diversa organizzazione di analisi già note tesa a
focalizzare i tratti distintivi della concorrenza verticale tra imprese collocate in diversi stadi della
stessa filiera produttiva. Nella seconda parte si indicano i motivi che rendono insufficiente
un’analisi del welfare condotta solo sulla base dell’intensità della concorrenza orizzontale.
Seguono alcune esemplificazioni tratte da recenti casi antitrust europei.
M. GRANIERI (LUISS & Università di Foggia)
TWO-SIDED MARKETS AND THE CREDIT CARD INDUSTRY
This paper explores the two-sided market theory and its implications for the antitrust enforcement
and policy. Such a theory is supposed to cast new light on network industries and to provide an
economic framework for antitrust analysis. About interchange fee in the credit card industry (IF)
some advocate they are indispensable to four-party systems and as such should not be regulated
by public authorities. IF allow those systems to survive and compete with other systems, namely
three-party systems. Because of their alleged pro-competitive effects, card associations should be
free to set IF according to their information and antitrust authorities should unleash IF from
unnecessary antitrust constraints. At the opposite, other scholars and authorities claim that IF are
particularly harmful for competition and for merchants; as a consequence, they should be
forbidden or kept to zero. This paper concludes that, absent a clear evidence that IF are beneficial,
a clear regulatory approach could prove at least less dangerous for markets than antitrust
enforcement or pseudo-regulatory approaches to antitrust enforcement. Regulatory processes can
help authorities to verify information on costs provided by card associations and banks and to set
an efficient IF level accordingly.
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S5 – PROPERTY RULES AND LIABILITY RULES
F. GOMEZ (UPF Barcelona) G. VON WANGENHEIM (Univ. Kassel)
THE COMPLEX ECONOMICS OF NUISANCE LAW: THE TRAGEDY OF BARGAINING
UNDER PROPERTY AND LIABILITY RULES
In the paper we analyze the effects of complex property and liability rules (and of their simpler
counterparts as well) on the four different variables typically present in nuisance cases: care of
injurer and victim as well as activity — investment — levels of injurer and victim. In addition,
given that, conceptually and practically bargaining between the parties implies a more interesting
environment in which to analyze the legal rules protecting entitlements, we will rely heavily on
the Coase theorem to determine care. Inefficiencies under the different legal regimes (all
elementary and first-order complex rules, as well as other higher-order rules) arise due to the
strategic use of investments to improve the bargaining position when bargaining under the
shadow of the legal rules protecting entitlements takes place. We will neglect qualities of
activities which may be particularly important for nuisance, since some uses conflict and others
don’t. However, one could interpret different qualities also as activity levels if we order the
alternative qualities of activities according to their profitability.
A. NICITA (Univ. Siena), R. PARDOLESI (LUISS Roma), M. RIZZOLLI (Univ. Siena)
OPTIONAL LAW AND THE ITALIAN CIVIL CODE: SOME INITIAL THOUGHTS
This article investigates the application of the optional law principles, recently outlined by Ian
Ayres (2005), in the Italian Civil Code. While the ‘location’ of the so-called ‘rules 5 and 6’ in
Common Law has been questioned by several scholars, we argue that optional rules seem to be
pervasive in Continental Code traditions. In particular, we refer to the Italian Civil Code, focusing
on some cases in which the protection of entitlements follows complex liability rules resembling
rule 5 (put options aimed at absorbing positive externalities) and rule 6 (put options aimed at
absorbing negative externalities).
S6 – CORPORATE GOVERNANCE / 3
S. AMOROSINO (Univ. La Sapienza, Roma)
LE AMMINISTRAZIONI DI EMERGENZA DI IMPRESE IN CRISI: PROFILI DI LAW AND
ECONOMICS
Tra i molti tipi di emergenze che nel mondo contemporaneo i pubblici poteri si trovano ad
affrontare talune riguardano le situazioni di grave crisi o irregolarità gestionale di alcune
categorie di imprese, rispetto alle quali i pubblici poteri stessi – per disposto di legge – non
possono rimanere indifferenti o estranei, ma debbono intervenire, a tutela di interessi generali.
Vicende come il default del gruppo Parmalat − l’amministrazione straordinaria per esso disposta,
l’assunzione e ristrutturazione dell’impresa da parte del commissario governativo, sino
all’approvazione giudiziale di un concordato enforced dalle norme, ed al ritorno alla quotazione
in borsa della Parmalat nouvelle − costituiscono interessanti casi di studio. Si propone di
delineare qualche elemento di una possibile visione sistemica.
8
D. PORRINI (Univ. di Lecce), A. DENICOLA (Univ. Bocconi)
ANALISI DI EFFICIENZA DELLE AZIONI DI RESPONSABILITÀ DELLE MINORANZE
Questo lavoro si propone di analizzare l’efficienza dal punto di vista economico dell’istituto
dell’azione di responsabilità degli azionisti di minoranza contro gli amministratori delle loro
società. Per valutare l’efficienza verrà quindi considerato un modello di tipo principal-agent per
fare un’analisi economica della relazione che esiste tra gli azionisti, i principals, e i dirigenti, gli
agents. In presenza di asimmetrie informative, che realisticamente di verificano soprattutto
nell’osservazione da parte degli azionisti dell’esecuzione diligente e fedele dei compiti (bonding)
dei dirigenti, esiste quindi un problema di monitoring e la teoria economica suggerisce soluzioni
legate ad un sistema di incentivi (Boyer e Porrini, 2004). In un modello di tipo principal-agent,
l’azione delle minoranze nei confronti degli amministratori viene rappresentata come un sistema
di regolazione ex post, più propriamente definito come sistema di liability, che estende la
possibilità dell’azione ai soci di minoranza che, in qualità di attori del mercato, in determinati
frangenti, adiscono legalmente quando ritengano di aver subito un danno da una specifica
condotta di una controparte. Attraverso sistemi di regolazione ex post in sostanza viene allargato
il campo d’azione nei confronti dei soggetti del mercato, permettendo ad attori ulteriori di agire
nei propri interessi, attuando così una situazione maggiormente ‘concorrenziale’, maggiore
flessibilità di azione, l’allocazione dell’iniziativa a chi detiene i maggiori incentivi e la creazione
di uno strumento di deterrenza. La leva di tali meccanismi è quella propria della tutela attraverso
liability che nel caso dei mercati finanziari assume un’importanza particolare. Verrà quindi
applicato un modello di tipo principal-agent al fine di analizzare la realistica situazione in cui non
vi sia informazione perfetta e di valutare la deterrenza sugli operatori del mercato ex post, in caso
di violazione dei livelli precauzionali o delle norme di condotta, nonché la funzione di
risarcimento, in modo completo, del danno derivante (Calabresi, 1970; Shavell, 1987).
S7 – PUBLIC ECONOMICS AND THE LAW
PETER CSERNE (Univ. Hamburg)
FREEDOM ON CHOICE AND PATERNALISM IN CONTRACT LAW: A LAW AND
ECONOMICS PERSPECTIVE
The standard law and economics literature usually views paternalism as a wrong reason for
limiting freedom of contract. Do these arguments remain valid if not only (at least one of) the
contracting individuals but also the legislator/regulator is imperfectly rational or not fully
informed? I argue that the tools recently developed within two branches of economic theory
(within the analytics of freedom of choice and in behavioral economics) can offer a more
coherent perspective on the question of freedom of contract and paternalism. The welldocumented and systematic cognitive deficiencies of individuals may justify some paternalism in
certain contractual contexts and thus a change from anti-paternalism to anti-anti-paternalism, a
critical, qualified and limited paternalism. However, behavioural economists are often not aware
of the normative issues (autonomy, liberty) involved in the problem of paternalism or try to
reduce them to a welfarist calculus. I suggest modifying the traditional law and economics
arguments about paternalism in two ways: (1) the empirical findings of behavioural economics
should offer a more realistic view of the situations susceptible for paternalistic intervention, (2)
the analytical tools of the freedom of choice literature help to clarify the non-welfarist dimension
of the problem. In a second step, this partly modified methodological apparatus shall be used to
analyse and criticise some contract law rules in detail.
9
M. SPALLONE, A. CASAGRANDE (LUISS, Rome)
TAX EVASION AND A ROLE FOR THE GOVERNMENT: A GENERAL EQUILIBRIUM
APPROACH
An individual’s decision on tax evasion depends critically on his or her chances of being detected
and the consequent costs. We investigate the relationship between resources devoted to law
enforcement and the extent of dishonesty in taxpayers. This model consists of a population of
agents, each of whom decides whether or not to cheat, and the government which can detect
cheating only by monitoring signals. Each agent produces a signal, the distribution of which is
correlated with his action. Since the government has resource constraints it must choose some
(optimal) fraction of the realized signals to monitor. The key property of this model is that a more
aggressive monitoring policy may, in the long run, free the resource constraint of the government
(although in the short-run the demand of resources increases) as long as enough individuals,
perceiving a higher chance of being detected become honest. Two main implications follow.
First, there may be multiple equilibria with different levels of dishonesty. Second, any increase in
government resources generates a magnification effect which beneficially affects the equilibrium
level of honesty. The genericity of this framework allows to apply the model to different contexts
such as pollution and criminal activities.
S8 – BEHAVIOUR AND ENFORCEMENT
G. IMMORDINO (Un. Salerno), M. PAGANO (Un. Napoli), M. POLO (Un. Bocconi)
NORMS FLEXIBILITY AND PRIVATE INITIATIVE
In this paper we analyze the relationship between the design and enforcement of norms and firms’
initiative. Public intervention has a potential negative effect, related to the distortion in the
incentives of private agents to exert initiative. We model an enforcement problem where a firm
can take a known and lawful action or put effort to find a new more profitable action, which can
be welfare enhancing or reducing. Norms can be designed with different degrees of flexibility.
First, they can simply prohibit ex ante some actions (e.g. no new action can be taken), or they can
identify ex-post unlawfulness looking at the consequences of the actions taken (the new action is
forbidden if welfare reducing). In this latter case, moreover, sanctions can be fine tuned to the
effects to a different degree, according to the range of fines admitted. Deterrence takes two forms:
marginal deterrence, i.e. the ability to guide the choice of the firms among unlawful actions, and
average deterrence, i.e. the decrease in the effort that enables firms to take any new action. We
show that if the enforcer is benevolent an effect based norm is chosen with the maximum range of
fines, that initiative induces to limit enforcement in some cases, that marginal and average
deterrence can conflict and that the enforcement effort is increasing in the likelihood of negative
effects of initiative. With corrupt officers, instead, a rigid norm is chosen, up to a per se
prohibition.
10
M. BASILI, A. NICITA (Univ. Siena)
DETERRENCE AND COMPLIANCE IN DEMERIT POINTS SYSTEMS
This paper attempts to outline the virtues and the perverse effects of a Demerit Point System
(DPS). Under a DPS, once overcome a given threshold of demerit points, infringers are punished
by severe non-monetary sanctions (such as the temporarily suspension of driving license in traffic
enforcement). Surprisingly, no comprehensive economic theory has been provided to support the
widespread implementation of DPS. This paper tries to fill this gap. We show that the impact of a
DPS depends on the distribution of preferences of the population of potential infringers. For some
agents a DPS far from increasing deterrence may actually reinforce deviant behavior. Only for
some group of agents, once a given threshold of accumulated penalties has been reached
compliance may occur. Thus compliance is obtained only after some level of under-deterrence is
tolerated. We then provide some policy suggestions in order to improve general deterrence under
a DPS.
S9 – L&E OF CRIME/1
ROGER BOWLES (Univ. of York)
THE LENGTH OF TIME TO DISCHARGED PRISONER RECONVICTION: A DURATION
MODEL APPROACH
In this paper we use a duration method approach to investigate the factors that affect the risk of
reconviction for a sample of 34,126 offenders who had been convicted in England and Wales and
released from prison during 1998. Distinct from earlier studies that usually model reconviction as
a simple dichotomy of success-fail, we are interested in the time that elapses between release and
a subsequent reconviction. In doing so, we employ different versions of the Cox Proportional
Hazards model as estimation techniques. Also, in contrast to most of the previous studies that
focus on specific types of offences (or groups of offenders) and relatively old datasets, we use a
comprehensive, recent and large dataset, which contains offenders convicted for several offence
types. Our results indicate that several factors such as age, gender, criminal-history and offence
type are strongly associated with the time to reconviction. We also find evidence that several of
these factors are interrelated. For example, our results indicate that the discrepancy that
characterizes the risk of reconviction between males and females becomes weaker as the number
of previous convictions increase. In total, the findings of our study help identify the subgroups of
offenders for whom reconviction risks are greatest and the times when they seem to be most
vulnerable to reconviction. This latter information might be a useful guide to the design of
resettlement programmes.
A. CASSONE, C. MARCHESE (Univ. Piemonte Orientale)
REDISTRIBUTION AND CRIME WHEN AGENTS HAVE LIMITED LIABILITY
Effectiveness of monetary sanctions is reduced for agents who are too poor to bear them in full.
We present a simple model of a society in which there are two types of risk averse agents, who
differ in productivity in legal labor market. We consider transfers from highly productive agents
to low productive ones and discuss the conditions under which redistribution can reduce crime.
11
S10 – REGULATION AND UNCERTAINTY
I. KLYTCHNIKOVA (University of Maryland), M. TURVANI (IUAV)
COST-BENEFIT ANALYSIS AS A REGULATORY ASSESSMENT DECISION PROCEDURE
This paper explores the theoretical foundations of cost-benefit analysis and its justification as a
policy evaluation tool in a historical perspective. First, we review the theoretical underpinnings of
this tool from a perspective of neoclassical economics. Then we discuss the cognitive aspects and
a behavioral justification of cost-benefit analysis. We conclude with a discussion of important
theoretical issues, uncertainty and general equilibrium considerations, which, when they are
omitted, may lead to perverse policy conclusions and potentially disastrous consequences.
Throughout the discussion, we provide examples of how these issues were addressed in practice
by the United States Environmental Protection Agency and in other countries.
M. ATTILA (Univ. Lorand), M. KÁROLY, S. ÁKOS (Univ. Budapest)
HADLEY AND THE RULE OF FORESEEABILITY UNDER COURT’S ERROR AND
UNCERTAINTY
The classical law and economic literature analyses the Hadley rule within specific circumstances.
The rule is understood as a limitation of damages in case of information asymmetry when the
promisee knows his type but the promisor cannot identify it and is only able to assess the
distribution of promisees. Under Hadley, the promisor has to pay only limited damages in case of
breach – these damages should not exceed the amount of loss that the promisor foresaw or should
have foreseen at the time of contracting. The literature compares this rule and the unlimited
damages rule, supposing that the latter provides full compensation. The most important
conclusion of this literature is that the Hadley rule modifies which group of the promisees is
encouraged to contract around. Under full compensation, low value promisees have an incentive
to contract around in order to obtain a lower price; under Hadley, high value promisees have the
same incentive. If some of the assumptions are modified in order to create a more realistic model,
some of the findings will not hold. We suppose that (i) the court is not disposed to cover fully the
non-monetary loss, (ii) the verification of idiosyncratic loss is very costly, and (iii) the law forbids
the contractual limitation of liability. It can be shown that Hadley will now not change the type of
promisees who contract around: even under unlimited damages, the high value promisees will
attempt to contract with liquidated damages.
S11 – INTELLECTUAL PROPERTY
L. FRANZONI (Univ. Bologna), V. DENICOLO’ (Univ. Bologna)
THE OPTIMAL SCOPE OF TRADE SECRETS PROTECTION
The paper deals with the "neglected orphan" in the law and economics of IP, namely trade secrets
law. On the basis of a simple model, we provide a Ors t answer to the following questions: i)
how does the optimal scope of TS protection depend on such factors as the size of the innovation
and the market structure; ii) is TS protection socially preferable to patent protection? iii) how
should TS and patent protection best coexist?
12
A. NICITA (Univ. Siena), M. RIZZOLLI (Univ. Siena), A. ROSSI (Univ. Siena and Paris X)
IP LAW AND ANTITRUST LAW WHEN RIGHTS ARE INCOMPLETE
This paper explores the interface between two important institutional pillars of market exchange –
Intellectual Property (IP) law and Antitrust law – in light of a theory of property rights
incompleteness. This theory interprets property rights as inherently incomplete bundles of uses
and defines externalities as joint claims over rival production uses of undefined entitlements,
irrespective of whether the object of property rights has a tangible or intangible nature. The paper
argues that traditional distinctions between physical property and IP based on attributes of
tangibility, rivalry and excludability are misleading and bases on the substantial homogeneity of
property rights and IPRs an argument supporting the complementarity between IP law and
Antitrust law. Far from being an unjustified ex-post limitation to existing property rights, likely to
undermine ex-ante incentives, Antitrust intervention represents one of the means by which
incompletely specified property rights (both intellectual and tangible) might be redefined over
time as externalities emerge.
F. CUGNO, E. OTTOZ (Univ. Torino)
TRADE SECRET VS. BROAD PATENT: THE ROLE OF LICENSING
We present a simple model where patents are inferior to secrecy, meaning that when private
returns from innovation under the two regimes are the same, society is better off if innovator
chooses not to patent. In our model trade secret licensing is envisaged and inferiority of patents
depends on the lack of an independent invention defense in patent law, while such a defense
currently exists in secrecy and copyright law. Thus, although secrecy is superior to patents, it is
not superior to other types of formal intellectual property rights where independent invention is
allowed (like copyrighted software).
S12 - THE L&E OF NATURAL HAZARD
M. BASILI (Univ. Siena), M. FRANZINI (Univ. La Sapienza Roma)
THE AVIAN FLU DISEASE: A CASE OF PRECAUTIONARY FAILURE
The Precautionary Principle has been proposed as the proper behaviour to adopt in the face of the
new catastrophic risks that have made their appearance in the last decades. We advance a
workable definition of the Precautionary Principle and apply it to the possible outbreak among
humans of the avian flu disease. We make use of a Principle-Agent model and show in which
sense such outbreak can be considered a “Precautionary failure”.
W. WEIGEL (Univ. Vienna)
“VULNERABILITY” AND NATURAL HAZARDS – A LAW AND ECONOMICS PERSPECTIVE
In this paper I explore policies concerning the prevention of and the protection from natural
hazards. Thus the focus is on ex ante measures, both public and private, based on legal remedies.
I will not deal in detail with the problems of rescue, recovery, repairs and compensation by
insurance as well as issues such as lacking coverage by insurance because of “begging the
government” policies by victims of hazards, which are essentially ex post aspects of debris. In
accomplishing the task I build upon the notion of “vulnerability”. “Vulnerability” is a widely used
concept in the assessment of natural hazards by research institutes and disaster management
authorities. The term summarizes the potential impact of hazards on the human built environment,
business, social structure and services, and the natural environment. In case a hazards obtains,
vulnerability is the basis for the likely damages, the hazard might bring about. Upon first
inspection the concept bears similarities with the notion of risk in torts, but also in environmental
13
crimes. However, a critical assessment from the law and economics point of view reveals
shortcomings, which give rise to the recommendation not to apply it in the economic analysis of
legal remedies for disaster prevention without substantial modifications. Vulnerability, as it
appears in the literature, is an ambiguous concept. This is mainly due to the mix of exogenous
parameters with endogenous measures of policies (supplies) and demands. Even if expected
losses (taking into account the full range of primary and secondary effects) are very high, and
definitely higher than they ought to be in the presence of optimal policies, the risk will appear to
be low due to the low probability of occurrence of the natural hazard at hand. In order to make
clear what actually is done when vulnerability is assessed, from a law and economics perspective
it should be re-defined as the risk, broadly defined, which is obtained for a certain date, when no
further steps are taken by governments, residents and other stakeholders. Such measures have
eventually been labelled “status quo predictions”.
M. FAURE (Univerity of Maastricht), R. VAN DER BERGH (RILE)
COMPULSORY INSURANCE OF LOSS TO PROPERTY CAUSED BY NATURAL DISASTERS:
COMPETITION OR SOLIDARITY?
The paper will be structured as follows. In the first section, the different schemes for
compensation of property damage caused by natural disasters will be described. The traditional
forms of public intervention, which provide compensation to victims of natural disasters, will be
analysed and compared with the alternative approach of a compulsory catastrophe extension of
first party property insurance contracts. Particular attention will be given to the French scheme of
compulsory disaster coverage. In the second section, arguments will be advanced to support the
superiority of insurance solutions over governmental relief: whereas the former provide
incentives to take efficient preventive measures and allow for an adequate risk differentiation, the
latter approaches may have negative effects on the total accident costs caused by natural disasters.
However, insurance solutions may no longer be the preferred option if there is insufficient
competition in private insurance markets. In the third section, it will be argued that the French
insurance solution causes anti-competitive effects. These consequences are at odds with the goal
to achieve competitive insurance markets. The French law generates anti-competitive effects that
competition law is willing to prevent: for example, tying clauses are outlawed by Article 81 EC
Treaty and not covered by the group exemption for the insurance industry. It will also be
investigated under which conditions French insurance companies may escape from antitrust
liability by profiting from the state compulsion defence. The last question addressed in the third
section will relate to the potential liability of the French state for having introduced a law that
makes the competition provisions of the EC Treaty ineffective. The fourth section of the paper
will re-assess the anti-competitive consequences of a compulsory catastrophe extension of first
party property insurance. It will be examined whether these restrictions (in as far as they are
based on underlying agreements between insurance companies) could be exempted from the ban
of Article 81 EC Treaty by way of an efficiency defence and, if this is not the case, whether they
should profit from a broadly interpreted solidarity exception. In the absence of existing case law
on these issues (with the exception of the opinion of the Italian Antitrust Authority), this last
section of the paper should be seen as a thought experiment. Its goal is to broaden the debate on
the compensation of property damage caused by natural disasters by balancing the anticompetitive effects, the efficiency advantages and the solidarity features of a compulsory
catastrophe extension of property insurance contracts. Finally, some conclusions will be
presented.
14
DINNER SPEECH SATURDAY
B. ARRUNADA (UPF Barcelona)
SPECIALIZATION ADVANTAGES AND RENT-SEEKING IN RELIGIOUS INTERMEDIATION:
THE CASE OF CATHOLIC CONFESSION
This paper argues that the intermediary role played by the Catholic Church between God and
Christians, a key distinction with Protestantism, faces the standard tradeoff of specialization
benefits and agency costs. The paper applies this tradeoff hypothesis to confession of sins to
priests, an institution that epitomizes such intermediation. It then claims that this hypothesis
fits cognitive, historical and econometric evidence better than a simpler rent-seeking story.
Catholics who confess more often are observed to comply more with the moral code;
however, no relationship is observed between mass attendance and moral compliance. The
data also suggests that the decline of confession might be related to the rise in education,
which makes moral self-enforcement less costly, and to the productivity gap suffered by
confession, given its necessarily interpersonal nature.
D1 –THE (IN)EFFICIENCY OF REGULATION
G. BELLANTUONO (Univ. Trento)
CONTRATTI E REGOLAZIONE NEL SETTORE ELETTRICO
Questo articolo trae spunto dagli studi brevemente illustrati per proporre un’indagine sulle
relazioni contrattuali dei mercati elettrici. In quest’ambito il principale dilemma della
liberalizzazione si presenta con particolare chiarezza. Se da un lato l’apertura alla concorrenza
delle fasi di produzione e vendita promette consistenti riduzioni dei costi, dall’altro il
coordinamento fra segmenti liberalizzati della filiera, nonchè fra questi ultimi ed i monopoli
naturali della trasmissione e della distribuzione, introduce elementi di complessità sconosciuti al
sistema tradizionale. La costruzione dei mercati elettrici, quindi, presuppone regole che siano in
grado di armonizzare i due obiettivi della concorrenza e del coordinamento. L’esperienza dei
primi anni della liberalizzazione dimostra che tale compito è ben lontano dal trovare risposte
soddisfacenti. Nella prospettiva che si propone, l’attenzione si concentra sulle caratteristiche
istituzionali di ciascun sistema nazionale di regolazione. In termini più generali, l’analisi dei
contratti del settore elettrico può prendere le mosse dai problemi economici di investimento e di
coordinamento messi in luce dalla letteratura neoistituzionalista. Tale approccio deve, però,
essere accompagnato da una valutazione approfondita delle caratteristiche istituzionali di ciascun
sistema nazionale di regolazione, verificando il percorso di adattamento al processo di
liberalizzazione seguito da ciascun paese. Nella parte conlcusiva il lavoro suggerisce una
possibile tassonomia delle interazioni fra contratti e regolazione.
M. PASSARO (Autorità per l’energia ed il Ggas)
I RAPPORTI TRA GOVERNO E AUTORITA’ PER L’ENERGIA ELETTRICA E IL GAS ALLA
LUCE DELLA LEGGE DI RIORDINO IN MATERIA ENERGETICA: DALLA SEPARAZIONE
ALL’ASSETTO DINAMICO DELLE COMPETENZE
La legge 23 agosto 2004, n. 239, recante “Riordino del settore energetico, nonché delega al
Governo per il riassetto delle disposizioni vigenti in materia di energia” contiene, tra l’altro,
alcune previsioni suscettibili, da un lato, di modificare i rapporti tra il Governo e l’Autorità per
l’energia elettrica e il gas e, dall’altro, di alterare il modo di intendere l’autonomia della seconda.
15
Diverse disposizioni contenute in questa legge di riordino possono essere lette ed interpretate
nella cennata direzione: quelle relative al coinvolgimento dell’Autorità nella determinazione degli
obiettivi generali di politica energetica, quelle volte al recupero di obiettivi di politica industriale
che assurgono al rango di principi generali, quelle che attribuiscono all’Autorità compiti impropri
per un organismo di regolazione o che ne ridimensionano la rilevanza della propria attività
consultiva, quelle volte a rafforzare il potere di direttiva ministeriale nei confronti dell’Autorità,
quelle infine dirette ad introdurre un potere sostitutivo del Ministro delle attività produttive in
caso di inerzia dell’Autorità. Scopo delle presenti note è quello di soffermarsi su queste
disposizioni e soprattutto sulle ultime, che, fra tutte quelle che riguardano l’Autorità, presentano
maggiori difficoltà di inquadramento e sono suscettibili di condurre ad esiti di problematica
ricomposizione degli equilibri dei poteri coinvolti nel governo dell’energia del Paese.
F. S. MENNINI, F. GIANFRATE, F. SPANDONARO (CEIS, Tor Vergata, Roma)
DYNAMICS AND REGULATION OF EUROPEAN PHARMACEUTICAL MARKET
Fra gli studiosi dell’evoluzione del settore farmaceutico industriale vi è unanime consenso, sulla
maggiore dinamicità dell’industria usa, e di converso sulla insufficiente performance
dell’industria Europea (cfr. Gambardella A. et al., 2000; Arora A. et al., 2000; eiu, 1999; Pavitt,
1998; Powell et al.,1996), che si protrarrebbe ormai dalla metà degli anni Novanta. Con
sfumature lievemente diverse è concorde la valutazione sull’esigenza di un rapido cambiamento
di rotta dell’industria farmaceutica europea, pena la possibilità di vedersi, a medio termine, ridotte
le quote di mercato. Se, inoltre, si tiene conto che il numero delle nces biotech a livello mondiale
è in rapida ascesa, e che questo settore è prevalentemente appannaggio delle imprese usa, la
situazione futura, nel caso in cui alcuni di questi farmaci diventassero dei blockbusters, potrebbe
divenire ancora più critica. Le analisi sembrano, però, parzialmente carenti sul versante delle
motivazioni che possono spiegare i comportamenti della industria Europea, non necessariamente
riconducibili ad un colpevole ritardo o a carenza imprenditoriale: a riprova di ciò osserviamo
come le performance eu sul versante della redditività siano ancora positive, quand’anche non
superiori a quelle usa. Obiettivo del presente lavoro è quindi quello di ri-analizzare le evidenze
statistiche comunemente addotte per giustificare la tesi della attuale «superiorità competitiva» del
settore farmaceutico industriale usa, alla luce delle logiche di politica industriale delle imprese eu.
Ulteriore scopo è quello di valutare in un’ottica integrata (politiche industriali, sistemi di welfare,
politiche regolatorie) quali siano le possibilità future di sviluppo in eu e usa. Una attenzione
particolare verrà deputata all’analisi dei diversi trend caratterizzanti l’industria Europea, al fine di
verificare se esistono segnali di creazione di nuove condizioni all’interno del mercato eu stesso.
Si tenterà poi di delineare alcuni possibili scenari per il settore nel medio termine, valutandone
conseguenze e realizzabilità.
D2 – L&E OF BANKING AND FINANCE
D. MASCIANDARO (Univ. Bocconi, Milano)
DESIGNING AUTHORITIES IN FINANCIAL SUPERVISION: ECONOMICS, POLITICS AND
LAW
The paper will present an analysis of recent trends and determinants in the architectures of
financial supervision, focused on the authorities’ design. We interpret these trends using a path
dependence approach. The work can be useful for evaluating the actual worldwide situation,
using a sample of 89 countries. The starting point is the blurring effect that is taking place in the
banking and financial industry. There has been increasing integration of the banking, securities
16
and insurance markets, as well as their respective products and instruments. The financial blurring
process poses, in the debate on financial supervisory structure, the dilemma between the single
financial authority model (SFA) versus multi-authorities model. The success of the SFA model
seems to be growing, particularly in the European area. Among the 15 members of the European
Union prior to expansion, Austria, Denmark, Germany, Sweden, and the UK have chosen to
delegate supervision to a single authority, different from the central bank. The single supervisor
has been adopted also in four new EU member countries - Estonia, Hungary, Latvia, Malta - and
in Norway and Iceland too. Outside Europe a unified agency was established in Korea, Japan,
and, among the small countries, in Bahrain, Bermuda, Cayman Islands, Gibraltar, Maldives,
Nicaragua, Singapore and United Arab Emirates; see De Luna Martinez and Rose (2003). The
paper will be organized as follows. Section 1 proposes a path dependence approach to study the
single authority versus multi-authority dilemma, considering the level of financial supervision
consolidation as the dependent variable. The financial authorities concentration index is used in
section 2 to identify this dependent variable. Then, we ask what role the central bank plays in the
various national supervisory settings, discovering that the degree of supervision unification seems
to be inversely correlated with central bank involvement in supervision itself. Section 3 discusses
the possible explanation of this trade-off, while in section 4 an econometric analysis is performed.
Section 5 draws conclusions as well as perspectives for further research.
E. BARUCCI (Politecnico, Milano), S. CECCACCI (Univ. Tor Vergata Roma)
ON OWNERSHIP STRUCTURE, INVESTOR PROTECTION AND COMPANY VALUE IN THE
ITALIAN FINANCIAL MARKET
We evaluate the relationship among ownership structure, corporate governanceinvestor protection
and company value in the Italian stock exchange. We show that company value is negatively
related to the stake of the largest shareholder and that controlled companies have valuation ratios
lower than non controlled-public companies. Companies controlled by another company (a
family) are negatively (positively) valued by the market. Recent innovations on regulation of
financial markets aiming to improve investor protection are associated with a higher company
value and a weaker negative effect of ownership concentration on company value.
C. SONNTAG (Univ. Nancy2)
THE ECONOMIC FOUNDATIONS OF THE PROHIBITION OF INSIDER TRADING
In this paper, we propose to use the economic implications of insider trading to propose an
economic theory of the prohibition of insider trading. In the O rst part, we show that the external
e§ects of insider trading imply an intervention on the market to implement an optimal amount of
transactions. Then, in the second part, we show that the individual compensation of investors for
insider trading fails. The question of a collective compensation or a prohibition is then analysed.
Finally, in the third part, we show how a dynamic view of the economic foundements of insider
trading are crucial to determine the optimal structure of law for insider trading.
17
D3 – COOPERATION AND PUNISHMENT
M. CASARI, (Purdue University), L. LUINI, (Univ. Siena)
GROUP COOPERATION UNDER ALTERNATIVE PEER PUNISHMENT TECHNOLOGY: AN
EXPERIMENT
We study experimentally group cooperation under alternative peer punishment institutions. We
find that (1) information about how much others have punished are irrelevant for punishment
decisions; (2) when a coalition of at least two subjects in the group must agree before somebody
is punished, group performance dramatically increases; we show that this institution reduces
perverse punishment and encourages pro-social behavior. Furthermore, the results suggest that the
strong emotional component that drives agents to punish alters their ability to behave strategically
M. D’ANTONI, R. GALBIATI, (Univ. Siena)
A SIGNALING THEORY OF NONMONETARY SANCTIONS
It is a widely accepted conclusion of the economic literature on deterrence that nonmonetary
sanctions should be introduced only when monetary fines have been used up to their maximum
extent. However, this conclusion is at odds with what is commonly observed e.g. in the case of
deterrence of driving offenses, where nonmonetary sanctions such as licence suspension or
vehicle withdrawal are extensively used, even though it would be possible to apply a monetary
sanction of equivalent value. In this paper it is shown that when the sanctioning policy conveys
information about the riskiness of the sanctioned behavior, the conclusion about the optimal use
of nonmonetary sanctions may be different. Namely, the use of nonmonetary sanctions can be
optimal even though the monetary fine is not maximal. The argument is formalized in a model
with rational though uninformed individuals, who know that the enforcer has superior information
about the riskiness of action but are uncertain about the true objectives of the enforcer.
T. FRIEHE (Univ. of Main)
OPTIMAL SANCTIONS AND ENDOGENEITY OF DIFFERENCES IN DETECTION
PROBABILITIES
Offenders differ with respect to their detection probability in reality. Bebchuk and Kaplow (1993)
conclude that sanctions should increase in the ability to avoid detection. We endogenize these
differences in ability and find that this can reverse the optimal sanction schedule. This paper
thereby demonstrates how incentives for seemingly remote decisions can be manipulated through
sanction structures.
D4 – EFFICIENCY AND COMPETITION POLICY
G. FONDERICO (Univ. Tuscia Viterbo)
LE ECONOMIE ESTERNE E L’EFFICIENZA DEL MERCATO NEL DIRITTO DELLA
CONCORRENZA
La relazione esamina la nozione di economie esterne e ne approfondisce il significato nel
confronto con le categorie giuridiche dei diritti di proprietà e delle altre situazioni giuridiche
soggettive. A questo fine, la relazione ricostruisce l’evoluzione e gli aspetti irrisolti della nozione
di economie esterne ed evidenzia talune incertezze ed incongruenze degli approcci applicativi
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oggi prevalenti. Vengono affrontati, quali esempi, casi recenti del diritto della concorrenza, legati
sia a posizioni dominanti sia ad intese. La relazione conclude che la nozione conserva validità per
descrivere i caratteri di talune attività di produzione o di consumo. Essa, tuttavia, può condurre ad
esiti fuorvianti quando se ne vogliano trarre implicazioni normative o di politica regolatoria.
L. CAMILLI (LUISS Roma)
OPTIMAL AND ACTUAL FINES IN CARTEL CASES: THE EUROPEAN CHALLENGE
If the economic analysis has proved to be an essential tool in catching up a more coherent and
efficient application of the substantive provisions of antitrust law, the same would happen if
economic concepts were utilized in the enforcement of these rules. The increased amount of fines
could provide a hint on that point, since it shows a clear turn towards a higher consideration of the
deterrent aim of the sanctions for undoubtedly harmful illicit conduct, like hard-core cartels.
Actually the acknowledgement of the rational crime doctrine, then the role of the deterrent aim, is
the essential starting point of an economic analysis of the enforcement. Once recognized the
deterrent function, a model of punishment based on the effects of the infringement can be built.
Based on the main results of the economics of punishment, an analysis of the elements necessary
to set the optimal fine is carried out with specific reference to the hard-core cartels; thus some
guidelines are carved out and, within this economic context, even legal concepts like the
proportionality of the punishment get the due consideration.
A. RENDA (LUISS Roma)
IMPACT ASSESSMENT IN THE EU: THE STATE OF THE ART AND THE ART OF THE STATE
The importance of ex ante and ex post impact assessment in streamlining the regulatory
environment and improving the legislative process has been stressed by many scholars in the
social sciences and is testified to by a number of international best practices. The potential
benefits of regulatory impact assessment are also being re-discovered by EU officials, who lose
no chance to recall that the Commission’s ambitious “Growth and Jobs” strategy heavily depends
on the pervasiveness of impact assessment in the regulatory process at EU and member state
level. Behind the façade, however, the available evidence reveals that the quality of the
Commission’s extended impact assessments does not support such enthusiasm. If no major
change is introduced, the gap between promises and results is unlikely to be closed in the years to
come.
This paper has three main purposes:1) to provide an overview of the state of the art on impact
assessment, with a focus on the latest developments in the US, UK and EU; 2) to present a
scorecard analysis of the Commission’s extended impact assessments, by documenting that the
quality of impact assessments is both low and decreasing over time; and 3) to propose ten
roadmaps for improving the transparency, efficiency and effectiveness of the EU Integrated
Impact Assessment model.
D5 – DEMOCRACY, CONSTITUTION AND FEDERALISM
J. FISCHER (Univ of St. Gallen):
THE IMPACT OF DIRECT DEMOCRACY ON SENTENCING BEHAVIOR
The paper aims to gain insight into how political institutions affect the sentencing behavior in
different political systems. It is assumed that in more direct democratic systems an implicit
contract based on mutual trust exists between the citizen and the state, in contrast to a command
and control structure in a more representative political system. Based on empirical evidence on
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behavior of tax administrations in Switzerland, it is conjectured that in more direct democratic
cantons punishment of severe infractions should be significantly harder than in more
representative systems, but punishment of less severe offenses might be more in favor of a fast reintegration into society of the convicted. Using data on 40 000 cases of Swiss first offenders who
were found guilty of drunk driving between 1994 and 2001, empirical analyses at the individual
and cantonal level seem to support these hypotheses.
P. KONZAL (Univ. Torino):
AN ECONOMIC ANALYSIS OF SEPARATION OF POWERS
One of the most important institutional settings in each state is separation of powers. That setting
defines the real area in which each of the groups of policy makers, politicians, bureaucrats etc.
can act. Each of possible choices, which can be made, when designing such a system (e.g. while
writing or amending a constitution or set of basic laws, which would play similar role), has
substantial consequences. They can be economical, social, they can influence the incentives
which are given to the politicians to free-ride on the society or their colleagues from the party,
they can influence their public-interest orientation etc. Analyzing such consequences is an
important task, especially if we take into consideration, that more and more developing countries
plan to write for themselves and their societies new constitution. Also the on-going debate
concerning the EU constitution can be another factor showing the accuracy of such a discussion.
Therefore, it is crucial to analyze mentioned consequences. Considering the best methodology for
such analysis, I chose to apply economic analysis to political institutions. In applying economic
analysis I follow the approach described by Roger B. Myerson (2000). ‘Economic analysis of
political institutions are defined as studying political institutions by the methods for analysis of
competitive behavior that economists have developed. Which means, that they are not limited
only to analysis of the effects that separation of powers and different institutional settings have on
the market place. As can be derived from the introduction to that essay, I also decided to bound
the scope of it only to analysis of separation of powers which are enclosed in the doctrine of
constitutionalism. For the sake of simplicity, even if in some countries parts of the legal
institutions described are not introduced within the constitution (e.g. electoral system, ways of
choosing local representative etc.), I will not differentiate between them, as the main subject of
that paper is separation of powers and its consequences.
N. FIORINO (Univ. L’Aquila), R. RICCIUTI (Univ. Firenze)
LEGISLATURE AND CONSTITUENCY SIZE IN ITALIAN REGIONS: FORECASTING THE
EFFECTS OF A REFORM
The economic theory of government has modeled fiscal policy in democratic regimes as the result
of competition between different pressure groups.. In this paper we build upon the literature
outlined above and examine regional government expenditure in Italy from 1980 to 2000.
Specifically, we attempt to test the effect of the number of regional legislators and constituency
size on regional spending. Two parallel processes have occurred in the Italian administrative
regions in the last few years. First, the regions have been invested with the power to write their
own constitutions (Statutes), which policy makers tend to use to expand the legislature. Second,
an important process of devolution of tax rates has occurred. As these processes of regional
institutional and fiscal reform are still in progress, this paper aims to highlight some indications
on how important legislative structure is to explain spending behavior in Italian regions. This may
be relevant in an evaluation of ongoing changes and to gain a picture of the new institutional
setting of these jurisdictions. We find that an increase in the number of legislators induces an
increase in regional expenditure in both models. Results are consistent across the two different
estimation techniques. Regional expenditure also appears to be linked to the size of national
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transfers and to revenue raised by the regional authority (in the latter only in IV estimates), but
not to the regional GDP. Our estimates allow us to forecast a significant increase in government
spending per capita in the regions that are enlarging their legislatures using the window of
opportunity created by new Statutes. This effect is not in line with current attempts to curb
government spending in Italy, and potentially places the efforts of regional policies in contrast
with national goals. We believe that this kind of analysis should be considered before designing
and implementing institutional reforms.
D6 – THEOREMS ON COASE
E. SAVAGLIO (Univ. Pescara), A. NICITA (Univ. Siena)
THE POSSIBILITY OF A COASEAN LIBERAL: A SOLUTION FOR A TRAGEDY?
In a world of zero (alienable) rights, conflicting preferences will persist unless any hierarchy of
social preferences is introduced by any allocation of alienable rights. This system should define,
for every couple of possible contingencies, an alienable right over that couple. But who will
introduce such a system? Who will have the right to introduce such a system? The system of
rights should be one that will be respected by all other agents, and thus should provide a credible
enforcement system. Who will pay for this system to be generated? These questions show how
the assumption of having well-defined alienable rights in the first instance is very strong and
could be justified only as an ad hoc assumption (as in the Coase theorem). As a consequence,
when agents fail to introduce any well-defined allocation of property rights over the relevant
resources, conflicting preferences persist and the impossibility of a Paretian Liberal will extend to
a Coasean Liberal as well: the absence of any system of alienable right will inhibit the Paretian
efficient outcome even in a world of zero transaction costs. This paper compares the Sen’s
paradox on the Paretian liberal (1970) and the Coase theorem (1960). We show that if we agree
with Coase theorem we have to deny the Sen’s Paradox: in fact, we investigate the possibility for
a Paretian Liberal by applying the Coase Theorem. Then we p oint out that a Paretian Liberal
shows also the conditions for the impossibility result of a Coasean Liberal.
S. FEREY (Univ. Nancy2)
COASE THEOREM, ECONOMICS AND JUSTICE
The aim of our paper is not to deal with the whole controversies and debates about “Coase
Theorem” nor to put the ‘right’ interpretation on Coase theorem but rather to propose a possible
interpretation from an epistemological and methodological point of view. We would like to put
the stress on two points. Firstly, Coase theorem may be considered, epistemologically, as a purely
analytic statement, nor empirical nor normative. Secondly, it seems to us that this analytical
statement has broad normative consequences insofar as it draws a frontier between justice – or
law – on the one hand, and economics on the other hand. This characterization of the theorem
makes it possible to assess the role of Coase theorem in the birth of law and economics movement
inside the Chicago school.
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E. BAFFI (Univ. La Sapienza, Roma)
IL PROBLEMA DELL’INTERNALIZZAZIONE DEI COSTI SOCIALI E LE IDEE DI RONALD
COASE
Nel presente lavoro si intende esaminare l’influenza del pensiero di Ronald Coase sul trattamento
dei problemi legati alle esternalità da parte di economisti e giuseconomisti. L’economista inglese
mosse una serie di critiche al sistema delle tasse pigoviane, critiche di cui il teorema di Coase
costituisce solo la più conosciuta. Nel suo contributo del 1960, Ronald Coase voleva mettere in
evidenza come i meccanismi di internalizzazione dei costi sociali non fossero sempre socialmente
utili, e individuava altre soluzioni istituzionali a cui gli ordinamenti sono soliti ricorre. Una di
queste soluzioni è rappresentata dal semplice autorizzare un’attività dannosa, senza realizzare
meccanismi di internalizzazione dei costi sociali. L’analisi di Coase non ha influito molto sul
pensiero degli economisti, per cui le sue idee vengono normalmente ridotte al noto teorema, che
appare più come un’elegante riflessione astratta che uno strumento per individuare soluzioni
istituzionali ai problemi economici delle società. Fra i giuseconomisti l’insegnamento di Coase ha
avuto una maggiore influenza, anche se l’idea che la risposta ottimale alla presenza dei costi
esterni consisterebbe nella internalizzazione dei costi sociali emerge spesso, quasi
inconsapevolmente, in molti lavori. Il rischio di un tale atteggiamento sta nella possibilità di
ravvisare sistemi di internalizzazione dei costi sociali in istituti giuridici che non appaiono avere
alla loro base una tale logica.
D7 – L&E OF CRIME / 2
L. DALLA PELLEGRINA (Univ. Bocconi Milano)
CRIME DETERRENCE AND COURTS EFFICIENCY
It is widely assessed (Mühl and Vereeck, 2000; Torre, 2003; Listokin, 2005) that trial delays
seriously undermine the deterrence effect of justice. Dilution of the burden of punishment
imposed by courts operates as a discounting factor which is decreasing the longer it takes to
pronounce a verdict. This paper focuses on the case of Italy. Despite the debate has been so far
concentrating on the excessive length of civil procedures (Marchesi 1998), criminal judicial
procedures in Italy normally take longer than in other countries to be completed. Following the
approach of Marselli and Vannini (1996), we use the known-to-unknown authors rate of crimes to
measure the probability of detection, the number of guilty sentences pronounced over the total
number of trials in order to take account of the probability of being condemned, and the length of
punishment (years of jail, or fines) representing the burden of pain inflicted to guilty fellows.
Furthermore, we control for other standard factors affecting the rate of criminality, such as percapita income, unemployment, credit availability, education and public expenditure. Besides
these factors, we claim that, mostly in Italy, the length of trial procedures positively and heavily
affects the willingness to commit crimes . However, due to its endogenous nature, this variable
must be carefully treated, and its impact on criminality needs some specific estimation procedures
in order to avoid biased results.
G. DI VITA (Univ. Catania)
CORRUPTION, EXOGENOUS CHANGES IN INCENTIVES AND DETERRENCE
In this article we apply and extend the model elaborated by Acemoglu and Verdier in their
seminal paper (2000) to examine how the economy represented in their theoretical framework
responds to an exogenous change in their the agent’s incentive. In particular we focus on the
consequences of a famous sentence of the Italian Supreme Court in plenary session, n. 500/99 in
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which a revolutionary interpretation of the civil liability rules is introduced, allowing private
agents to appear before the court to demand reimbursement for the damages suffered as a
consequence of illicit behavior of the public administration. This is one of the few cases in which
the judex substantially makes law in a system of civil law, and the modification in incentive
whether or not to be corrupted comes from an authority that is not part of the game (the
jurisdictional power). Basing our affirmations on the model, we can say that corruption may have
declined in Italy since the year 2000, as a result of a change in the incentives for both private
agents and bureaucrats.
E. MONTANI (Univ. Bocconi Milano)
IL DIRITTO PENALE ITALIANO E L’ANALISI ECONOMICA. PROVE DI DIALOGO
I recenti scandali societari, negli Stati Uniti come in Europa, hanno riacceso un dibattito mai
sopito tra i sostenitori della capacità di autoregolamentazione del mercato e coloro che ritengono
non sia possibile abdicare al presidio penalistico in relazione alla criminalità d’impresa. Il
presente articolo si propone di verificare quale sia – e quale è auspicabile divenga – il ruolo del
diritto penale rispetto all’attività economica utilizzando, accanto agli strumenti classici del
giurista, i suggerimenti concettuali mutuati dall’analisi economica del diritto applicata al diritto
penale. Tale analisi non può prescindere dalla valutazione dell’efficacia e dell’efficienza del
diritto penale nel campo dell’agire economico che verrà sondata in una prospettiva fattuale,
mediante un’indagine empirica avente ad oggetto l’efficacia deterrente del delitto di false
comunicazioni sociali nel decennio 1992-2002 a Milano.
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