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Nuno Garoupa and Roberto Galbiati (spring 2006)

NWO Visitors Grant B 41-522

(Applicant: Giuseppe Dari-Mattiacci)

Developments on Law Enforcement and Litigation

This project aims at extending the current economic literature on law enforcement and litigation at the following levels:
(i)     Economics of Public Law Enforcement: Assessing the efficiency of criminal procedure, in particular plea-bargaining and decriminalization of offenses, as new trends in criminal law. We also intend to explain the different approaches taken in Europe and the US concerning these issues. Finally, we hope to incorporate the role of the prosecutorial office in the economic literature which has been consistently neglected.
(ii)    Litigation: We aim at explaining why the US legal culture enhances the use of contingency fees in litigation whereas the European legal tradition favors flat fees. Rejecting the usual rent-seeking explanations, we hope to provide an efficiency-oriented analysis.
(iii)   Economics of Private Law Enforcement: The Law and Economics literature has lacked the enthusiasm for private law enforcement that some governments have enjoyed in the last couple of years. Norms management, the role of the legal profession, reputation as a substitute for corporate criminal liability are topics to be considered.
(iv)    Comparative Law and Economics: As a branch of Law and Economics is simultaneously under-developed (in theory and institutional analysis) and over-highlighted by the recent literature on Law and Finance. Contrary to the current mainstream, we hope to offer micro-legal explanations of institutional structures in the judicial administration that explain why Europe seems to perform less well than the US in the World Bank 2004 and 2005 rankings.