Pierre Kopp

 ECONOMICS OF CRIMINAL LAW 
(2016-2017)

Module Overview: Law and Economics includes the study of both economics of crime and criminal law. Besides ordinary criminals, CEOs and other business leaders are often those committing criminal offenses such as corruption, money-laundering or misuse of corporate assets. 

The law influences the behaviour of market participants who either follow the laws, circumvent them or chose to relocate their business. 

Criminal law also regulates individual behaviour within the firm where employees and executives can be prosecuted for many offenses including moral and sexual harassment. 

Corporate criminal liability may be sought if the criminal actions were done for the benefit of the company, or as a result of negligence or if they occurred due to a lack of responsible management by the company. Then, the corporation can be prosecuted and punished.

This module sets out the foundations of criminal economic analysis, then presents an in-depth analysis of the field’s latest developments. In a post-beckerian perspective, information bias and cognitive bias enhance the analysis of criminal behaviours. 

During this module, we will keep in mind that criminal control is a public policy and that, as such, its efficiency can and should be evaluated.  At the same time, we will conduct the comparative analysis of different legal systems.

Thanks to this module, students will glimpse at the numerous possibilities of Law and Economics’ practical applications.   

International institutions and government agencies are looking for economists with these skills and the ability to evaluate local and national policies against violent crime, blue collar crime, corporate crime and organized crime. 

Grading scheme: class participation (20%), presentation (20%), written final exam (30%), debates (joutes oratoires) (30%).

 

Prerequisit. Read: Pierre Kopp, 2016 "Introduction and history of Law and Economics" , notes taken by a student during my class in master1 last year ; Guido and Melamed, A. Douglas, 1972, Property Rules, Liability Rules, and Inalienability: One View of the Cathedral, Faculty Scholarship Serie. 

Seminar 1: Crime and rational choice (I) 
Richard Posner, 1998, Economic Analysis of the Law, Ninth Edition. Wolter Kluvers, chapter 7, Criminal Law, section 7.1, 
The Economic Nature and Function of Criminal Law , p 237.
Class: criminal law: a model of rational choice (I).
Discussion: open discussion

Seminar 2: Crime and rational choice (II)
David Friedman, 2000, Law’s Order, Princeton. Read chapter 15,
Criminal Law, p. 223.
Mitchel Polinsky ; Steven Shavell, 1999, 
The Economic Theory of Public Enforcement of Law
, working paper 6993, NBER, 54 p.
Class: criminal law: a model of rational choice (II).
Discussion: open discussion

Seminar 3: Private criminal law? 
David Friedman, 2000, Law’s Order, Princeton, chapter 15, Criminal Law,
The Crime Tort Puzzle, p. 281
Presentation 1: Is private law an issue to tackle crime?
Presentation 2: An exemple of efficient religious or private law.
 Have a look to code Hammurabi, Bible, Coran, and to Claude Ménard ; Mary Shirley, Handbook of New Institutional Economics, Elinor Ostrom, Doing Institutional Analysis: Digging Deeper than Markets and Hierarchies.

Seminar 4: Efficient procedures

Jean Danet,
Défendre, pour une défense pénale critique, Dalloz, 2004, 2e édition.
Yeonatan Givati, The comparative law and economics of plea bargaining: theory and evidence, Harvard Law School, discussion paper  n°39, http://www.law.harvard.edu/programs/olin_center/fellows_papers/pdf/Givati_39.pdf
Presentation 1: Is “Two strikes and you are out” a good thing?
Presentation 2: Is appeal an efficient procedure?

Seminar 5: Efficient Institutions
(Continental Law versus Common Law)
Sophie Harnay, Alain Marciano, Posner,
L'efficacité des règles de Common Law, Michalon, 2003, pp 93-113.
Bruno Deffains ; Dominique Demougin ; Claude Fluet,
Economie des procédures judiciaires, Revue économique, 2007/6, vol. 58, pp.1265-1290.
Presentation 1: Is French criminal business law efficient ?
Presentation 2: Criminal trial in France and in the US. Read: Antoine Garapon ; Ioannis Papadopoulos, 2003, Juger en Amérique et en France, Odile Jacob, 323 p.

Seminar 6: Ethic or enforcement
Robert Cooter ; Thomas Ulen, Law and Economics, 6th Edition, Pearson, 2014, 6th edition, section,
An Economic Theory of Crime and Punishment, Bad Crimes and Good People, p. 477.
Presentation 1:  Is there a "market" for crime? Read François Facchini, 2000,
Results of Monetary Priceless on Political Coordination, Journal des Economistes et des Etudes Humaines, vol 10, n°2/3 juin/septembre, pp. 345-361. 
Presentation 2:  Frame in a Cooter and Ulen's perspective an answer to the following question: Why most of the people would not kill his/her mother even if she is very rich and the probability to be caught nil?

Seminar 7: Are they fully rational?
Robert Cooter ; Thomas Ulen, Law and Economics, 6th Edition – Pearson, 2014, section, An Economic Theory of Crime and Punishment, Diminished Rationality, Saturday Night Fever, p. 466.
Jennifer Arlen ; Reinier Kraakman, Corporate liability and rational behaviour, 1997, Controlling Corporate Misconduct: An Analysis of Corporate Liability RegimeNew York University Law Review, vol. 72, n°4, pp. 667-679, read pages 707-712 & read the appendix equations 1 to 14.
Pierre Kopp, 2016, Exponential and hyperbolic discountingfrom the blackboard, 2016.
Presentation 1:  Corporate liability and rational behaviour. 
Presentation 2:  Nudges and crime control?

Seminar 8: Sex, law and feminism
(Discussion around a book by Richard Posner
, 1992, Sex and Reason, Harvard university Press)
Robin West,
Sex and Reason, and a Taste for the Absurd, A Review, Georgetown Public Law and Theory Research paper n°11/71, pp. 2413-2456. Read from pp 2413 to 2434 (neutral sexual preferences).
Richard Posner, 1992, 
The Radical Feminist Critique of Sex and Reason,
 vol. 25 Connecticut Law Review, n°515, pp. 515-531.
Presentation 1:  Is there a "market" for sex?
Presentation 2:  What should be prohibitied? Read Pascale Robert Diard, Le Monde, 23 mai 2009 "Quand l'affaire Baudelaire devient le Canossa judiciaire" and Charles Baudelaire, "Les fleurs du mal" ;  Pascale Robert-Diard, Le Monde, 23 août 2016, Le juge et les petites culottes, See "La vérité" a moovie by Henri-Georges Clouzot with Brigitte Bardot ; read  Gustave FlaubertMadame Bovary, and  Ministère public contre M. Gustave Flaubert, "Réquisitoire de M. l'avocat impérial, M. Ernest Pinard lors du  Procès intenté à M. Gustave Flaubert devant le tribunal correctionnel de Paris, (6e chambre) sous la présidence de M. Dubarle, audiences des 31 janvier et 7 février 1857" Axel Kahn versus Elisabeth Badinter in  Le Monde, 12 novembre 2013 ; 

Seminar 9: Toward a new paternalism?
Gérard Saint Paul, 2012, Liberté et société post-utilitariste, working paper IFI, n°745, septembre.
Christian Ben-Lakdhar ; Pierre Kopp, Faut-il légaliser le cannabis en France ? Un bilan socio-économiqueEconomie et Prévision, à paraître, 2016.
Presentation 1: Is a welfare function relevant to decide whether cannabis should be legalized?
Presentation 2: Is a market for organs a good thing?

Seminar 10: Figthing organized crime
James Buchanan,
1974, 
A Defense of Organized Crime, in The Econmic of Crime and Punishement, ed. Simon Rottenberg, Washington DC (The American Enterprise Institute).
Nuno Garoupa, 2000,
The Economic of Organized Crime and Optimal Enforcement,
Economic Enquiry, vol. 38, n°2, pp. 278-288.
Presentation 1:  Peter Reuter's Disorganized crime theory. Read Peter Reuter, 1985, Disorganized Crime: Illegal Markets and the Mafia (Organization Studies), paperback, october 21.
Presentation 2: Are drug dealers living with their mother or driving expensive cars? Read Peter Reuter, Robert Mac Coun, Patrick Murphy,
Money from Crime, A Study of the Economics of Drug Dealing in Washington DC, RAND.Listen to a TED's Talks by Steven Levitt, 
https://www.ted.com/talks/steven_levitt_analyzes_crack_economics. Peter Reuter, 

Seminar 11: Fighting transnational corruption

Club des juristes, 2015, Rapport
Du renforcement de la lutte contra la corruption transnationale
, 48 pages.
Daniel Schimmel, mars 2016,
Civil Litigations Following the Resolution of Criminal Matters, Foley-Hoag LLP, 5 pages.
Presentation 1:   Are the US setting the international standard?
Presentation 2:  Are NPA's efficient? 

Conclusion
Read again: 
A. Mitchel Polinsky ; Steven Shavell, 1999, The Economic Theory of Public Enforcement of Law, working paper 6993, NBER, 54 p.

Additional readings
Pranab Bardhan, 2003, The Economist's Approach to the Problem of Corruption, revised version of talk delivered 30th April 2003 UEA, paper earmarked for provisional Special Edition' of World Development Monitoring Corruption: Evidence from a Field.Bruno Deffains ; Samuel Ferrey, 2011, Agir et juger, comment les économistes pensent le droit, Université Panthéon-Assas.
David Friedman, 2000, Law’s Order, Princeton, chapter 17, Other Paths, p.261
Richard Posner, 1998, Economic Analysis of the Law, Ninth Edition, Wolter Kluvers, Civil and Criminal Procedure, section 21.7, Plea Bargaining and the Reform of Criminal Procedure, and the Futility Thesis, p. 616.Guillaume Royer, 2009, L'efficience en droit pénal économique,Etude de droit positif à la lumière de l'analyse économique du droit, LGDJ, 465 p.
Francis Caballero, 2010, Droit du sexe, LGDJ, 768 pages.  
Emmanuel PierratLe sexe et la loi, La Musardine, collection l'Attrape cœur, 2015, 258 pages.
The Economist, Jail Bail, 8/11/2016

Examination: read carrefully Yeonatan Givati, The comparative law and economics of plea bargaining: theory and evidenceHarvard Law School, discussion paper  n°39.  

 

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