Capture Theory and the Public Interest: Balancing Competing Values to Ensure Regulatory Effectiveness

Problems arise when a regulatory agency acts in the interests of the industry it is charged with regulating, rather than in the public interest. When a governmental agency established to regulate an industry for the benefit of society acts instead for the interests of the industry it is regulating, it has been “captured” by the industry. This article examines the level of input received from the regulated community and the tendency of regulatory agency capture. Here, the proposed zone of effectiveness suggests a balance between the two scopes by incorporating a stronger focus on public interest.     

Situational deterrence and claim padding: results from a randomized field experiment

While it is generally argued that threats of legal sanctions are more effective with offenders involved in economic crimes than with delinquents committing more conventional crimes, such an affirmation rests on weak empirical evidence. Also, most studies supporting this proposition were conducted with non-experimental designs, thus, undermining the interval validity of the results. On the other hand, studies base their predictions on individual factors and do not incorporate contextual factors. To overcome those limitations, a randomized field experiment was implemented in four insurance companies to incorporate contextual factors into the dynamics of deterrence. This study assessed the effect of a written threat (a deterrent letter reminding insured persons of the punishment for insurance fraud) on claim padding behaviours of insured persons filing claims for residential theft. A deterrent-letter project was implemented in four insurance companies, with claims randomly assigned to the experimental or the control group. Cases belonging to the control group were managed as usual, while individuals in the experimental group received the written threat. The experimental design made sure that the deterrent stimulus was exactly delivered to the insured persons when they had the opportunity to exaggerate the value of their claims. Findings demonstrate that claimants in the experimental group were less likely to pad their claims than were those in the control group. The letter was effective, regardless of the means of delivery. In conclusion, the administration of a written threat at the moment of criminal opportunity appears to be an effective strategy for preventing economic crimes.

Different ways of blowing the whistle: Explaining variations in decentralized enforcement in the UK and France

The factors explaining decentralized enforcement – the monitoring and reporting of illegalities in organizations by employees – remain poorly understood. This article contributes to filling this gap by presenting a study of employee reports to regulatory authorities of incidents that have taken place in British and French high hazard industries. The article distinguishes between two different registers of “quiet” and “loud” reporting, reflecting the varying echo of employee reports, as intended either by employees themselves or by other stakeholders. The study finds quiet reporting to be widespread in the UK, while loud reporting was salient in France only. The contrast can be explained by making reference to the relationships between unions, regulators, and managers, and the history and institutions of industrial relations that shaped them in particular ways in each country. The comparison suggests also that whistleblower protection legislation has played little role in encouraging reporting.     

Institutions and contracts: Franchising

This paper investigates a new dataset of franchise networks in nine countries in order to assess whether and to what extent do institutions influence the practice of franchising. Our regressions relate the structure of franchise networks (the rate of franchised units as opposed to corporate units) to individual parameters supposed to reflect the extent of moral hazards on the franchisor's and franchisee's sides and, more specifically, to various institutional parameters of the franchisor's country, namely, the legal tradition, the level of procedural formalism, the constraints imposed by labour regulation and the effectiveness of trademark protection. While agency theory parameters seem to perform rather badly in this international setting, institutions such as trademark protection and labour regulation have more explanatory power: greater trademark protection encourages franchising and the impact of labour regulation is mostly positive, depending on the type of labour regulation that is being considered. The effect of legal tradition and formalism seems negligible once these parameters are taken in. JEL Classification D23 · F23 · K12     

Exit, voice, and loyalty: Parent–child relations in the proto-industrial household economy (Zürich, 17th–18th centuries)

This article formulates a simple model of parent–child interest conflicts. Based on a simple model of a household economy with a production or wage income function, a labor maintenance cost function, and an externally given wage rate, it discusses potential conflicts over the appropriation of the product of family members' labor in terms of the trilogy of exit, voice, and loyalty. The model is then explored by using household lists that provide detailed information on the economic activity of individuals. Many young proto-industrial workers used the threat of exiting their parents' household to keep much of their earnings through the Rast custom (boarding allowance). The threat of leaving operated well among the middle and lower classes of proto-industrial society, but it is unclear whether it also worked for the daughters of farmers who apparently left home much earlier than their brothers. The discourse of contemporaries about the Rast custom are considered and interpreted as a counterstrategy against the exit threat in which the elders fostered a sense of loyalty among the young.     

A PCR marker Linked to a THCA synthase Polymorphism is a Reliable Tool to Discriminate Potentially THC‐Rich Plants of Cannabis sativa L.

Neither absolute THC content nor morphology allows the unequivocal discrimination of fiber cultivars and drug strains of Cannabis sativa L. unequivocally. However, the CBD/THC ratio remains constant throughout the plant's life cycle, is independent of environmental factors, and considered to be controlled by a single locus (B) with two codominant alleles (B_T and B_D). The homozygous B_T/B_T genotype underlies the THC‐predominant phenotype, B_D/B_D is CBD predominant, and an intermediate phenotype is induced by the heterozygous state (B_T/B_D). Using PCR‐based markers in two segregating populations, we proved that the THCA synthase gene represents the postulated B locus and that specific sequence polymorphisms are absolutely linked either to the THC‐predominant or the THC‐intermediate chemotype. The absolute linkage provides an excellent reliability of the marker signal in forensic casework. For validation, the species‐specific marker system was applied to a large number of casework samples and fiber hemp cultivars.     

Seeking forgiveness in an intergroup context: Angolan,Guinean, Mozambican,and East Timorese perspectives

Forgiveness is a key concept in many governance and responsive regulation issues. The notion of intergroup forgiveness was examined among people from four countries: Angola, Guinea‐Bissau, Mozambique, and East Timor. Nine hundred and eighty‐five adults who had suffered from the many conflicts in their areas, either personally or through injuries inflicted on members of their family, agreed to participate in a study that was specifically about seeking intergroup forgiveness. In all four countries, most participants of the study agreed with the ideas that (i) seeking intergroup forgiveness makes sense; (ii) the seeking process must be a popular, democratic, and public process, not a secret elite negotiation; (iii) the process must be initiated and conducted by people in charge politically, not by dissident factions; and (iv) the process is aimed at reconciliation, not at humiliating the group requesting forgiveness. Differences between the four countries were found regarding the extent to which (i) international organizations may be involved in the process; (ii) the demand must include the former perpetrators; and (iii) emotions and material compensation are ingredients in the process.     

Distribution of Chemical Phenotypes (Chemotypes) in European Agricultural Hemp (Cannabis sativa L.) Cultivars

In Europe, more than 50 approved cultivars of fiber hemp (Cannabis sativa L.) are in agricultural production. Their content of psychoactive tetrahydrocannabinol (THC) is legally restricted to <0.2% (%w/w in the dry, mature inflorescences). Cannabis strains with much higher THC contents are also grown, illegally or under license for drug production. Differentiation between these two groups relies on biochemical quantification of cannabinoid contents in mature floral material. For nonflowering material or tissue devoid of cannabinoids, the genetic prediction of the chemical phenotype (chemotype) provides a suitable method of distinction. Three discrete chemotypes, depending on the ratio of THC and the noneuphoric cannabidiol (CBD), can be distinguished: a “THC-predominant” type, a “CBD-predominant” type, and an intermediate chemotype. We present a systematic genetic prediction of chemotypes of 62 agricultural hemp cultivars grown in Europe. The survey reveals the presence of up to 35% B_T allele-carrying individuals (representing either a THC-predominant or an intermediate chemotype) in some cultivars—which is unexpected considering the legal THC limit of 0.2% THC. The fact that 100% of the seized drug-type seeds in this study revealed at least one B_T allele, reflects that plant breeding efforts have resulted in a fixation of the B_T allele in recreational Cannabis. To guarantee a sincere forensic application based on a genetic chemotype prediction, we recommend not to classify material of unknown origin if the samples size is below nine genetically independent individuals.