How to lend like mad and make a profit: A micro‐credit paradigm versus the start‐up fund in South Africa

In current debates about micro‐credit, joint‐liability schemes are often viewed as the only viable way to non‐collateralised lending, and are thus seen as almost synonymous with micro‐credit. This article reports about an alternative, non‐participatory approach to micro‐credit. Prompted by the apparent inability of group credit schemes to reign in lending costs, the article sets out the institutional requirements for cheap, ‘mass‐produced’ credit. It argues that such credit can be viable if mechanisms are in place enforcing the self‐selection of potential borrowers and self‐motivation of existing borrowers. The analysis of a ‘mass‐minimalist’ micro‐credit institution from South Africa supports the argument.     

Dutch real estate search engine found to provide lawful deep linking to websites of realtors

In preliminary relief proceedings against the Dutch search enginezoekallehuizen.nl, the Dutch court turned down the claims ofthe Dutch association of real estate agents (NVM) that the provisionof deep links to its members' websites infringed the copyrightand database rights of those realtors, but found that the NVMinfringed competition law by asking its members to make it impossiblefor zoekallehuizen.nl to provide deep links to their websites.     

Analysis of current account reversals via regime switching models

The analysis of sharp and persistent reductions of current account deficits, which can be characterized as the transition from an unsustainable to a more sustainable level of current account balance, relies often on ad hoc criteria for identification of reversal episodes. Within this paper, an empirical framework in terms of a regime switching approach is presented allowing simultaneous identification of current account reversal episodes and their determinants. Additionally, this approach is extended towards analysis of the impact of a reversal on the path of economic growth. Empirical investigation of a panel containing developing countries suggests a different timing of reversals compared to timing delivered by ad hoc criteria. However, several determinants of reversals discussed in the literature remain valid. Our estimates of costs implied by the occurrence of a current account reversal amount to a severe reduction of economic growth, where output costs are found to vary largely across countries.     

Long-term effects of the Moving to Opportunity residential mobility experiment on crime and delinquency

Objectives

Using data from a randomized experiment, to examine whether moving youth out of areas of concentrated poverty, where a disproportionate amount of crime occurs, prevents involvement in crime.

Methods

We draw on new administrative data from the U.S. Department of Housing and Urban Development’s Moving to Opportunity (MTO) experiment. MTO families were randomized into an experimental group offered a housing voucher that could only be used to move to a low-poverty neighborhood, a Section 8 housing group offered a standard housing voucher, and a control group. This paper focuses on MTO youth ages 15–25 in 2001 (n = 4,643) and analyzes intention to treat effects on neighborhood characteristics and criminal behavior (number of violent- and property-crime arrests) through 10 years after randomization.

Results

We find the offer of a housing voucher generates large improvements in neighborhood conditions that attenuate over time and initially generates substantial reductions in violent-crime arrests and sizable increases in property-crime arrests for experimental group males. The crime effects attenuate over time along with differences in neighborhood conditions.

Conclusions

Our findings suggest that criminal behavior is more strongly related to current neighborhood conditions (situational neighborhood effects) than to past neighborhood conditions (developmental neighborhood effects). The MTO design makes it difficult to determine which specific neighborhood characteristics are most important for criminal behavior. Our administrative data analyses could be affected by differences across areas in the likelihood that a crime results in an arrest.     

Political Quid Pro Quo Agreements: An Experimental Study

We experimentally study the common wisdom that money buys political influence. In the game, one special interest (i.e., a corporate firm) has the opportunity to influence redistributive tax policies in her favor by transferring money to two competing candidates. The success of the investment depends on whether or not the candidates are willing and able to collude on low‐tax policies that do not harm their relative chances in the elections. In the experiment, successful political influence never materializes when the firm and candidates interact just once. By contrast, it yields substantially lower redistribution in about 40% of societies with finitely repeated encounters. However, investments are not always profitable, and profit sharing between the firm and candidates depends on prominent equity norms. Our experimental results shed new light on the complex process of buying political influence in everyday politics and help explain why only relatively few firms do actually attempt to influence policymaking.     

The Silence of the Lambdas: Deterring Incapacitation Research

This essay provides an economist’s perspective on criminological research into incapacitation effects on crime. Our central argument is that criminologists would do well to substantially scale back the enterprise of trying to estimate the various behavioral parameters central to a micro-level approach to measuring incapacitation effects, including the annual rate of offending outside of prison (λ) and the lengths of criminal careers. One problem with this line of research is practical: for example, mean estimates of self-reported criminal activity by incarcerated prisoners are quite sensitive to reports by the most criminally active offenders. But the larger concern is conceptual—the incapacitation effects from a given change in sentencing policy may be undermined by the possibility of replacement effects, and at the same time omit other benefits that may arise from deterrent effects on crime. A more promising approach is to identify plausibly exogenous changes in sentencing policy in order to estimate the net impact on crime from the combined effects of incapacitation, deterrence and replacement.

Voting on income tax exemptions

Most itemized tax exemptions lead to significant deductions for a minority of the population only. This raises the question why the majority does not vote for the abolition of these tax privileges in exchange for lower tax rates. In this paper we show that a reform proposal may be voted down, even when the majority uses the exemption at stake below the average. Turning to an empirical application, we simulate the voting outcome on the proposal to abolish the tax deductibility of commuting expenses in Germany. Our model predicts that this proposal would be rejected, even though a comfortable majority has below-average deductions.