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  5. Gangs and the Rule of Law
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Gangs and the Rule of Law

Paper Session

Sunday, Jan. 9, 2022 10:00 AM - 12:00 PM (EST)

Hosted By: American Economic Association
  • Chair: Jonathan Kurzfeld, Bates College

Ideas Have Consequences: The Impact of Law and Economics on American Justice

Elliott Ash
,
ETH Zurich
Daniel Chen
,
Institute for Advanced Study in Toulouse and University of Toulouse Capitole
Suresh Naidu
,
Columbia University

Abstract

This paper provides a quantitative analysis of the effects of the early law and-economics movement on the U.S. judiciary. We focus on the Manne Economics Institute for Federal Judges, an intensive economics course that trained almost half of federal judges between 1976 and 1999. Using the universe of published opinions in U.S. Circuit Courts and 1 million District Court criminal sentencing decisions, we estimate the difference-in-differences effect of Manne program attendance using judge fixed effects. Selection into attendance was limited - the program was popular across judges from all backgrounds, was regularly oversubscribed, and admitted judges on a first-come first-served basis - and we further adjust for machine-learning-selected covariates predicting the timing of attendance. We nd that after attending economics training, participating judges use more economics language in their opinions, issue more
conservative decisions in economics-related cases, rule against regulatory agencies more often, favor more lax enforcement in antitrust cases, and impose more/longer criminal sentences. The law-and-economics movement had policy consequences via its influence in U.S. courts, showing that theoretical legal ideas can directly influence economic policies by persuading federal judges.

Religious Leaders and Rule of Law

Avner Seror
,
Aix-Marseille University
Sultan Mehmood
,
New Economic School

Abstract

In this paper, we provide systematic evidence of how historical religious institutions affect
Rule of Law. In a difference-in-differences framework, we show that districts in Pakistan where
the historical presence of religious institutions is higher, Rule of Law is worse. This
deterioration is economically significant, persistent, and explained by the rise of religious
leaders elected to office. We explain our findings with a model where religious leaders leverage
their high legitimacy to run for office and influence Courts. Our estimate of the economy-wide
losses attributed to land expropriation by religious leaders through Courts is about 0.06 percent
of GDP every year.

Gang Rule: Understanding and Countering Criminal Governance

Santiago Tobon
,
EAFIT University
Christopher Blattman
,
University of Chicago
Gustavo Duncan
,
EAFIT University
Benjamin Lessing
,
University of Chicago

Abstract

Gangs govern millions worldwide. Why rule? And how do they respond to states? Many argue
that criminal rule provides protection when states do not, and that increasing state services could
crowd gangs out. We began by interviewing leaders from 30 criminal groups in Medellín. The
conventional view overlooks gangs’ indirect incentives to rule: governing keeps police out and
fosters civilian loyalty, protecting other business lines. We present a model of duopolistic
competition with returns to loyalty and show under what conditions exogenous changes to state
protection cause gangs to change governance levels. We run the first gang-level field
experiment, intensifying city governance in select neighborhoods for two years. We see no
decrease in gang rule. We also examine a quasi-experiment. New borders in Medellín created
discontinuities in access to government services for 30 years. Gangs responded to greater state
rule by governing more. We propose alternatives for countering criminal governance.

Competition in the Black Market: Estimating the Causal Effect of Gangs in Chicago

Jesse Bruhn
,
Brown University

Abstract

I study criminal street gangs using new data that describes the geospatial distribution of gang territory in Chicago and its evolution over a 15 year period. Using an event study design, I show that when a gang enters a city block there is also a sharp increase in the number of reported batteries (6%), narcotics violations (18.5%), weapons violations (9.8%), incidents of prostitution (51.9%), and criminal trespassing (19.6%). I also find a sharp reduction in the number of reported robberies (-8%). The findings cannot be explained by pre-existing trends in crime, changes in police surveillance, crime displacement, exposure to public housing demolitions, reporting effects, nor demographic trends. Taken together, the evidence suggests that gangs cause small increases in violence in highly localized areas as a result of conflict over illegal drug markets. I also find evidence that gangs cause reductions in median property values (-$8,436.9) and household income (- $1,866.8). Motivated by these findings, I explore the relationship between the industrial organization of the black market and the supply of criminal activity. I find that gangs that are more internally fractured or that operate in more competitive environments tend to generate more crime. This is inconsistent with simple, market based models of criminal behavior, which suggests an important role for behavioral factors and social interactions in the production of gang violence.

Link to full paper: http://www.jessebruhn.com/competition_in_the_black_market.pdf?attredirects=0

Practice beyond Education: Legal Leaders and Institutions

Craig Brown
,
Purdue University

Abstract

Government leaders can weaken the rule of law to favor politically connected groups. However, compared to other government leaders, a leader with professional legal experience, strengthens the rule of law and is associated with roughly 27,000 (or 20%) more convictions per year by the end of her tenure. The impact of experienced legal leaders on the rule of law is most evident for autocracies; is robust controlling for economic conditions; and occurs even relative to leaders with a legal education only. The findings suggest that experienced legal leaders facilitate equal treatment under the law while improving criminal justice system performance.
JEL Classifications
  • K1 - Basic Areas of Law