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The large literature that aims to find evidence of climate migration delivers mixed findings. This meta-regression analysis i) summarizes direct links between adverse climatic events and migration, ii) maps patterns of climate migration, and iii) explains the variation in outcomes. Using a set of limited dependent variable models, we meta-analyze thus-far the most comprehensive sample of 3,625 estimates from 116 original studies and produce novel insights on climate migration. We find that extremely high temperatures and drying conditions increase migration. We do not find a significant effect of sudden-onset events. Climate migration is most likely to emerge due to contemporaneous events, to originate in rural areas and to take place in middle-income countries, internally, to cities. The likelihood to become trapped in affected areas is higher for women and in low-income countries, particularly in Africa. We uniquely quantify how pitfalls typical for the broader empirical climate impact literature affect climate migration findings. We also find evidence of different publication biases.
We develop a model of optimal carbon taxation and redistribution taking into account horizontal equity concerns by considering heterogeneous energy efficiencies. By deriving first- and second-best rules for policy instruments including carbon taxes, transfers and energy subsidies, we then investigate analytically how horizontal equity is considered in the social welfare maximizing tax structure. We calibrate the model to German household data and a 30 percent emission reduction goal. Our results show that energy-intensive households should receive more redistributive resources than energy-efficient households if and only if social inequality aversion is sufficiently high. We further find that redistribution of carbon tax revenue via household-specific transfers is the first-best policy. Equal per-capita transfers do not suffer from informational problems, but increase mitigation costs by around 15 percent compared to the first- best for unity inequality aversion. Adding renewable energy subsidies or non-linear energy subsidies, reduces mitigation costs further without relying on observability of households’ energy efficiency.
We investigate how the economic consequences of the pandemic, and of the government-mandated measures to contain its spread, affect the self-employed – particularly women – in Germany. For our analysis, we use representative, real-time survey data in which respondents were asked about their situation during the COVID-19 pandemic. Our findings indicate that among the self-employed, who generally face a higher likelihood of income losses due to COVID-19 than employees, women are 35% more likely to experience income losses than their male counterparts. Conversely, we do not find a comparable gender gap among employees. Our results further suggest that the gender gap among the self-employed is largely explained by the fact that women disproportionately work in industries that are more severely affected by the COVID-19 pandemic. Our analysis of potential mechanisms reveals that women are significantly more likely to be impacted by government-imposed restrictions, i.e. the regulation of opening hours. We conclude that future policy measures intending to mitigate the consequences of such shocks should account for this considerable variation in economic hardship.
In this paper, we study the effect of exogenous global crop price changes on migration from agricultural and non-agricultural households in Sub-Saharan Africa. We show that, similar to the effect of positive local weather shocks, the effect of a locally-relevant global crop price increase on household out-migration depends on the initial household wealth. Higher international producer prices relax the budget constraint of poor agricultural households and facilitate migration. The order of magnitude of a standardized price effect is approx. one third of the standardized effect of a local weather shock. Unlike positive weather shocks, which mostly facilitate internal rural-urban migration, positive income shocks through rising producer prices only increase migration to neighboring African countries, likely due to the simultaneous decrease in real income in nearby urban areas. Finally, we show that while higher producer prices induce conflict, conflict does not play a role for the household decision to send a member as a labor migrant.
We investigate how inviting students to set task-based goals affects usage of an online learning platform and course performance. We design and implement a randomized field experiment in a large mandatory economics course with blended learning elements. The low-cost treatment induces students to use the online learning system more often, more intensively, and to begin earlier with exam preparation. Treated students perform better in the course than the control group: they are 18.8% (0.20 SD) more likely to pass the exam and earn 6.7% (0.19 SD) more points on the exam. There is no evidence that treated students spend significantly more time, rather they tend to shift to more productive learning methods. The heterogeneity analysis suggests that higher treatment effects are associated with higher levels of behavioral bias but also with poor early course behavior.
The experimental literature on antitrust enforcement provides robust evidence that communication plays an important role for the formation and stability of cartels. We extend these studies through a design that distinguishes between innocuous communication and communication about a cartel, sanctioning only the latter. To this aim, we introduce a participant in the role of the competition authority, who is properly incentivized to judge communication content and price setting behavior of the firms. Using this novel design, we revisit the question whether a leniency rule successfully destabilizes cartels. In contrast to existing experimental studies, we find that a leniency rule does not affect cartelization. We discuss potential explanations for this contrasting result.
Populism has fatally weakened the world’s ability to respond to COVID-19, by undermining the capacity of the structures and mechanisms of international law to address the pandemic. The pandemic has exposed as a fallacy a key tenet of populism – to protect the ‘people’ of a nation from external forces, including international law. In fact international law, through the principle of self-determination, enshrines the ability of peoples to determine their own political organization. But this does not preclude agreement at the international level on matters of common interest to humanity as a whole that require community action. The prevention of infectious disease is just such a case, which states have long agreed could not remain solely the preserve of national polities, but requires a common international response. This paper, placing the current crisis in light of the development of international health law, critically examines the response of key populist governments to COVID-19 in order to address the larger issue of the implications of populism for the fate of international law.
We analyze workers’ risk preferences and training investments. Our conceptual framework differentiates between the investment risk and insurance mechanisms underpinning training decisions. Investment risk leads risk-averse workers to train less; they undertake more training if it insures them against future losses. We use the German Socio-Economic Panel (SOEP) to demonstrate that risk affinity is associated with more training, implying that, on average, investment risks dominate the insurance benefits of training. Crucially, this relationship is evident only for general training; there is no relationship between risk attitudes and specific training. Thus, as expected, risk preferences matter more when skills are transferable – and workers have a vested interest in training outcomes – than when they are not. Finally, we provide evidence that the insurance benefits of training are concentrated among workers with uncertain employment relationships or limited access to public insurance schemes.
Interest in evaluating the effects of continuous treatments has been on the rise recently. To facilitate the estimation of causal effects in this setting, the present paper introduces entropy balancing for continuous treatments (EBCT) by extending the original entropy balancing methodology of Hainmüller (2012). In order to estimate balancing weights, the proposed approach solves a globally convex constrained optimization problem, allowing for much more computationally efficient implementation compared to other available methods. EBCT weights reliably eradicate Pearson correlations between covariates and the continuous treatment variable. This is the case even when other methods based on the generalized propensity score tend to yield insufficient balance due to strong selection into different treatment intensities. Moreover, the optimization procedure is more successful in avoiding extreme weights attached to a single unit. Extensive Monte-Carlo simulations show that treatment effect estimates using EBCT display similar or lower bias and uniformly lower root mean squared error. These properties make EBCT an attractive method for the evaluation of continuous treatments. Software implementation is available for Stata and R.
Labor market policy tools such as training and sanctions are commonly used to help bring workers back to work. By analogy to medical treatments, the individual exposure to these tools may have side effects. We study effects on health using individual-level population registers on labor market events outcomes, drug prescriptions and sickness absence, comparing outcomes before and after exposure to training and sanctions. We find that training improves cardiovascular and mental health and lowers sickness absence. The results suggest that this is not due to improved employment prospects but rather to instantaneous features of participation such as, perhaps, the adoption of a more rigorous daily routine. Unemployment benefits sanctions cause a short-run deterioration of mental health, possibly due higher stress levels, but this tapers out quickly.
Current contestations of the liberal international order stand in notable contrast with the earlier rise of international law during the post-cold war period. As Krieger and Liese argue, this situation calls for assessment of the type of change that is currently observed, i.e. norm change (Wandel) or a more fundamental transformation of international law – a metamorphosis (Verwandlung)? To address this question, this paper details the bi-focal approach to norms in order to reflect and take account of the complex interrelation between fact-based and value-based conceptions of norms. The paper is organised in three sections. The first section presents three axioms underlying the conceptual framework to study norm(ative) change which are visualised by a triangular operation to analyse this change in relation with practices and norms. The second section recalls three key interests that have guided IR norms research after the return to norms in the late 1980s. They include, first, allocating change in and through practice, second, identifying behavioural change with reference to norm- following, and third, identifying norm(ative) change with reference to discursive practice. The third section presents the two analytical tools of the conceptual frame, namely, the norm-typology and the cycle-grid model. It also indicates how to apply these tools with reference to illustrative case scenarios. The conclusion recalls the key elements of the conceptual framework for research on norm(ative) change in international relations in light of the challenge of establishing sustainable normativity in the global order.
For the United States the ‘international law of global security’ is, in a unique sense, synonymous with the entire project of constructing global legal order. Uniquely preponderant power enjoyed since the end of the Second World War has allowed US preferences to manifest not merely in specific rules and regimes, but in purposive development of the entire structure of global legal order to favour American security interests. Perceptions of a recent decline in this order now find expression in advocacy for a ‘liberal’ or ‘rules-based’ international order, as the claimed foundation for global prosperity and security. This working paper seeks to map out the parameters of US contributions to the global security order by uncovering the strategic and political foundations of its engagement with the international law of global security. The paper begins by reflecting on competing US conceptions of the relationship between national security and global order as they evolved across the twentieth century. The focus then turns to three significant trends defining the contemporary field. First are US attitudes toward multilateral institutions and global security, and the ongoing contest between beliefs that they are mutually reinforcing versus beliefs that US security and global institutions sit in zero-sum opposition. Second is the impact of the generational ‘War on Terror’, which has yielded more permissive interpretation and development of laws governing the global use of violence. The final trend is that towards competitive geopolitical interests restructuring international law, which are evident across diverse areas ranging from global economics, to cybersecurity, to the fragmentation of global order into spheres of influence. Looking ahead, a confluence of rising geopolitical competitors with divergent legal conceptions, and conflicted domestic support for the legitimacy and desirability of US global leadership, emerge as leading forces already reshaping the global security order.
The WTO’s Crisis
(2020)
The perception of the WTO is currently one of an organisation in crisis. Yet, appraisal varies regarding its extent and seriousness: Is it merely a rough time or are we standing on the edge of destruction? The article will trace developments inside as well as outside the WTO in order to assess the magnitude of the crisis. It will be argued that while certain developments inside the organisation, when seen in accumulation would already warrant serious attention, only together with developments taking place outside of the WTO, the two strands of developments unfold their full potential for the crisis. The overall situation renders the WTO in a difficult position, as it is currently unable to adapt to these challenges, while keeping calm and carrying on might similarly further the crisis. While States might improve and further develop their trade relations in bi- and plurilateral agreements, it is only the WTO that reflects and stands for the multilateral post (cold) war order.
The guarantee of judicial independence is undoubtedly one of the most important institutional design features of international courts and tribunals. An independence deficit can adversely impact a court’s authority, create a crisis of legitimacy, and undermine the very effectiveness of an international court or tribunal. It can hardly be denied that for an international court to be considered legitimate, a basic degree of independence is a must. An independent judiciary is a precondition to the fair and just resolution of legal disputes. In the context of interstate dispute settlement where the jurisdiction of courts is based on the principle of consent, in the absence of a basic degree of judicial independence, states may not be willing to submit to the jurisdiction of international courts. Comparing and contrasting the International Court of Justice and the Appellate Body of the World Trade Organisation, I assess whether those international judicial mechanisms possess the basic degree of independence required for a court to be able to maintain its credibility so that it can continue to perform its core function of adjudicating interstate disputes. With both those interstate adjudicative bodies constituting the two leading international courts in terms of participation and the sheer number of cases decided, much may be learned from comparing them. I argue there is a case for bolstering the independence of the ICJ; and without immediate reforms to the Appellate Body’s institutional design, its recent demise may become permanent. I conclude that if a basic degree of judicial independence cannot be guaranteed, it is preferable to let a court vanish for a while than to maintain a significantly deficient one.
While some pronouncements of expert treaty bodies have been considered ‘key catalysts’ for the development of international human rights law, others are only selectively referred to in legal practice. This article argues that the varying normative impact is due to the informal character of pronouncements. In the absence of treaty provisions specifying their legal effect, practitioners tend to rely on different factors and arguments when either drawing on or rejecting certain pronouncements. Scholars in turn face difficulties when trying to identify explanatory patterns within this diverging practice as the informal character confronts both international lawyers and international relations scholars with their respective methodological ‘blind spots’. In light of these intradisciplinary challenges, this article explores the extent as to which an interdisciplinary approach helps to assess the reasons for the varying impact of pronouncements. After analysing the factors determining their legal significance on the basis of State practice and the academic debate, this article identifies the drafting process as a factor which promises to be particularly insightful when explored from an interdisciplinary perspective and sketches out a framework for future research.
Stochastic uncertainty can cause difficult coordination problems that may hinder mutually beneficial cooperation. We propose a mechanism of ex-post voluntary transfers designed to circumvent these coordination problems and ask whether it can do so. To test this, we implement a controlled laboratory experiment based on a repeatedly played Ultimatum Game with a stochastic endowment. Contrary to our hypothesis, we find that allowing voluntary transfers does not entail an efficiency increase. We suggest and analyze two main reasons for this finding: First, the stochastic uncertainty forces proposers to accept high strategic uncertainty if they intend to cooperate by claiming a low amount (which many proposers do not). Second, many responders behave only incompletely conditionally cooperative by transferring too little (which hinders cooperation in future periods).
Numerous studies investigate which sanctioning institutions prevent cartel formation but little is known as to how these sanctions work. We contribute to understanding the inner workings of cartels by studying experimentally the effect of sanctioning institutions on firms’ communication. Using machine learning to organize the chat communication into topics, we find that firms are significantly less likely to communicate explicitly about price fixing when sanctioning institutions are present. At the same time, average prices are lower when communication is less explicit. A mediation analysis suggests that sanctions are effective in hindering cartel formation not only because they introduce a risk of being fined but also by reducing the prevalence of explicit price communication.
Drinking is Different!
(2020)
Unhealthy behavior can be extremely costly from a micro- and macroeconomic perspective and exploring the determinants of such behavior is highly important from an economist’s point of view. We examine whether locus of control (LOC) can explain alcohol consumption as an important domain of health behavior. LOC measures how much an individual believes that she is in control of the consequences of her own actions for her life’s future outcomes. While earlier literature showed that an increasing internal LOC is associated with increased health-conscious behavior in domains such as smoking, exercise or diets, we find that drinking seems to be different. Using German panel data from the Socio-Economic Panel (SOEP) we find a significant positive effect of having an internal LOC on the probability of moderate and regular drinking. We suggest and discuss two likely mechanisms for this relationship and find interesting gender differences. While social investments play an important role for both men and women, risk perceptions are especially relevant for men.
Envy is an unpleasant emotion. If individuals anticipate that comparing their payoff with the (potentially higher) payoff of others will make them envious, they may want to actively avoid information about other people’s payoffs. Given the opportunity to reduce another person’s payoff, an individual’s envy may trigger behavior that is detrimental to welfare. In this case, if individuals anticipate that they will react in a welfare-reducing way, they may also avoid information about other people’s payoffs from the outset. We investigated these two hypotheses using three experiments. We found that 13% of our potentially envious subjects avoided information when they did not have the opportunity to reduce another participant’s payoff. Psychological scales do not explain this behavior. We also found that voluntarily uninformed subjects did neither deduct less of the payoff nor less frequently than subjects who could not avoid the information.
This paper evaluates the construction of the rights of human rights defenders within international law and its shortcomings in protecting women. Human rights defenders have historically been defined on the basis of their actions as defenders. However, as Marxist-feminist scholar Silvia Federici contends, women are inherently politicised and, moreover, face obstacles to political action which are invisible to and untouchable by the law. Labour rights set an example of handling such a disadvantaged political position by placing vital importance on workers’ right to association and collective action. The paper closes with the suggestion that transposing this construction of rights to women would better protect women as human rights defenders while emphasising their capacity for self-determination in their political actions.
Paid parental leave schemes have been shown to increase women’s employment rates but decrease their wages in case of extended leave durations. In view of these potential trade-offs, many countries are discussing the optimal design of parental leave policies. We analyze the impact of a major parental leave reform on mothers’ long-term earnings. The 2007 German parental leave reform replaced a means-tested benefit with a more generous earnings-related benefit that is granted for a shorter period of time. Additionally, a “daddy quota” of two months was introduced. To identify the causal effect of this policy on long-run earnings of mothers, we use a difference-in-difference approach that compares labor market outcomes of mothers who gave birth just before and right after the reform and nets out seasonal effects by including the year before. Using administrative social security data, we confirm previous findings and show that the average duration of employment interruptions increased for high-income mothers. Nevertheless, we find a positive long-run effect on earnings for mothers in this group. This effect cannot be explained by changes in working hours, observed characteristics, changes in employer stability or fertility patterns. Descriptive evidence suggests that the stronger involvement of fathers, incentivized by the “daddy months”, could have facilitated mothers’ re-entry into the labor market and thereby increased earnings. For mothers with low prior-to-birth earnings, however, we do not find any beneficial labor market effects of this parental leave reform.
Using quantile regression methods, this paper analyses the gender wage gap across the wage distribution and over time (1990–2014), while controlling for changing sample selection into full-time employment. Our findings show that the selection-corrected gender wage gap is much larger than the one observed in the data, which is mainly due to large positive selection of women into full-time employment. However, we show that selection-corrected wages of male and female workers at the lower half of the distribution have moderately converged over time. The reason for this development have been changes in the composition of the male full-time employment force over time, which in spite of the rather constant male full-time employment rate, have given place to a small but rising selection bias in male observed wages. In the upper half of the wage distribution, however, neither the observed nor the selection-corrected gender wage gap has narrowed over time.
We estimate the long-term effects of start-up subsidies (SUS) for the unemployed on subjective outcome indicators of well-being, as measured by the participants’ satisfaction in different domains. This extends previous analyses of the current German SUS program (“Gründungszuschuss”) that focused on objective outcomes – such as employment and income – and allows us to make a more complete judgment about the overall effects of SUS at the individual level. This is especially important because subsidizing the transition into self-employment may have unintended adverse effects on participants’ well-being due to its risky nature and lower social security protection, especially in the long run. Having access to linked administrative-survey data providing us with rich information on pre-treatment characteristics, we base our analysis on the conditional independence assumption and use propensity score matching to estimate causal effects within the potential outcomes framework. We find long-term positive effects on job satisfaction but negative effects on individuals’ satisfaction with their social security situation. Further findings suggest that the negative effect on satisfaction with social security may be driven by negative effects on unemployment and retirement insurance coverage. Our heterogeneity analysis reveals substantial variation in effects across gender, age groups and skill levels. The sensitivity analyses show that these findings are highly robust.
What Makes an Employer?
(2019)
As the policy debate on entrepreneurship increasingly centers on firm growth in terms of job creation, it is important to better understand which variables influence the first hiring decision and which ones influence the subsequent survival as an employer. Using the German Socio-economic Panel (SOEP), we analyze what role individual characteristics of entrepreneurs play in sustainable job creation. While human and social capital variables positively influence the hiring decision and the survival as an employer in the same direction, we show that none of the personality traits affect the two outcomes in the same way. Some traits are only relevant for survival as an employer but do not influence the hiring decision, other traits even unfold a revolving door effect, in the sense that employers tend to fail due to the same characteristics that positively influenced their hiring decision.
A growing demand for natural resources embedded in current changes of the international order will put pressure on states to secure the future availability of these resources. Some political discourses suggest that states might respond by challenging the foundations of international law. Whereas the UN Charter was inter alia aimed at eliminating uses of force for economic reasons, one may observe an on-going trend of securitization of matters of resource supply resulting into the revival of self-preservation doctrines. The chapter will show that those claims lack a normative foundation in the current framework of the prohibition of the use of force. Moreover, international law has sufficient instruments to cope with disputes over access to resources by other means than the use of force. The international community, therefore, must oppose claims that may contribute to normative uncertainties and strengthen already existing instruments of pacific settlement of disputes.
This paper assesses the rise and decline of international rule of law in the case of non-state armed actors. Both signs of rise and signs of decline of international rule of law show in the case of non- state armed actors. Signs of rise include the expansion of coverage of international humanitarian law (IHL) and international criminal law, as well as international legal argumentation and rhetoric made by non-state armed groups. Some non-state armed actors express that they are governed by IHL in public statements or bilateral agreements with international actors, partly acknowledging universality of international humanitarian norms, and sometimes act as such. Signs of decline in the international rule of law also show – although some of them can be seen as business-as-usual – privileging of military advantage, instrumental use of international law (as justification and local interpretations), as well as conflicting understanding of IHL between local and global norms. The multiplicity of non-state actors also portends the decline of international rule of law, with the proliferation of many non-organized groups without legitimacy-seeking motivations.
Modern rule of law and post-war constitutionalism are both anchored in rights-based limitations on state authority. Rule-of-law norms and principles, at both domestic and international levels, are designed to protect the freedom and dignity of the person. Given this “thick” conception of the rule of law, authoritarian practices that remove constraints on domestic political leaders and weaken mechanisms for holding them accountable necessarily erode both domestic and international rule of law. Drawing on political science research on authoritarian politics, this study identifies three core elements of authoritarian political strategies: subordination of the judiciary, suppression of independent news media and freedom of expression, and restrictions on the ability of civil society groups to organize and participate in public life. According to available data, each of these three practices has become increasingly common in recent years. This study offers a composite measure of the core authoritarian practices and uses it to identify the countries that have shown the most marked increases in authoritarianism. The spread and deepening of these authoritarian practices in diverse regimes around the world diminishes international rule of law. The conclusion argues that resurgent authoritarianism degrades international rule of law even if this is defined as the specifically post-Cold War international legal order.
How to identify customary international law is an important question of international law. The International Law Commission has in 2018 adopted a set of sixteen conclusions, together with commentaries, on this topic. The paper consists of three parts: First, the reasons are discussed why the Commission came to work on the topic “Identification of customary international law”. Then, some of its conclusions are highlighted. Finally, the outcome of the work of the Commission is placed in a general context, before concluding.
From an active labor market policy perspective, start-up subsidies for unemployed individuals are very effective in improving long-term labor market outcomes for participants. From a business perspective, however, the assessment of these public programs is less clear since they might attract individuals with low entrepreneurial abilities and produce businesses with low survival rates and little contribution to job creation, economic growth, and innovation. In this paper, we use a rich data set to compare participants of a German start-up subsidy program for unemployed individuals to a group of regular founders who started from nonunemployment and did not receive the subsidy. The data allows us to analyze their business performance up until 40 months after business formation. We find that formerly subsidized founders lag behind not only in survival and job creation, but especially also in innovation activities. The gaps in these business outcomes are relatively constant or even widening over time. Hence, we do not see any indication of catching up in the longer run. While the gap in survival can be entirely explained by initial differences in observable start-up characteristics, the gap in business development remains and seems to be the result of restricted access to capital as well as differential business strategies and dynamics. Considering these conflicting results for the assessment of the subsidy program from an ALMP and business perspective, policy makers need to carefully weigh the costs and benefits of such a strategy to find the right policy mix.
This article explores, whether domestic judges might be held accountable under international criminal law (ICL). To date, international criminal justice has almost entirely focused on prosecuting political or military leaders. The Justice Case tried before the Nuremberg Military Tribunal in 1946 marks the most prominent exception. Prior to it, the judiciary – otherwise considered the epitome of justice – had mutated into a murderous machinery under Nazi rule. Judicial decisions do have far-reaching implications possibly constituting or contributing to international crimes. This holds true in a wide range of cases, for instance on practices of warfare and torture, on the use of certain weapon technologies, or on policies relating to minorities or racial segregation. I argue that domestic judges are accountable when engaging in international crimes. The article delves into technical aspects of criminal law; as well as the notions of judicial independence and immunity. While guaranteeing the rule of law, these two notions challenge the core idea of ICL: its equal application vis-à-vis all perpetrators of international crimes irrespective of official capacity. In order to differentiate due judicial conduct and its abuse in violation of ICL, I suggest a threshold a judicial act needs to exceed for entailing accountability for an international crime.
International courts regularly cite each other, in part as a means of building legitimacy. Such international, cross-court use of precedent (or “judicial dialogue”) among the regional human rights courts and the Human Rights Committee has an additional purpose and effect: the construction of a rights-based global constitutionalism. Judicial dialogue among the human rights courts is purposeful in that the courts see themselves as embedded in, and contributing to, a global human rights legal system. Cross-citation among the human rights courts advances the construction of rights-based global constitutionalism in that it provides a basic degree of coordination among the regional courts. The jurisprudence of the U.N. Human Rights Committee (HRC), as an authoritative interpreter of core international human rights norms, plays the role of a central focal point for the decentralized coordination of jurisprudence. The network of regional courts and the HRC is building an emergent institutional structure for global rights-based constitutionalism.
This paper – which is based on the Thomas Franck Lecture held by the author at Humboldt University Berlin on 13 May 2019 – argues that the most likely development of international to be expected will be the coexistence of two “legal worlds”. On the one hand, an inter-State law brutally regulating political relations between human groups whitewashed by nationalism; on the other hand, a transnational or “a-national” law regulating economic relations between private as well as public interests. Further, the paper argues that there are two obvious victims – of very different nature – of this foreseeable evolution: the human being on the one hand, the certainty and effectiveness of the rule of law itself on the other hand.
Once the “popular plaything of Realpolitiker” the doctrine of rebus sic stantibus post the 1969 VCLT is often described as an objective rule by which, on grounds of equity and justice, a fundamental change of circumstances may be invoked as a ground for termination. Yet recent practice from States such as Ecuador, Russia, Denmark and the United Kingdom suggests that it is returning with a new livery. They point to an understanding based on vital States’ interests––a view popular among scholars such as Erich Kaufmann at the beginning of the last century.
This paper focuses on one particular issue which has arisen in the course of the ongoing debate on the reform of investor-State dispute settlement (ISDS), namely that of the appointment of arbitrators. Taking as its starting point that there now exists tentative consensus that the present system for the appointment of arbitrators either causes or exacerbates certain problematic aspects of the current ISDS system, the paper explores one option for reform, namely the introduction of an independent panel for the selection of investment arbitrators. In doing so, it is argued that a shift in the normative basis of the rules governing appointments is required in order to accommodate the principles of party autonomy and the international rule of law. Such reform, while not completely removing the initiative that parties presently enjoy, is the most efficient way to introduce rule of law considerations such as a measure of judicial independence into the current appointments system. This, it is argued, would in turn help to address some of the problematic features of the appointment of arbitrators in ISDS.
Entrepreneurial persistence is demonstrated by an entrepreneur’s continued positive maintenance of entrepreneurial motivation and constantly-renewed active engagement in a new business venture despite counter forces or enticing alternatives. It is thus a crucial factor for entrepreneurs when pursuing and exploiting their business opportunities and to realize potential economic gains and benefits. Using rich data on a representative sample of German business founders, we investigate the determinants of entrepreneurial persistence. Next to observed survival we also construct a hybrid persistence measure capturing also the motivational dimension of persistence. We analyze the influence of individual-level (human capital and personality) and business-related characteristics on both measures as well as their relative importance. We find that the two indicators emphasize different aspects of persistence. For the survival indicator, the predictive power is concentrated in business characteristics and human capital, while for hybrid persistence, the dominant factors are business characteristics and personality. Finally, we show that results are heterogeneous across subgroups. In particular, formerly-unemployed founders do not differ in survival chances, but they are more likely to lack a high psychological commitment to their business ventures.
Being ignorant of key aspects of a strategic interaction can represent an advantage rather than a handicap. We study one particular context in which ignorance can be beneficial: iterated strategic interactions in which voluntary cooperation may be sustained into the final round if players voluntarily forego knowledge about the time horizon. We experimentally examine this option to remain ignorant about the time horizon in a finitely repeated two-person prisoners’ dilemma game. We confirm that pairs without horizon knowledge avoid the drop in cooperation that otherwise occurs toward the end of the game. However, this effect is superposed by cooperation declining more rapidly in pairs without horizon knowledge during the middle phase of the game, especially if players do not know that the other player also wanted to remain ignorant of the time horizon.
How does the international Rule of Law apply to constrain the conduct of the Executive within a constitutional State that adopts a dualist approach to the reception of international law? This paper argues that, so far from being inconsistent with the concept of the Rule of Law, the Executive within a dualist constitution has a self-enforcing obligation to abide by the obligations of the State under international law. This is not dependent on Parliament’s incorporation of treaty obligations into domestic law. It is the correlative consequence of the allocation to the Executive of the power to conduct foreign relations. The paper develops this argument in response to recent debate in the United Kingdom on whether Ministers have an obligation to comply with international law–a reference that the Government removed from the Ministerial Code. It shows that such an obligation is consistent with both four centuries of the practice of the British State and with principle.
Expanding public or publicly subsidized childcare has been a top social policy priority in many industrialized countries. It is supposed to increase fertility, promote children’s development and enhance mothers’ labor market attachment. In this paper, we analyze the causal effect of one of the largest expansions of subsidized childcare for children up to three years among industrialized countries on the employment of mothers in Germany. Identification is based on spatial and temporal variation in the expansion of publicly subsidized childcare triggered by two comprehensive childcare policy reforms. The empirical analysis is based on the German Microcensus that is matched to county level data on childcare availability. Based on our preferred specification which includes time and county fixed effects we find that an increase in childcare slots by one percentage point increases mothers’ labor market participation rate by 0.2 percentage points. The overall increase in employment is explained by the rise in part-time employment with relatively long hours (20-35 hours per week). We do not find a change in full-time employment or lower part-time employment that is causally related to the childcare expansion. The effect is almost entirely driven by mothers with medium-level qualifications. Mothers with low education levels do not profit from this reform calling for a stronger policy focus on particularly disadvantaged groups in coming years.
We use panel data from Germany to analyze the effect of population density on urban air pollution (nitrogen oxides, particulate matter and ozone). To address unobserved heterogeneity and omitted variables, we present long difference/fixed effects estimates and instrumental variables estimates, using historical population and soil quality as instruments. Our preferred estimates imply that a one-standard deviation increase in population density increases air pollution by 3-12%.
”Thanks in Advance”
(2019)
This paper studies the effect of the commonly used phrase “thanks in advance” on compliance with a small request. In a controlled laboratory experiment we ask participants to give a detailed answer to an open question. The treatment variable is whether or not they see the phrase “thanks in advance.” Our participants react to the treatment by exerting less effort in answering the request even though they perceive the phrase as polite.
The German start-up subsidy (SUS) program for the unemployed has recently undergone a major make-over, altering its institutional setup, adding an additional layer of selection and leading to ambiguous predictions of the program’s effectiveness. Using propensity score matching (PSM) as our main empirical approach, we provide estimates of long-term effects of the post-reform subsidy on individual employment prospects and labor market earnings up to 40 months after entering the program. Our results suggest large and persistent long-term effects of the subsidy on employment probabilities and net earned income. These effects are larger than what was estimated for the pre-reform program. Extensive sensitivity analyses within the standard PSM framework reveal that the results are robust to different choices regarding the implementation of the weighting procedure and also with respect to deviations from the conditional independence assumption. As a further assessment of the results’ sensitivity, we go beyond the standard selection-on-observables approach and employ an instrumental variable setup using regional variation in the likelihood of receiving treatment. Here, we exploit the fact that the reform increased the discretionary power of local employment agencies in allocating active labor market policy funds, allowing us to obtain a measure of local preferences for SUS as the program of choice. The results based on this approach give rise to similar estimates. Thus, our results indicating that SUS are still an effective active labor market program after the reform do not appear to be driven by “hidden bias”.
This paper presents an experiment on the effect of retroactive price-reduction schemes on buyers’ repeated purchase decisions. Such schemes promise buyers a reduced price for all units that are bought in a certain time frame if the total quantity that is purchased passes a given threshold. This study finds a loyalty-enhancing effect of retroactive price-reduction schemes only if the buyers ex-ante expected that entering into the scheme would maximize their monetary gain, but later learn that they should leave the scheme. Furthermore, the effect crucially hinges on the framing of the price reduction.
A rich literature links knowledge inputs with innovative outputs. However, most of what is known is restricted to manufacturing. This paper analyzes whether the three aspects involving innovative activity - R&D; innovative output; and productivity - hold for knowledge intensive services. Combining the models of Crepon et al. (1998) and of Ackerberg et al. (2015), allows for causal interpretation of the relationship between innovation output and labor productivity. We find that knowledge intensive services benefit from innovation activities in the sense that these activities causally increase their labor productivity. Moreover, the firm size advantage found for manufacturing in previous studies nearly disappears for knowledge intensive services.
The paper extends a static discrete-choice labor supply model by adding participation and hours constraints. We identify restrictions by survey information on the eligibility and search activities of individuals as well as actual and desired hours. This provides for a more robust identification of preferences and constraints. Both, preferences and restrictions are allowed to vary by and are related through observed and unobserved characteristics. We distinguish various restrictions mechanisms: labor demand rationing, working hours norms varying across occupations, and insufficient public childcare on the supply side of the market. The effect of these mechanisms is simulated by relaxing different constraints at a time. We apply the empirical frame- work to evaluate an in-work benefit for low-paid parents in the German institutional context. The benefit is supposed to increase work incentives for secondary earners. Based on the structural model we are able to disentangle behavioral reactions into the pure incentive effect and the limiting impact of constraints at the intensive and extensive margin. We find that the in-work benefit for parents substantially increases working hours of mothers of young children, especially when they have a low education. Simulating the effects of restrictions shows their substantial impact on employment of mothers with young children.
Getting a Yes
(2019)
This paper studies how the request for a favor has to be devised in order to maximize its chance of success. We present results from a mini-dictator game, in which the recipient can send a free-form text message to the dictator before the latter decides. We find that putting effort into the message, writing in a humorous way and mentioning reasons why the money is needed pays off. Additionally, we find differences in the behavior of male and female dictators. Only men react positively to efficiency arguments, while only women react to messages that emphasize the dictator’s power and responsibility.
In 2015, Germany introduced a statutory hourly minimum wage that was not only universally binding but also set at a relatively high level. We discuss the short-run effects of this new minimum wage on a wide set of socio-economic outcomes, such as employment and working hours, earnings and wage inequality, dependent and self-employment, as well as reservation wages and satisfaction. We also discuss difficulties in the implementation of the minimum wage and the measurement of its effects related to non-compliance and suitability of data sources. Two years after the minimum wage introduction, the following conclusions can be drawn: while hourly wages increased for low-wage earners, some small negative employment effects are also identifiable. The effects on aspired goals, such as poverty and inequality reduction, have not materialized in the short run. Instead, a tendency to reduce working hours is found, which alleviates the desired positive impact on monthly income. Additionally, the level of non-compliance was substantial in the short run, thus drawing attention to problems when implementing such a wide-reaching policy.
The worldwide populist wave has contributed to a perception that international law is currently in a state of crisis. This article examines in how far populist governments have challenged prevailing interpretations of international law. The article links structural features of populism with an analysis of populist governmental strategies and argumentative practices. It demonstrates that, in their rhetoric, populist governments promote an understanding of international law as a mere law of coordination. This is, however, not entirely reflected in their legal practices where an instrumental, cherry-picking approach prevails. The article concludes that policies of populist governments affect the current state of international law on two different levels: In the political sphere their practices alter the general environment in which legal rules are interpreted. In the legal sphere populist governments push for changes in the interpretation of established international legal rules. The article substantiates these propositions by focusing on the principle of nonintervention and foreign funding for NGOs.
International adjudication is currently under assault, encouraging a number of States to withdraw, or to consider withdrawing, from treaties providing for international dispute settlement. This Working Paper argues that the act of treaty withdrawal is not merely as the unilateral executive exercise of the individual sovereign prerogative of a State. International law places checks upon the exercise of withdrawal, recognising that it is an act that of its nature affects the interests of other States parties, which have a collective interest in constraining withdrawal. National courts have a complementary function in restraining unilateral withdrawal in order to support the domestic constitution. The arguments advanced against international adjudication in the name of popular democracy at the national level can serve as a cloak for the exercise of executive power unrestrained by law. The submission by States of their disputes to peaceful settlement through international adjudication is central, not incidental, to the successful operation of the international legal system.
The paper aims to lay out a framework for evaluating value shifts in the international legal order for the purposes of a forthcoming book. In view of current contestations it asks whether we are observing yet another period of norm change (Wandel) or even a more fundamental transformation of international law – a metamorphosis (Verwandlung). For this purpose it suggests to look into the mechanisms of how norms change from the perspective of legal and political science and also to approximate a reference point where change turns into metamorphosis. It submits that such a point may be reached where specific legally protected values are indeed changing (change of legal values) or where the very idea of protecting certain values through law is renounced (delegalizing of values). The paper discusses the benefits of such an interdisciplinary exchange and tries to identify differences and commonalities among both disciplinary perspectives.
Unfolding the history of one of the oldest human val-ues, the freedom of expression, while defining its limits, is a complicated task. Does freedom stop where hate starts? This very old dilemma is -now more than ever before- revealing new dimensions. Politicians and new laws aim at regulating free expression, while disagree-ments over such regulation gradually become a source of endless conflict in newly formed multicultural, inter-connected, and digitized societies. The example of the Network Enforcement Act is used to understand the idea of restrictive legal practices in Germany, but also to enlighten the fact that law is a human construction which was created in order to regulate communication among individuals. Alternative practices, to straight legal ones, are summarized to show other dimensions of regulating hate speech without involving top-down approaches. The article proposes the approach of re-storative justice as a combination of legal and medita-tive practices in cases of hate speech. One advantage of the restorative justice approach elaborated in this arti-cle is the potential to remedy the inner hate and the pain, both of the victim and perpetrator. Finally, reveal-ing parts of history and new aspects of the ‘hate speech-puzzle’, leads to a questioning of contemporary social structures that possibly generate hate itself.