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Publication How Can Courts Encourage Constitutional Replacement?(SSRN, 2024-10-14) Verdugo, Sergio; https://ror.org/02jjdwm75Courts often do not play a significant role in constitutional replacement processes. Observers have identified exceptions and theorized about the courts' possible functions during and after those processes. However, little has been said about the courts' work taking place before replacement processes occur. This essay shows that courts can help establish the conditions for constitutional change by encouraging the demand for such change. They can do that by fostering the perception that the Constitution has become a tool to help one side of the political struggle win over politically salient constitutional conflicts, thus contributing to the polarization among competing political groups. Observers have reported that backlash against the courts is possible. I claim that a backlash against the Constitution itself is also possible. Encouraging the losers of the constitutional conflict to either attack the court or the constitution is possibly an unintended consequence of judges deciding cases in politically consequential ways. The implication is that strategic judges must balance the need to resolve cases in ways they perceive correct with the longterm acceptance of the Constitution. Still, a collective action problem makes this task difficult to achieve. The essay explores these ideas using different examples and expands on how the Chilean Constitutional Court contributed to building opposition against the Constitution before the Constitutional Convention was convened.Publication The Law As a Conversation Among Equals - A Skeptical View(SSRN, 2024-11-08) Verdugo, Sergio; https://ror.org/02jjdwm75In the context of the discussion about strengthening democratic regimes while facing the problems of constitutional and democratic erosion, Roberto Gargarella has offered a new regulatory ideal called "The Law As a Conversation Among Equals" to guide the discussion. He suggests placing our efforts of democratic recovery in new, more experimental forms of political participation, such as citizens' assemblies. This essay argues that Gargarella's valuable prescription for the problem may become self-defeating. If the main focus is not on helping the infrastructure of representative democratic regimes recover or heal, the focus on new experimental forms of political participation can even deepen the harm that the political systems are suffering. This is not to say that these new forms of political participation should always be avoided. As I will show, they should be used to complement and not replace representative institutions. I suggest a more modest, narrow, and cautious way to implement those participatory mechanisms. If the infrastructure of democracy is to be recovered, we should not avoid discussing issues such as the functioning of political parties, how fourth-branch institutions can impose limits and slow down processes of erosion while offering opportunities for democratic forces to regroup, and the way citizens access information and participate in the flawed marketplace of ideas.Publication Reducing Inequality in Consumer Transactions: The Significance of Aggravated Vulnerabilities(2023-02-26) Martinez, Maria Guadalupe; https://ror.org/02jjdwm75Whether consumer law should address inequality has been approached from various perspectives in Latin America and Europe. In Europe, EU consumer law has historically emphasized consumer empowerment and the Court of Justice of the European Union has predominantly elaborated its jurisprudence around the interpretive benchmark of the average consumer, that is, one who is presumed reasonably well informed, observant and circumspect. Conversely, Consumer Protection Statutes in Latin America started by emphasizing consumer protection and, by consequence, the courts have generally embraced the interpretive benchmark of the vulnerable consumer, that is, one who occupies a relatively although markedly vulnerable position in the market structure. In this article, I aim to demonstrate the consequences of this distinctive emphasis: the more consumer law moves towards empowerment and embraces the average consumer standard, the less sensitive it is to the vulnerabilities that impair consumer decision-making, which hinders this model’s capacity to address inequality in consumer transactions. Following the examination of the European experience, the article takes a closer look at consumer protection law in Argentina, where the courts embrace the task of using consumer law to reduce inequality. In particular, it focuses on the significant, recently introduced category of the hyper-vulnerable consumer; that is, consumers who find themselves in a situation of aggravated vulnerability due to age, gender, physical or mental state or social, economic, ethnic and/or cultural circumstances, any of which may cause special difficulty for the full exercise of their rights as consumers (Res. 139/2020). The choice of the Argentine case is motivated by the country’s paradigmatic shift from formal and abstract equality to a substantive and situated notion of the same that was introduced by the reformed Civil Code (2015), by the recently proposed Project of Reform of the Consumer Protection Statute (2018), which purports to advance novel regulation sensitive to inequality in consumer relations, and by the urgent need for responses to the structural inequality arising in the aftermath of the Covid-19 crisis from government, civil society, and social associations.Publication Blockchain: the birth of decentralized governance(Pompeu Fabra University, Economics and business working paper series, 2018-04-10) Garicano, Luis; Arruñada, Benito; https://ror.org/02jjdwm75By allowing networks to split, decentralized blockchain platforms protect members against hold up, but hinder coordination, given that adaptation decisions are ultimately decentralized. The current solutions to improve coordination, based on “premining” cryptocoins, taxing members and incentivizing developers, are insufficient. For blockchain to fulfill its promise and outcompete centralized firms, it needs to develop new forms of “soft” decentralized governance (anarchic, aristocratic, democratic, and autocratic) that allow networks to avoid bad equilibria.Publication Brexit and the Professional Services Sector – What Future for UK Professionals in Europe?(2020-02-24) Jacobsson, Johanna; https://ror.org/02jjdwm75Professional services form an important part of the UK economy. Their role is even bigger if their contribution to other key sectors, such as financial services, is taken into consideration. This working paper focuses on the provision of professional services between the EU and the UK under the pending Withdrawal Agreement as well as under the new economic relationship that the two parties are starting to formulate. The EU-UK Withdrawal Agreement provides a transition period until 31 December 2020 during which the UK continues to apply the entire body of EU law. The non-binding Political Declaration on the future EU-UK relationship recognises the need to agree on market access and non-discriminatory treatment for service providers and appropriate arrangements on professional qualifications. However, the level of the commitments depends on the UK’s willingness to adhere to the so-called level playing field, referring to the standards required by the EU in the areas of social and economic policy. As the UK is still doing its soul-searching in this regard, it is too early to say what the future framework for the services sector will look like. This uncertainty highlights the need for UK’s professional service firms to consider the need to restructure their EU operations during the transition period.Publication Services Liberalization by Federations and Federal-Type Structures: What Approach to Sub-Central Measures?(Society of International Economic Law (SIEL), Sixth Biennial Global Conference, 2018-08-06) Jacobsson, Johanna; https://ror.org/02jjdwm75The paper addresses an issue that has so far been left to little attention in literature dealing with international trade in services. It asks how services liberalization is conducted by countries that have a federal structure and where services are not regulated only on the level of the central government but also by various sub-national entities. Some of the most powerful nations, such as the United States and Canada, have divided competencies over services regulation. So does the European Union which due to its common trade policy can in its external trade relations be contrasted with federal states. The paper analyzes the different ways in which federations and other federal-type structures engage in international services liberalization by using the EU, US and Canada as examples. In order to shed more light on their treaty practice and to see to what extent sub-central levels of government appear in their services schedules, the paper reviews the GATS commitments as well as the services commitments that the EU, US and Canada have made in some of their recent PTAs. The paper shows that there are crucial differences in the way that these federal entities engage in international services liberalization. The paper also draws more far-reaching conclusions on the approach to take towards liberalization commitments by sub-central levels of government and assesses the effect that they have, or rather the effect that the lack of such commitments has, on the liberalization levels reached in modern trade agreements.Publication Not all General Obligation Bonds Are Created Equal(2021-07-04) Cestau, Dario; https://ror.org/02jjdwm75We document a comprehensive new classification of the legal structures backing municipal bonds and the effects that different legal features have on bond yields. It is a well-documented fact that investors rely on credit ratings to determine the credit risk of municipal bonds. However, rating agencies do not fully factor in the legal structures backing the bonds because measuring and testing the effects of said legal structures is inherently onerous. Since the price of risk is unusually high in this market, these flaws have important effects on yields.Publication Competition and Market Concentration in the Municipal Bond Market(SSRN, 2019-07-11) Cestau, Dario; https://ror.org/02jjdwm75Lack of competition among the underwriters of municipal bonds increases the borrowing costs of local municipalities. I find that the proportion of municipal bonds sold in competitive sales in the state has an economically significant effect on several measures of competitiveness. Competitive sales increase the number of active underwriters in the state and substantially decrease the concentration in the market for underwriting services for municipal bonds. I also find that state restrictions on the negotiated sale of municipal bonds can materially decrease market concentration. Market concentration has increased considerably over time, but only negotiated deals have contributed to greater concentration.Publication Specialization investments and market power in the underwriting market for municipal bonds(2020) Cestau, Dario; https://ror.org/02jjdwm75I find that municipal bond underwriters tend to specialize either in competitive sales or in negotiated sales. In a sample of 69,347 school district deals, on average, the market shares of competitive deals of the three main underwriters of negotiated deals in the state are 85% smaller than their shares of negotiated deals. Similarly, the top three competitive underwriters in the state have market shares of negotiated deals 94% smaller than their shares of competitive deals. I also find that competitive and negotiated sales require different types of specialization investments. The former requires investments in dealer networks, while the latter requires building relationships with investors and issuers. Local underwriters have a cost advantage in the specialization investments required for negotiated sales, and often dominate this market. However, this cost advantage disappears quickly crossing state borders. On the other hand, underwriters who invest in dealer networks can amortize their investment in multiple states. Compared to negotiated underwriters, I find that prime competitive underwriters in one state are more likely to become dominant competitive underwriters in a second state. Therefore, banks with pre-established networks have a cost advantage for competitive sales, and these markets are often dominated by national banks headquartered in New York. These cost dynamics also explain the higher industry concentration observed in negotiated sales markets.Publication Should State Governments Prohibit the Negotiated Sales of Municipal Bonds?(SSRN, 2020-08-06) Cestau, Dario; Green, Richard; Hollifield, Burton; Schürhoff, Norman; https://ror.org/02jjdwm75Should legislation ban the negotiated sales of municipal bonds? What are the costs of forcing public auctions? We compare the offering yields of local governments that are forced by state law to use public auctions to the offering yields of local governments that can choose between auctions and negotiated sales. Using a sample of 369,482 school bonds issued between 2004 and 2014, we find that a restriction on negotiated sales has a negative cost instead of positive. The prohibition benefits issuers on average. The offering yields of constrained issuers are 17 basis points lower than the offering yields of unconstrained issuers. The effect is equivalent to a rating upgrade from non-rated to AA-. Nevertheless, most issuers prefer to use negotiated sales even if they do not maximize bond proceeds.Publication College Achievement and Attainment Gaps: Evidence from West Point Cadets(National bureau of economic research, 2020-05) Cestau, Dario; Epple, Dennis; Romano, Richard; Sieg, Holger; Wojtaszek, Carl; https://ror.org/02jjdwm75Assessing the effectiveness of education by race and gender is as difficult as it is important. We investigate this question utilizing data for eleven cohorts at West Point, a distinguished military academy and highly ranked liberal arts college. Employing matching using entry scores on three comprehensive measures, we obtain exceptional matches of score distributions for black and matched white students. We find black students have lower graduating achievement scores than matched white students, but comparable rates of graduation, retention in the Army after graduation, and early promotion. Hispanic-white comparisons reveal no differences. Female-male comparisons reveal women have lower attainment and retention rates.Publication Living with the Algorithm - Toward a New Social Contract in the Age of AI(Elsevier, 2020-11) Panezi, Argyri; Dell’ Elce, Aurora; López-Navarro, Jimena; Smajevic, Aleksandra; García Mexía, Pablo; https://ror.org/02jjdwm75This report provides extensive information designed to guide civil society through the changes that algorithms are bringing in our daily lives. It explores the role of algorithms in the household, the workplace and marketplace. The guide presents in simple terms various useful applications of algorithms and discusses the value of citizens' data in algorithm-driven markets. Finally, it highlights legal challenges and risks with particular regard to equity, privacy, cyber-security and also competition law. Outlining the relevant legal issues and debates around algorithmic control, fairness and accountability, this report hopes to play an informative and hopefully empowering role to members of civil society.Publication El efecto "marea" del cártel de fabricantes de camiones: Notas sobre la sentencia del Tribunal de Distrito de Ámsterdam de 12 de mayo de 2021(Elsevier, 2021-07-12) Marcos, Francisco; https://ror.org/02jjdwm75Dado el carácter paneuropeo del cártel de los fabricantes de camiones, los primeros pronunciamientos de los tribunales de los distintos países sobre las reclamaciones de daños derivados del cártel presentan un interés y relevancia que trasciende el concreto proceso y la jurisdicción nacional a que se refieren. Esto ocurre con la sentencia del Tribunal de Distrito de Ámsterdam de 12 de mayo de 2021, que resuelve diversas cuestiones sobre el bloque de acciones consecutivas que se tramitan contra los fabricantes y que se refieren a más de 200.000 vehículos cartelizados. En primer lugar, se pronuncia sobre la acción consecutiva y el efecto vinculante de la Decisión de la Comisión europea de 19 de julio de 2016, detallando el alcance del cártel. En segundo lugar, examina la defensa de los fabricantes de que el cártel no produjo daños, descartándola, y acogiendo la tesis propugnada por los peritos de los demandantes de que la colusión de los fabricantes supuso sobreprecios cargados a los compradores de camiones a través del efecto anticipatorio de los intercambios de información sobre precios y sus subidas y por el efecto marea del cártel.Publication La suspensión de derechos políticos del socio hasta que las autoridades de competencia o de regulación sectorial autoricen las adquisiciones a través de OPA(2019-01-10) Marcos, Francisco; https://ror.org/02jjdwm75Análisis la regla de suspensión del derecho de voto de las acciones sobre el umbral que obliga a una sociedad cotizada a lanzar una Oferta Pública de Adquisición (OPA). Esta regla es el mecanismo de enlace y de coordinación de la legislación sobre el mercado de valores (y regulación de las OPAs) y el sistema de control de concentraciones (nacional y de la UE) así como los controles previstos en la regulación sectorial de determinadas industrias. Se examinan el ámbito de la suspensión (OPAs comprendidas en la norma, acciones afectadas y derechos), así como el eventual levantamiento de la suspensión por las autoridades de defensa de la competencia cuando sea indispensable para la protección del valor de la inversión.Publication Impugnación judicial por las autoridades de defensa de la competencia españolas de restricciones injustificadas de la libre competencia (in Spanish, Judicial Challenge by Spanish Antitrust Authorities of Unjustified Public Restraints to Competition)(2019-06-10) Marcos, Francisco; https://ror.org/02jjdwm75Este trabajo examina la reacción de las autoridades de competencia españolas frente a las barreras y restricciones públicas injustificadas a la libre competencia. Esta actuación complementa las actuaciones preventivas que realizan en ejercicio de la función de promoción y abogacía de la competencia que tienen encomendada. La actuación reactiva se verifica una vez la regulación o actuación administrativa se ha materializado y es de carácter impugnatorio. Este mecanismo de intervención ex post se ha visto reforzado en diciembre de 2013 con el reconocimiento a la Comisión Nacional de los Mercados y de la Competencia de potestades adicionales de impugnación de actuaciones y normas en la Ley de Garantía de la Unidad de Mercado.Publication High Speed Internet and the Widening Gender Gap in Adolescent Mental Health: Evidence from Hospital Records(IZA, 2022-05) Fernández Kranz, Daniel; Nollenberger, Natalia; Arenas Arroyo, Esther; https://ror.org/02jjdwm75This paper studies the impact of internet access on adolescent’s mental health. Exploiting the exogenous variation in the deployment of optic fiber in different areas of Spain between 2007 and 2019, we find that high-speed internet (HSI) increased mental health diagnoses among girls. Exploring the mechanisms behind this effect, we show that HSI increases addictive internet use while reducing time spent on sleep, homework, and socializing with family and friends, with girls driving all these effects. We also provide evidence that HSI contributes to a significant increase in suicide among adolescents, with the effects again being larger among girls.Publication Bargaining under Threats: The Effect of Joint Custody Laws on Intimate Partner Violence(IZA, 2020-10) Nollenberger, Natalia; Fernández Kranz, Daniel; Roff, Jennifer; https://ror.org/02jjdwm75We study the effect of a policy change that exogenously shifted bargaining power from mothers to fathers on intimate partner violence. We exploit a quasi-natural experiment based on a series of reforms in Spain that shifted the custody decision from being unilaterally determined by the mother to a joint decision, barring evidence of violence. We find that the policy increased the incidence of joint custody in Spain from less than 11% of all divorces to 40% in just five years. Comparing the evolution of intimate partner violence in treated and control regions and using couples without children as an additional comparison group, we find that the policy led to a large and significant decrease in intimate partner violence, with the largest effects among couples in which the mother was more likely to seek sole custody before the policy change. Consistent with this finding, the policy also led to a significant reduction in female partner homicides in treated regions. Finally, we also find evidence of more police reports by victims of intimate partner violence with a significantly higher proportion of these reports ending in dismissals or non-guilty decisions by the specialized courts. We interpret this finding as evidence of strategic behavior by mothers who want to retain sole custody of their children.Publication The Effect of Abortion Legalization on Fertility, Marriage and Long-Term Outcomes for Women(Barcelona School of Economics, 2021-10) Nollenberger, Natalia; González, Libertad; Jiménez Martín, Sergi; Vall Castello, Judit; https://ror.org/02jjdwm75We evaluate the short- and long-term effects for women of access to legal, subsidized abortion. We find evidence that the legalization of abortion in Spain in 1985 led to an immediate decrease in births, more pronounced for younger women in provinces with a higher supply of abortion services. Affected women were more likely to graduate from high school, less likely to marry young, less likely to divorce in the long-term, and reported higher life satisfaction as adults. We do not find negative effects on completed fertility, nor do we find significant effects on labor market outcomes in the long run.Publication Commitments and the Marital Match: The Effect of Alimony Reform on Assortative Matching(IZA, 2021-11) Fernández Kranz, Daniel; Roff, Jennifer; https://ror.org/02jjdwm75This paper examines the effects of reforms that reduced alimony on matching in the marriage market. Recent literature indicates that divorce law changes which reduce commitment or income-sharing upon separation will lead to an increase in assortative matching, as women forgo specialization which may not be compensated upon divorce. Using state-level data on alimony reform that reduced the entitlements of eligible spouses and American Community Survey data on marriage and the characteristics of newlyweds, we find that alimony reform increased measures of spousal covariance in education. Our results indicate that correlation coefficients on spousal degree attainment consistently rise with alimony reform, and regression-based measures of assortative matching increase similarly. Moreover, we find the largest effects among those groups who might be more sensitive to the reform. Regression-based measures of assortative matching increase by over 10% among couples in which at least one partner had previously been married and by 9% among those couples who marry in states with less generous property division and child support which are often treated as substitutes for alimony in divorce settlementsPublication Unlocking ESG Premium from Options(SSRN, 2023-03-24) Zhang, Weiming (Elaine); Cao, Jie ; Goyal, Amit; Zhan, Xintong (Eunice); https://ror.org/02jjdwm75We find that option expensiveness, measured by delta-hedged option returns, is higher for low-ESG stocks, indicating that investors pay a premium in the options market to hedge against ESG-related uncertainty. We estimate that this ESG premium is about 0.2% for 50 days. All three components of ESG contribute to option pricing. We find that investors pay the ESG premium to hedge against jump risks, but not volatility risks. The effect of ESG performance is more prominent during periods when attention to ESG is higher and for firms that are more subject to ESG-related risks.