I consider a model in which an asset owner must decide how much to invest in his asset mindful of the fact that an encroacher’s valuation of the asset is increasing in the asset owner’s investment. Due to incomplete property rights, the encroacher and asset owner engage in a contest over the...

We show that the recent rise in Afghan opium production is caused by violent conflicts. Violence destroys roads and irrigation, crucial to alternative crops, and weakens local incentives to rebuild infrastructure and enforce law and order. Exploiting a unique data set, we show that Western...

This paper develops a model of the war against illegal drugs in both producer and consumer countries. The paper studies the trade-off faced by the government of the drug consumer country between prevention policies (aimed at reducing the demand for drugs) and enforcement policies (aimed at...

We assess the robustness of previous findings on the determinants of terrorism. Using extreme bound analysis, the three most comprehensive terrorism datasets, and focusing on the three most commonly analyzed aspects of terrorist activity, i.e., location, victim, and perpetrator, we re-assess the...

It is hypothesized that prosecution agencies that are dependent on the executive have less incentives to prosecute crimes committed by government members which, in turn, increases their incentives to commit such crimes. Here, this hypothesis is put to an empirical test focusing on a particular...

We provide evidence for a beneficial welfare impact of a crime policy that is targeted at strengthening victim precaution. Regulation made application of the electronic engine immobilizer, a simple and low-cost anti-theft device, mandatory for all new cars sold within the European Union as of...

For the first time we develop a time series of tax evasion (in % of official GDP) for 38 OECD countries over the period 1999 to 2010 based on MIMIC model estimations of the shadow economy. Considering indirect taxation and self-employment as the driving forces of tax evasion, we observe a...

This paper presents the various methods to estimate the size of the shadow economy, their strengths and weaknesses. The purpose of the paper is twofold. Firstly, it demonstrates that no ideal method to estimate the size and development of the shadow economy exists. Because of its flexibility,...

Democratic societies are challenged by various violent and organized groups, be they terrorists, gangs or organized hooligans. In exchange for offering an identity, leaders in such groups typically require members to be violent. We introduce a simple model to capture these stylized facts, and...

In many instances of potential violent or non-violent conflict the future strategic positions of adversaries are very different when there is open conflict than when there is settlement. In such environments we show that, as the future becomes more important, open conflict becomes more likely...