Frank H. Stephen

Why plea-bargaining fails to achieve results in so many criminal justice systems: a new framework for assessment

The myth of American exceptionalism in the matter of plea-bargaining is certainly by now quite untrue. In addition to forming an important part of criminal procedure in the United Kingdom, plea-bargaining has been transplanted to several civil law countries such as France and Italy. Informal versions, based on non-trial settlement, have been observed in Germany, Belgium, the Netherlands, and around the world. The Law and Economics literature on plea-bargaining views it as an efficient instrument of criminal procedure because it reduces enforcement costs (for both parties) and allows the prosecutor to concentrate on more meritorious cases. Yet the success of transplants relies on the existence of appropriate incentives, and the detailed study of the Italian experience provides a good indication that the traditional inquisitorial system might not generate such incentives. Instead, this article offers a new theory emphasizing the role of the prosecutor and that of the defence counsel. We argue that the incentives of the prosecutor and those of the defence counsellor are determinants of the success or failure of plea-bargaining. We are sceptical that plea-bargaining can lead to or is consistent with the desirable outcome in many circumstances. In particular, a major implication of our analysis is that the comparative efficiency of plea-bargaining to a larger extent depends on the possibility of a legal system to address the multiple principle-agent problems in criminal litigation.

Advertising, Price and Quality in Self-regulating Professions: A Survey

This paper surveys the theoretical and empirical literature on the relationship between advertising, fees and quality in the self-regulating professions. Much of the literature is derived from the perspective of advertising as an information-enhancing device, helping to reduce the information asymmetry between professional and client. This is consistent with the majority of the empirical studies which suggest that advertising tends to have a downward effect on professional fees, with little if any adverse effect on quality. There are, however, important issues of method and measurement which may lessen the force of this conclusion

Advertising, consumer search costs and prices in a professional service market

Since stiglers (1961) seminal article on the economics of information it has been argued that producer advertising is a substitute for consumer search. This view of advertising has been implicit in recent liberalization of restrictions on advertising by professionals (e.g. lawyers, doctors, accountants, etc.). Using th e model of the price discriminating professional developed by Masson and Wu (1974) the impact of solicitor advertising on the level of conveyancing fees charged by a sample of Scottish Solicitors is estimated. The analysis distinguishes between different forms of advertising. The advertising-of-information theory cannot be rejected for some forms of advertising in one (property value) submarket but it can be in the other (higher property value) submarket. The evidence here rejects (i) the view that all advertising is a substitude for consumer search and (ii) the view that actions to reduce search costs (such as advertising) necessarily reduce price discrimination.

Corporate governance and mass privatisation: A theoretical investigation of transformations in legal and economic relationships

After the precipitated decline of the Soviet Empire and its satellite states, a system change seemed to be called for, and many countries embarked on social and political reforms focussing on property structures in the economy. This raised the issue of governance in the institutions that would constitute the structures in which production would have to take place. In particular, some Central European countries opted for mass privatisations of the means of production, on the face of it so as to have the people participate in the wealth of the nation. In fact, the wealth of the nation depends on the structures in which it is constituted. Dissipation of property rights will reduce the value of the nations productive capital, whereas an intelligent structure that creates good governance structures at the same time, increases the value of the producing capital. This relatively simple insight lies at the heart of our understanding of how to analyse different processes of mass privatisation. This essay develops a theoretical framework by which different governance structures can be analysed. The framework consists of a blend of the economic theory of property rights, new institutional economics and Austrian economic theory.

Business Strategies and the Small Professional Firm: Evidence from the Conveyancing Market

This paper examines the use of business strategies by firms of solicitors in England. Although still often seen as the epitome of the traditional profession, recent deregulation and liberalisation of the legal services market has forced solicitors to consider the use of more business-like approaches to the operations of their firms. Using the framework provided by John Kay, it is possible to identify ‘distinctive capabilities’ among some firms in the provision of conveyancing, despite the fact that this is a relatively routine service provided mainly by small professional firms. The use of reputation is crucial here. Analysis of the conduct of sample firms suggests that business strategies can be identified with respect to pricing and advertising, and that the advertising behaviour of law firms closely matches the predictions of relevant economic theory. The paper concludes that it is meaningful to speak of strategy among at least some small professional firms.

Testing for price discrimination in the market for conveyancing services

Price discrimination has long exercised the minds of economists. However, despite its undoubted widespread occurrence, relatively little empirical work has been carried out on the subject. Recent work by Domberger and Sherr’ explored price discrimination in the legal profession and concluded that deregulation in the market for conveyancing services has reduced the extent to which price discrimination is possible. In this paper we argue that the data used by Domberger and Sherr are unequal to the task of examining the presence, or otherwise, of price discrimination and present results from an alternative data set that is better equipped for so doing.

Expected damage and due care

The paper assesses the imputation to the judiciary of economic reasoning in determining the standard of care in torts. The author argues that since the courts consider only the actual damage that occurred, they cannot be using, even implicitly, the economic concept of expected damage. In general judges do not use “risk” or “probability” to weight the level of damage but use the concepts nonmultiplicatively in a manner similar to that implied in Shackles criteria for decision making in the absence of certainty. Shackles theory attempts to be descriptive, and it may well fit the rule employed by Judge Learned Hand.

The Hardman Report: A critique

Stephen F. H. (1974) The Hardman Report: A critique, Reg. Studies 9, 111–116. The Hardman Report analysed the consequences of dispersing Civil Service jobs from London. This paper is a critical review of the Report. Particular attention is paid to the analytical framework used. Examination of the methodology reveals serious flaws which when removed show the recommendations of Hardman to be invalid on his own grounds. The Report falls down because of its reluctance to use monetary values overtly, although these are shown to be implicit in the calculation. Furthermore the treatment of the “social desirability” of dispersing jobs is shown to create problems. It is suggested that C.B.A. provides a more appropriate framework for analysis of this problem.

Producers’ Cooperatives in Western Industrialised Economies

This chapter focuses on various forms of producers’ cooperatives found in four western industrialised economies: the United Kingdom, France, the United States and Spain. These are not the only economies in the west where producers’ cooperatives operate; they merely represent a sample for which material was readily accessible. A major omission is that of Italy, which has the largest number of contemporary cooperatives in western Europe (Oakeshott, 1978; Thornley, 1981). The only justification for this otherwise arbitrary selection is that, at the time of writing, a more detailed secondary literature was known to this writer.

Yugoslav Self-management

The preceding three chapters have reviewed the economic theory of the labour-managed firm. This theory is not an end in itself. It has been developed to further the understanding of how democratically-owned and -managed enterprises might be expected to behave. This chapter and the next turn to the actual experience of such organisations. As was mentioned in Chapter 2, the theory was originally developed with the evolving Yugoslav system of self-management in mind. Much of the material of Chapter 4 was also evolved to the same end. In view of this, because of its unique nature as the only wholly self-managed industrial system, and the peculiar historical and political position of that country, this chapter is given over wholly to a discussion of Yugoslavia. The following chapter examines groups of producers’ cooperatives in four western industriali3ed economies, and discusses the relationship between institutional characteristics and performance.