Göran Skogh

A Contractarian Theory of Property Rights and Crime

As was noted long ago, war-like distributional squabbles which divert resources from socially productive uses will persist in a world without government. In this paper, we show that all agents can gain ex ante from the institution of a social contract which establishes property rights and levies a tax in order to finance a criminal justice system where punishment is threatened for violations of property rights. These ex ante gains hold even for individuals who may be harshly punished ex post. The optimal social contract (i.e. the optimal level of enforcement of property rights) is also characterized.

Property crimes and the police: an empirical analysis of Swedish data

The results of a study of the impact of police work on property crimes are reported. The data base is a cross-section of 278 Swedish municipalities during the years 1975 and 1976. A three-equation simultaneous model is compared with a simpler two-equation model. The results indicate that the simpler system is preferable. In the estimates of both models, most parameters are significant with the expected signs. Police work seems to deter crime, as expected.

An Economic Analysis of a Swedish Environmental Liability Case

A High Court case illustrates Swedish legal reasoning. The case extends the use of strict liability, although the main liability rule is negligence. The aim of the paper is to show the usefulness of the economic analysis in a practical case. The case concerns liability for damages caused by a leaky, hot-water pipe. The defendant maintained that it should not be held liable because it had not acted negligently, and the district court and the court of appeals supported the defence. Nevertheless, the High Court decided on strict liability. The High Court used a line of argumentation that, partly and implicitly, may have been economically correct. However, the precedence was most limited and unclear. Given an explicit goal of economic efficiency, the precedence would, in this simple and straightforward case, be that strict liability should prevail where the cause is unilateral and the injurer is able to cover and/or insure the loss.

The Structure and Future of the Insurance Market

Publisher Summary This chapter discusses the structure and future of the insurance market. It also presents the institutional theory of financial intermediation. The early, and so far most far-reaching, directives toward an internal European insurance market concern re-insurance, co-insurance, and the insurance of large risks. However, these parts of the insurance business have been international for decades. The different firms and types of business in the financial service industry differ because of the risks and customers in which they specialize. The trade-credit insurance industry is also primarily a large-scale business. Life-insurers, on the other hand, specialize in the assessment of mortality risk and in the administration of large funds. The creation of an internal European market will be of minor importance for the re-insurance and large risk-markets that are already international. The impact will be larger in the consumer insurance markets where it is presumably to create highly standardized European insurance policies, marketed, and claims-adjusted in national markets.