Category: Law

Orszag quotes the president bragging that "the Patent Office receives more than 80 percent of patent applications electronically," but notes that "these applications are then manually printed out, re-scanned, and entered into an outdated case management system. The average processing time for a patent is roughly three years."

That';s from Ezra Klein.

An Online business registration service has been officially
launched in Rwanda reducing time it takes to register a company from a
day to just one hour.

Here is more.  Hat tip goes to the essential (and malaria-plagued) Rachel Strohm.

There is a new paper by Todd Zywicki, which, due to my quick trip to Trento, I have not had time to read:

Fresh off of the most substantial national liquidity crisis of the last generation and the enactment of sweeping credit card regulation in the form of the Credit CARD Act, Congress continues to deliberate, with a continuing drumbeat of support from lobbyists, a set of new regulations for credit card companies. These proposals, offered in the name of consumer protection, seek to constrain the setting of “interchange fees”– transaction charges integral to payment card systems–through a range of proposed political interventions. This article identifies both the theoretical and actual failings of such regulation. Payment cards are a secure,  inexpensive, welfare-increasing payment mechanism largely unlike any other in history. Rather than increasing consumer welfare in any meaningful sense, interchange fee legislation represents an attempt by some merchants to shift costs away from their businesses and onto card issuing banks and cardholders. In particular, bank-issued credit cards offer a dramatic improvement in the efficiency and availability of consumer credit by shifting credit risk from merchants onto banks in exchange for the cost of the interchange fee–currently averaging less than 2% of purchase value. Merchants’ efforts to cabin these fees would harm not only consumers but also the merchants themselves as commerce would depend more heavily on less-efficient paperbased payment systems. The consequence of interchange fee legislation, as Australia’s experiment with such regulation demonstrates, would be reduced access to credit, higher interest rates for consumers, and the return of the much-loathed annual fee for credit cards. Interchange fee regulation threatens to constrain credit for consumers and small businesses as the American economy begins to convalesce from a serious “credit crunch,” and should be accordingly rejected.

Here is an argument I had not thought of, courtesy of Francisco Alcalá and Miguel González-Maestre:

We provide a new perspective on the impact of unauthorized copying and copy levies on artistic creation. Our analysis emphasizes three important aspects of artistic markets: the predominance of superstars, the dynamics of talent sorting, and the importance of promotion expenditures. In the short run, piracy reduces superstars’ earnings and market share, and increases the number of niche and young artists. From a dynamic perspective, piracy may help more young artists start their careers, thereby increasing the number of highly talented artists in the long run. The long run impact on artistic creation of levies on copy equipment may crucially depend on whether their yields primarily accrue to superstars or are allocated to help young artists.

I wonder, though, if piracy doesn't increase the returns to the most popular market superstars.  There are also expressive reasons for purchasing cultural commodities.  If you own copies of so many cultural outputs — possibly illegal copies — maybe you shell out for the real thing for the few "must-have" cultural products that everyone else is buying.  Imagine for instance a mother who buys her child the new Harry Potter on the first day because it is a "relic" of sorts and everyone else is getting it right away.  Or maybe a teenager wishes to "affiliate" with Eminem (in the old days) by actually buying and owning a copy of the best Eminem CD.

Hat tip goes to Eric John Barker.

By the way, here's a claim that Spain is responsible for twenty percent of the world's downloads.

Shades of the classic Radford article, except the time is now and the author is Stephen Lankenau:

Since the mid-1980s, cigarette-smoking policies have become increasingly restrictive in jails and prisons across the United States. Cigarette black markets of various form and scale often emerge in jails and prisons where tobacco is prohibited or banned. Case studies of 16 jails and prisons were undertaken to understand the effects of cigarette bans versus restrictions on inmate culture and prison economies. This study describes how bans can transform largely benign cigarette “gray markets,” where cigarettes are used as a currency, into more problematic black markets, where cigarettes are a highly priced commodity. Analysis points to several structural factors that affected the development of cigarette black markets in the visited facilities: the architectural design, inmate movement inside and outside, officer involvement in smuggling cigarettes to inmates, and officer vigilance in enforcing the smoking policy. Although these factors affect the influx of other types of contraband into correctional facilities, such as illegal drugs, this study argues that the demand and availability of cigarettes creates a unique kind of black market.

Hat tip goes to Vaughn Bell.

Canadian entrepreneur Steve Earle traveled to Greece with plans for what he hoped would be a flourishing business in a sunny, island-rich nation: a sea-plane airline.

But Mr. Earle's company, AirSea Lines, went bust five years later in 2008–hindered in large part, he says, by government bureaucracy. "They killed it by inertia," he says. "Greece is an unsustainable reality."

AirSea's odyssey illustrates one of the key problems preventing Greece from generating the economic growth it needs to pay off its heavy debts: Critics say a sprawling civil service has tried to secure its own survival through an opaque patchwork of fees, taxes and red tape. The European Commission estimates the administrative burden of Greece's bureaucracy–the value of work devoted to dealing with government-imposed administration–is equivalent to 7% of gross domestic product, twice the EU average.

There is much more here.  By the way, here is a new blog on the Greek financial crisis, in both Greek and English.

The sometimes-corrupt agencies rate securities and, in response, markets sometimes ignore these ratings but other times use these ratings to achieve nefarious ends, such as when mortgage-backed securities were overvalued and used to game the financial system.

Reform proposals aim to improve the quality of the agencies and limit their corruption.  Imagine honest agencies, overrating securities half the time and underrating them the other half of the time.  The underrated occasions still would be ignored while overrated securities still would be used to game the system.  The core problem would remain about half of the time.

An alternative proposal would be to remove the legal power of the ratings and require each agency to hire a convicted felon as CEO.  Board members would be restricted to men with ten years or more experience as a department store Santa Claus, or eleven-year-old female fans of Hannah Montana.  If the agency is wrong some of the time no matter what, and that error has bad consequences, should we not aim to lower the credibility of the agencies rather than restoring it?