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Apart from an extensive survey of the literature on the economics of corporate bankruptcy law, this thesis contains three own contributions: First, a model is presented where a firm's manager acquires some private information about whether a firm should be liquidated or stay in business. Providing the manager with suitable incentives to act in the investors' interest may be socially efficient, but not individually rational for the investors themselves. A second-best arrangement will be specified, and it will be shown how investors can be induced to implement it by means of an optimal bankruptcy code in the case where only standard financial contracts are available. The theory explains why bankruptcy law should, in some states of nature, let shareholders and senior creditors decide jointly, and provides a rationale for the existence of junior debt, which never enjoys any power of decision. Secondly, the topic of private debt workouts is taken up. It has often been argued that the coercive character of bond exchange offers leads to an inefficient liquidation policy, and that legal regulations are called for. In contrast to this claim, it will be argued here that such bondholder coercion will be anticipated when contracts are written out, so that the second-best arrangement will be obtained under any of the legal settings considered in the literature. Finally, there is a theoretical analysis and an empirical study of the incentives associated with Indian bankruptcy law, the key feature of which is that poorly performing firms are declared 'sick' and thereafter are run under governmental control. It is argued that governors have strong incentives to induce firms to choose a higher leverage by providing subsidized loans, because higher leverage increases the probability of financial distress, in which case the governor can implement his own conceptions of running the firm more easily. The model is applied to a data-set of some 2500 Indian manufacturing firms, and the basic model implications are confirmed.

This dissertation looks at the influence of crime on three important aspects of Mexico: The tourism industry, the threat of organized crime towards the Mexican youth and the spread of drug crime throughout the country. Even though crime has long been a present threat for the Mexican economy and society, this research project was motivated by the public security problem being faced by the Mexican Federal Government and the Mexican population since the end of 2006.

The present thesis extends the economic literature by introducing green horizontal innovation. Green horizontal innovation is characterized by new technologies that solve an existing pollution problem but give rise to a new one at the same time. A prominent example are CFCs that once replaced poisonous refrigants but are now phased-out themselves. Even groundbreaking technological advances are often merely shifting instead of solving environmental problems. Another concept introduced in this thesis is technological uncertainty. Ex-ante the properties of the next technology developed are not known. New technologies can be of two types. Either they come as perfectly clean 'backstop' technologies or as green horizontal innovations and are labeled 'boomerangs'. In an infinite horizon model the socially optimal pollution and R&D policies under green horizontal innovation and technological uncertainty are derived. The main results are that in the absence of a backstop all available polluting technologies should be engaged in production. Moreover, under technological uncertainty a finite sequence of innovations is optimal. This informs ongoing policy debates like the one on the future of electricity production where there are trade-offs between two polluting technologies – nuclear power and fossil fuels. Moreover, the present thesis evaluates implementation strategies under green horizontal innovation. In a two-period model the government grants patents and adjusts environmental policy in case innovation occurs. However, the government is assumed to be unable to pre-commit on future environmental policies. The key insight is that tradable permits can fail to implement static efficient allocations. Efficiency is limited by patent holder's monopoly pricing. The owner of the new technology might choose a license fee that restricts output to levels below the social optimum. Quantity regulation via pollution permits is therefore not effective. In contrast to previous results in the literature this also holds under vertical environmental innovation. The interaction between patents and environmental regulation goes therefore both ways. The choice of the environmental instrument affects incentives to innovation and patents create distortions in output markets. More sophisticated instruments are shown to be able to reduce the distortions caused by patents. A government's ability to commit is crucial for dynamic efficiency. A prominent concept to solve the time-inconsistency problem is to delegate specific policies to an independent agency, e.g. a central bank. McCallum (1995) criticized this approach by claiming that delegation does not solve the commitment problem but merely relocates it. McCallum's critique is formalized and partially contradicted. If there is uncertainty over future states of the world, delegation can improve credibility. Commitment is achieved by the costs incurred to pass and later change a law or the constitution. The higher these costs, the more credible are the associated policies. However, if there is uncertainty over the optimal future policy, these costs reduce a government's flexibility. Hence, there is a trade-off between credibility and flexibility. Delegation is able to relax this trade-off if the bureaucrat responds to shocks in a way that is at least somewhat in line with the government's preferences. Under uncertainty the government has more incentives to invest into credibility if she delegates. This insight explains the observed commitment effect of delegation and helps to improve the institutional design of environmental regulation and other policy areas.

This dissertation investigates modern slavery: Essay 1 presents a theoretical matching model of forced labor. It addresses how oppressors recruit their victims and how certain mechanisms affect the extent of exploitation. Essay 2 presents a theoretical model where slaveholders can buy protection from punishment by bribing corrupt inspectors. Bribery is modelled via Nash bargaining. Multiple equilibria and hysteresis are possible. Essay 3 studies empirically how political decision-making, institutional environment and exploitation are interlinked by creating a novel dataset.

This dissertation analyses the economic development of societies in which parents decide about not only education but also fertility. The parents' decisions are motivated by both financial and altruistic reasons. We focus on human capital formation and population growth as the determinants of economic development, and find that multiple steady-states can exist. In the first two chapters, the focus of the analysis is on the effects of fiscal interventions on both the household decisions and the dynamic of the system. In the third chapter, we examine the households' reaction to mortality shocks such as the HIV/AIDS epidemic, and their long-run economic effects when certain government interventions are financed from sources outside the system.

The present thesis extends the economic literature on the enforcement of environmental regulations by empirically analysing the effectiveness of environmental criminal law. It is a shortcoming of the discussion on the merits of criminal sanctions for environmental offenses that the empirical evidence on their effectiveness has so far not been systematically examined. This contrasts with the case of administrative sanctions for which a rich literature is available. Furthermore and despite the obvious parallels with the types of criminal behaviour studied using the so-called 'economic model of crime', the theoretical and empirical economic literature on crime has also largely by-passed the area of environmental crime. Little is therefore known regarding the extent to which the 'calculus of deterrence' postulated by Becker is operational in the context of environmental crimes. The thesis consists of four parts. The first part is dedicated to a comprehensive literature review on the empirical evidence of the effectiveness of both administrative sanctions in environmental law and criminal sanctions in general law. The second part then analyses the deterrent hypothesis by means of the German environmental criminal code in a dynamic panel data context. Special attention is given to the problem of potentially substantial dark figures in the context of environmental crime. The results derived add in significant ways to the existing literature. The first new insight is that while a substantial part of the German legal literature characterizes the German environmental criminal code as ineffective and therefore redundant, the results indicate otherwise. While rarely used, enforcement instruments restricted to criminal sanctioning such as trial in a public court and prison rates have a substantial statistical effect on reported environmental crime rates. With a view to validating the economic theory of crime, there is clear evidence that the "calculus of deterrence" is indeed operational in the domain of environmental crime. The second insight is the importance of detection and reporting effort for understanding the variation in reported environmental crime. The third part empirically investigates the most common type of environmental crime in Germany, namely illegal waste disposal. Using panel data at the county level of Baden-Württemberg, this part of the thesis has two primary objectives. First, it provides a verification of the results obtained in part two with respect to the deterrence effects. The second objective is to identify further key factors that influence the amount of environmental crime and that go beyond the basic deterrence framework. Examples include structural, economic and political economy variables. Results are threefold. First, there is clear evidence that the deterrence effects found in the state-wide analysis carry over to the counties of Baden-Württemberg. Especially the fact of being tried in a public court again deters people from committing environmental crimes. Second, the analysis supports previous findings on the importance of structural and economic factors that influence illegal behaviour in general. Third, this part reveals new and more subtle political economy factors that play an important role in this setting. The fourth part of the thesis reverses the focus by testing whether the success of different institutions involved in the enforcement process is subject to political control or public pressure. The extent to which exterior political factors or public preferences influence the behaviour of police, prosecutions or courts is only incompletely examined in the literature. However, this question is of fundamental importance as enforcement institutions jointly determine the effectiveness of every monitoring and enforcement regime. Findings show that economic factors including opportunity cost arguments matter at all stages of enforcement. Moreover, it turns out that political economy variables influence the behaviour of police, prosecution and courts. In contrast to initial hypothesis, the degree of influence remains fairly constant at all stages of enforcement. The present thesis therefore extends both the economic literature on the enforcement of environmental regulations and the general economics of crime literature by empirically analyzing the effectiveness of environmental criminal law. The derived results contribute in a significant way to a better understanding of the functioning of criminal enforcement in the context of environmental law. It is able to close the gap in the existing literature and to provide necessary information for policy-makers in the US, UK and within the European Commission discussing whether to further strengthen or weaken the use of criminal law in this context.

River floods can be very damaging. Since numerous human responses to floods are possible, the question arises: What is the organization of flood management that leads to the most efficient results? The dissertation first considers flooding and flood management in Germany. Based on that analysis, a theoretical, political-economy model of public flood defense is developed. The basic model is then extended to allow migration between upstream and downstream regions as well as between flood-prone areas and zones without risk. As different flood protection measures have quite different spatial characteristics, the distribution of responsibilities between the different actors is decisive for the overall performance of flood management. The distribution of public responsibilities among the different federal actors is crucial for two reasons. First, there are unidirectional upstream-downstream spillovers that raise the question whether decentralized or centralized provision of public goods is more efficient. Second, benefits from flood protection are concentrated to flood-prone areas near rivers. This concentration creates a natural heterogeneity of preferences for flood defense. These two aspects are also relevant for other issues in water management. Unidirectional spillovers and spatially heterogeneous preferences for public goods challenge the federal organization of flood defense. Following the lead of recent political-economy contributions to fiscal federalism, both aspects are investigated in a two region model with majority voting. Four different decision-making structures are compared: classical decentralization or centralization (based on jurisdictions containing voters both with and without preferences for the public good) and decentralized or centralized single issue authorities (whose jurisdictions, by definition, contain only high preference voters). Decentralized jurisdictions separate upstream and downstream voters, whereas a centralized jurisdiction comprises both groups. It turns out that centralized jurisdictions lead to a very low public good surplus and that either classical decentralization or decentralized single issue authorities achieve the best results under most conditions. The centralized provision of public goods is flawed because there is either an extreme over- or an extreme under-provision of the downstream public good. This can, however, be mitigated if there is a common standard for flood protection or if only the upstream provision of the public good is centralized. Whether or not these two solutions are beneficial depends on the magnitude of spillovers and also on the voting majorities in the two regions. Expanding the model to consider migration led to more complex results. First, citizens can migrate to flood-prone areas. Such migration flows can be induced by too large public flood defense, which is favored if citizens outside of flood-prone areas also finance the public good. Second, migration flow is also influenced by spillovers. The socially efficient population distribution is U-shaped with respect to spillovers. With symmetry assumptions, negative as well as positive unidirectional spillovers favour larger downstream populations. With myopic voters that neglect migration flow, this pattern is not achieved and the downstream population is large for positive spillovers and small for negative spillovers. Centralized jurisdictions are preferable to decentralized ones for smaller spillover effects if migration is possible. This argument is even stronger if voters take migration responses to the provision of public goods into account. The results shed light not only on the federal organization of flood management, but also on the institutional difficulties that arise from the current policy paradigm of the river basin approach to water management.

This study investigates the distributional effects of international organizations within their member countries. It addresses the issue empirically by examining the causal effect of International Monetary Fund (IMF) programs on income inequality. Introducing a new instrumental variable for IMF programs, I exploit time variation in the IMF's liquidity and cross-sectional variation in a country's probability of having a lending arrangement with the IMF. Using panel data for 155 countries over the 1973–2013 period, the results show that IMF programs substantially increase income inequality in democracies, while having no such effect in non-democracies. The size of this effect on democracies is smaller the more democratized the IMF's decision-making processes are. These results are consistent with the theory that powerful, 'democratically deficient' international organizations that interfere in domestic politics are capable of restricting the responsiveness of democratic governments to the preferences of their citizens.

MINE – Mapping the Interplay between Nature and Economy is a digital archive and visual map showing the intersection between nature and economy. By focusing on the interconnections between fundamental concepts e.g. of time, thermodynamics, evolution, responsibility and justice, a new concept of economic activity emerges within nature. This leads to new interpretations of current ecological, social and economic problems and, in addition, to an in-depth understanding of the modes of thought and policy needed to find sustainable solutions. On the most fundamental level, the dominant view of Mainstream Economics, which considers nature as part of the economy, Ecological Economics amends this view by the perspective that the economy in its physical side is seen as part of nature. Thus, Ecological Economics complements the strengths of Mainstream Economics on a practical level by interdisciplinary research highlighting, spots which do not receive the attention, by Mainstream Economics, they deserve. The research project that ultimately launched MINE began in the 1970s at the University of Heidelberg, conducted by an interdisciplinary group of scientists around Malte Faber, mainly economists, mathematicians, philosophers and physicists. It has contributed and can be broadly linked to the field of Ecological Economics. MINE digitally summarizes the experiences of this research and the accompanying policy-advising in Germany, the European Union, the US and China. It gives a web-based access to its publications and shapes new networks for scientists, students and practitioners. Following the Introduction (Section 1), this paper explains the MINE project (Section 2) and introduces our methodology (Section 3). In Section 4, we outline 15 concepts and heuristics for tackling the environmental problem. Finally, we provide an outlook for further work (Section 5).

This dissertation empirically investigates forces that shape the human capital base in the German labor market. Its three essays provide evidence on governmental interventions that promote or change the supply of human capital and impact health, education and migration, respectively.

The term 'economic abuse' was first introduced into discourse when it was identified as a tactic used by perpetrators within the Duluth Power and Control Wheel. Yet it is only recently that researchers have turned their attention to defining and understanding it. This article draws on a review of the global and UK specific academic research literature to assess the suitability of the definition of economic abuse put forward within the Westminster government's Domestic Abuse Bill. It recommends that a) the term 'any behaviour' within the definition is understood to include controlling tactics which sit under the constructs of economic restriction, exploitation and/or sabotage, b) the definition recognises perpetrators will also prevent a partner from using/maintaining goods or services and, c) attention is given to the suggestion that single incidents of economic abuse would not fall under this definition. While the focus of this article is on Westminster policy in the UK, the case for 'naming' and defining economic abuse in statute has wider resonance, not least because it provides a framework within which to report on prevalence, hold perpetrators accountable and for services (statutory and voluntary) to respond. Key messages This article critically assesses the definition of economic abuse within the Westminster government's Domestic Abuse Bill and argues that there is 'room for improvement'. The term 'any behaviour' within the definition of economic abuse should be understood to include controlling tactics which sit under the constructs of economic restriction, exploitation and/or sabotage. A clear understanding of the constructs of economic abuse is vital if the Westminster government is to report on prevalence (as required by the Istanbul Convention) and frontline practitioners are to understand and meet the complex needs of victim-survivors.

The following chapters portray how, in the context of globalization, some social, political, and economic mechanisms can differentially explain local, national, and international development in the world. While processes of globalization such as aid and trade agreements do convey gains expressed in improved figures of human and economic development, they do not operate in a political and social vacuum. The lessons on the politics of redistribution visited in all chapters ‒ but more heavily expressed in Chapter 3 ‒ speak loudly in favor of the latter. Globalization and the construction of welfare is a multi-layered process, dependent not only on international and national policy-making, but also on local factors that shape the numbers of winners and losers around the world. I hope that this thesis contributes to the latest, increasing array of work in charge of sustaining effective national- and local-level policy-making in the fields of aid, trade, and leaders' regional influence on specific and more general forms of development.

This paper begins with a discussion on James Buchanan's suggestion to replace the word "economics" with "symbiotics", viewing human behavior through the window of exchange rather than choice. Although our current textbooks - such as those by Daron Acemoglu, David Laibson, and John A. List (Microeconomics and Macroeconomics) - tend to over-emphasize choice rather than exchange, a look at documents published in Scopus during the past 70 years indicates that exchange is equally well represented throughout those years. More fundamentally, words such as choice or exchange are kind of "suitcase-like" words that conceal the complexity of very different things and concepts whose relationship we often do not sufficiently discuss or comprehend. As Richard Feynman, Marvin Minsky, and Aaron Sloman remind us, there is a difference between the name of a thing and what actually goes on. To make this point, the paper looks at the mechanism and machinery of decision-making to highlight that mechanisms can be programmed; in the process, reviving old AI ideas such as the General Problem Solver developed by Allen Newell, Clifford Shaw, and Herbert Simon, or Marvin Minsky's "Prediction Machine". The paper finishes by discussing not only the benefits of viewing an economic system through the lens of exchange, and therefore mutual aid, reciprocity, and redistribution, but also by emphasizing - as Kenneth Boulding has shown us - that social life is full of one-way transfers which are essential to a deeper understanding of our political economy and non-market machinery.