Band 6, Heft 2

Many governments, political economists and terrorist experts consider the use of military and police forces as the ultimate way to effectively deter terrorism. The most effective negative sanctions are considered to be military strikes, aggressive actions (including crackdowns, search operations, raids and shelling) against individuals known or suspected of being terrorists, or against organizations and persons who allegedly support terrorists. Do these negative sanctions effectively deter terrorism? To explore this question, I test displacement, diffusion of terrorism control benefits and vengeance hypotheses of terrorism prevention interventions in Pakistan. The displacement proposition holds when policy intervention raises the opportunity cost of terrorist activities in a given geographic space, thus, increases terrorist incidents in the neighborhoods, where opportunity cost is low. If the same policy decreases terrorism in the adjacent neighborhood, the diffusion proposition holds. Lastly, the vengeance hypothesis illustrates that intervention decreases the opportunity cost of terrorism which escalates more violence. This study explores district level spatial variation in terrorist incidents and terrorism prevention strategies from 2001 to 2012. It shows that terrorism prevention interventions significantly displace terrorism to the neighboring units. The results further illustrate that spatial differences in the legal framework across districts against terrorism related crimes lead to significant cross sectional variation in terrorist attacks.

Venture capital is certainly important to a country in that it finances entrepreneurship and innovation. In recent years, secondary markets for private shares have emerged as an important node in the VC cycle by both facilitating interim liquidity for non-listed firms and providing external investors with the access to good pre-IPO shares. Ready and able to play an active role on both the exit and entry sides, are VCs more engaged in reducing or increasing their ownership in these markets? Based on a sample consisting of a total of 102 firms that have been quoted on China’s New Third Board from 2006 to 2011 year end, this paper finds that VCs were much more likely to increase than decrease their ownership – there have been 128 times of increases in contrast to 45 times of decreases. In particular, VCs actively took the opportunities of subscribing new shares issued in capital increases to increase their ownership. Out of the total 85 VCs that invested in the 102 firms, 33 were already there as of first quotation, 39 VCs subscribed new shares in capital increases, 33 VCs bought shares from existing shareholders, while only 11 exited. For the purposes of enhancing the attractiveness of the New Third Board as an exit venue, this paper argues that the market should work on increasing its liquidity from both the supply and the demand sides. As the successor of the New Third Board, the National Equities Exchange and Quotations largely manages to realize this by considerably broadening the pool of potential eligible firms and investors, and also by making available various additional mechanisms such as market making and call auctions to boost share transfers. As such, it is generally reasonable to argue that for those SMEs that are not yet able to directly list on public stock exchanges but are already in need for interim liquidity, the NEEQ does serve as a useful platform to achieve the purpose, and thus fills a gap in China’s VC cycle.

For many years research on development has been focused on complex economic models. However, the underdevelopment phenomenon entails important cultural aspects which have been barely explored. One of those aspects is the relationship between legal culture and the rule of law, and its effects on development. The aim of this article is to find evidence of the relationship between the lack of the binomial rule of law/legal culture and underdevelopment. The article states that legal culture and rule of law, as factors for development, are a binomial, meaning that, in the research of development/underdevelopment phenomenon, those factors are to be studied together. Rule of law, in terms of its relationship with development, should not be conceived as a mere formal expression of generalized submission to laws, including on the part of the organs of the State itself, but it should also be observed from a broader perspective. Hence its necessary connection with the legal culture, as the existence of these laws and the actual fact that people, generally, be conscious of them and their conduct be guided by them. The existence of the binomial rule of law/legal culture constitutes, in this way, a framework for the flourishing of development in a given region or country.

The implementation of the bankruptcy law of China deviates much from the expectation of the legislature. This article draws on political economy analysis, especially the interest group approach, to provide an explanation of the causes of the deviation and predict what the future of the modification and reform of the law might be. This article also describes the China context in using public choice theory to explain legal issues.

Civil laws or commercial laws in many countries stipulate the liability of the public host whereby a public host is liable for the losses due to damage or lost of the property of the guest left to the host. In this paper, we consider the situation in which the value of the property is ex ante not known to the host. In this case, we show that the voluntary information disclosure rule is more efficient than the mandatory information disclosure rule. We also derive some implications on Article 153 of the Korean Commercial Law prescribing for this case.