Digital Commons Network^™

The Origins Of Affirmative Fiscal Action, Mirit Eyal-Cohen

Mirit Eyal-Cohen

This article highlights an anomaly. It shows that two tax rules aimed to achieve a similar goal were introduced at the same time. Both meant to be temporary and bring economic stimuli, but received a dramatically different treatment. The less efficient or economically inferior survived. Its superior counterpart did not. The article reviews the reasons for this paradox. It shows that the reason is both political and an agency problem. The article not only enriches an important and ongoing debate that has received much attention in recent years, but also provides important lessons to policymakers.

Legal Mirrors Of Entrepreneurship, Mirit Eyal-Cohen

Mirit Eyal-Cohen

Small businesses are regarded the engine of the economy. But just what is a “small” business? Depending on where one looks in the law, the definitions vary and they differ from one section to another. Unfortunately, what these various size classifications fail to assess, are the policy considerations and the legislative intent for granting regulatory preferences to small concerns to begin with.

In the last century, the U.S. government has been cultivating one such policy of fiscal and economic growth. Consequently, Congress and private institutions have been acting to incentivize, support and reward entrepreneurship through the law in order to …

Why Is Small Business The Chief Business Of Congress?, Mirit Eyal-Cohen

Mirit Eyal-Cohen

Small business is a sacred cow in America. In 1958, Congress created the Small Business Investment Company ("SBIC"), a unique public-private program that provides long-term capital to small entrepreneurs. From its inception, however, the SBIC has been plagued by inefficiency and failure. Yet, Congress continues to pour millions of dollars into the SBIC program, with no end in sight. What explains this failed policy course?

This article argues that the SBIC program exemplifies the pitfalls of legal and political institutional path dependency and should be replaced by private institutional lending system. Pursuant to this account, past decisions can influence future …