Business Commons^™

Keep Charitable Oversight In The Irs, Philip Hackney

Articles

Critics are increasingly calling for Congress to remove charity regulation from the IRS. The critics are wrong. Congress should maintain charity regulation in the IRS. What is at stake is balancing power between the state, charity as civil society, and the economic order. In a well-balanced democracy, civil society maintains its independence from the state and the economic order. Removing charitable jurisdiction from the IRS would blind the IRS to dollars placed in the charitable sector increasing tax and political shelters and wealthy dominance of charities as civil society. A new agency without understanding of, or jurisdiction over, tax cannot …

Within-Development Density And Housing Prices In Singapore, Eric Fesselmeyer, Haoming Liu, Louisa Poco

Research Collection College of Integrative Studies

This paper measures how much more households pay for less density in their immediate surroundings. Using transaction and administrative data and exploiting the introduction of a regulation that restricted the number of housing units for certain land lots, we find that households discount density: a 10% increase in within-development density decreases the price per square meter by 5%. Further, the mean price per square meter of the average development increased by 1%–3% after the regulation was introduced, while the amount of built-up space remained constant. The increase in total revenue suggests developers may underestimate the externality caused by density.

Regulating New Tech: Problems, Pathways, And People, Cary Coglianese

All Faculty Scholarship

New technologies bring with them many promises, but also a series of new problems. Even though these problems are new, they are not unlike the types of problems that regulators have long addressed in other contexts. The lessons from regulation in the past can thus guide regulatory efforts today. Regulators must focus on understanding the problems they seek to address and the causal pathways that lead to these problems. Then they must undertake efforts to shape the behavior of those in industry so that private sector managers focus on their technologies’ problems and take actions to interrupt the causal pathways. …

Reconsidering The Evolutionary Erosion Account Of Corporate Fiduciary Law, William W. Bratton

All Faculty Scholarship

This Article reconsiders the dominant account of corporate law’s duty of loyalty, which asserts that the courts have steadily relaxed standards of fiduciary scrutiny applied to self-dealing by corporate managers across more than a century of history—to the great detriment of the shareholder interest. The account originated in Harold Marsh, Jr.’s foundational article, Are Directors Trustees? Conflicts of Interest and Corporate Morality, published in The Business Lawyer in 1966. Marsh’s showing of historical lassitude has been successfully challenged in a recent book by Professor David Kershaw. This Article takes Professor Kershaw’s critique a step further, asking whether the evolutionary …

Deploying Machine Learning For A Sustainable Future, Cary Coglianese

All Faculty Scholarship

To meet the environmental challenges of a warming planet and an increasingly complex, high tech economy, government must become smarter about how it makes policies and deploys its limited resources. It specifically needs to build a robust capacity to analyze large volumes of environmental and economic data by using machine-learning algorithms to improve regulatory oversight, monitoring, and decision-making. Three challenges can be expected to drive the need for algorithmic environmental governance: more problems, less funding, and growing public demands. This paper explains why algorithmic governance will prove pivotal in meeting these challenges, but it also presents four likely obstacles that …

Regulation And The Marginalist Revolution, Herbert J. Hovenkamp

All Faculty Scholarship

The marginalist revolution in economics became the foundation for the modern regulatory State with its “mixed” economy. Marginalism, whose development defines the boundary between classical political economy and neoclassical economics, completely overturned economists’ theory of value. It developed in the late nineteenth century in England, the Continent and the United States. For the classical political economists, value was a function of past averages. One good example is the wage-fund theory, which saw the optimal rate of wages as a function of the firm’s ability to save from previous profits. Another is the theory of corporate finance, which assessed a corporation’s …

Progressive Antitrust, Herbert J. Hovenkamp

All Faculty Scholarship

Several American political candidates and administrations have both run and served under the “progressive” banner for more than a century, right through the 2016 election season. For the most part these have pursued interventionist antitrust policies, reflecting a belief that markets are fragile and in need of repair, that certain interest groups require greater protection, or in some cases that antitrust policy is an extended arm of regulation. This paper argues that most of this progressive antitrust policy was misconceived, including that reflected in the 2016 antitrust plank of the Democratic Party. The progressive state is best served by a …

Motives Of Corporate Political Donations: Industry Regulation, Subjective Judgement And The Origins Of Pragmatic And Ideological Corporations, Nicholas M. Harrigan

Research Collection School of Social Sciences

What motivates corporate political action? Are corporations motivated by their own narrow economic self-interest; are they committed to pursuing larger class interests; or are corporations instruments for status groups to pursue their own agendas? Sociologists have been divided over this question for much of the last century. This paper introduces a novel case - that of Australia - and an extensive dataset of over 1,500 corporations and 7,500 directors. The paper attempts to understand the motives of corporate political action by examining patterns of corporate political donations. Using statistical modelling, supported by qualitative evidence, the paper argues that, in the …

Regulatory Entrepreneurship, Elizabeth Pollman, Jordan M. Barry

All Faculty Scholarship

This Article examines what we term “regulatory entrepreneurship” — pursuing a line of business in which changing the law is a significant part of the business plan. Regulatory entrepreneurship is not new, but it has become increasingly salient in recent years as companies from Airbnb to Tesla, and from DraftKings to Uber, have become agents of legal change. We document the tactics that companies have employed, including operating in legal gray areas, growing “too big to ban,” and mobilizing users for political support. Further, we theorize the business and law-related factors that foster regulatory entrepreneurship. Well-funded, scalable, and highly connected …

Not For Free: Exploring The Collateral Costs Of Diversity In Legal Education, Spearit

Articles

This essay examines some of the institutional costs of achieving a more diverse law student body. In recent decades, there has been growing support for diversity initiatives in education, and the legal academy is no exception. Yet for most law schools, diversity remains an elusive goal, some of which is the result of problems with anticipating the needs of diverse students and being able to deliver. These are some of the unseen or hidden costs associated with achieving greater diversity. Both law schools and the legal profession remain relatively stratified by race, which is an ongoing legacy of legal education’s …

The Challenge Of Regulatory Excellence, Cary Coglianese

All Faculty Scholarship

Regulation is a high-stakes enterprise marked by tremendous challenges and relentless public pressure. Regulators are expected to protect the public from harms associated with economic activity and technological change without unduly impeding economic growth or efficiency. Regulators today also face new demands, such as adapting to rapidly changing and complex financial instruments, the emergence of the sharing economy, and the potential hazards of synthetic biology and other innovations. Faced with these challenges, regulators need a lodestar for what constitutes high-quality regulation and guidance on how to improve their organizations’ performance. In the book Achieving Regulatory Excellence, leading regulatory experts …

Slides: Perspectives On Water Management In Arizona, Kathy Jacobs

Innovations in Managing Western Water: New Approaches for Balancing Environmental, Social and Economic Outcomes (Martz Summer Conference, June 11-12)

Presenter: Kathy Jacobs, Director, Center for Climate Adaptation Science and Solutions (CCASS), Department of Soil, Water and Environmental Science, University of Arizona

25 slides

The Mess At Morgan: Risk, Incentives And Shareholder Empowerment, Jill E. Fisch

All Faculty Scholarship

The financial crisis of 2008 focused increasing attention on corporate America and, in particular, the risk-taking behavior of large financial institutions. A growing appreciation of the “public” nature of the corporation resulted in a substantial number of high profile enforcement actions. In addition, demands for greater accountability led policymakers to attempt to harness the corporation’s internal decision-making structure, in the name of improved corporate governance, to further the interest of non-shareholder stakeholders. Dodd-Frank’s advisory vote on executive compensation is an example.

This essay argues that the effort to employ shareholders as agents of public values and, thereby, to inculcate corporate …

Actavis And Error Costs: A Reply To Critics, Aaron S. Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

The Supreme Court’s opinion in Federal Trade Commission v. Actavis, Inc. provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. In our previous article, Activating Actavis, we identified and operationalized the essential features of the Court’s analysis. Our analysis has been challenged by four economists, who argue that our approach might condemn procompetitive settlements.

As we explain in this reply, such settlements are feasible, however, only under special circumstances. Moreover, even where feasible, the parties would not actually choose such a settlement in equilibrium. These considerations, and others discussed in the reply, serve to …

Reinventing Copyright And Patent, Abraham Bell, Gideon Parchomovsky

All Faculty Scholarship

Intellectual property systems all over the world are modeled on the one-size-fits-all principle. However important or unimportant, inventions and original works of authorship receive the same scope of protection, for the same period, backed by the same variety of legal remedies. Metaphorically speaking, all intellectual property is equal under the law. This equality comes at a heavy price. The equality principle gives all creators access to the same remedies, even when those remedies create perverse incentives. Moreover, society overpays for innovation by inflicting on society more monopoly losses than are strictly necessary to incentivize production.

In this Article, we propose …

Toward A Closer Integration Of Law And Computer Science, Christopher S. Yoo

All Faculty Scholarship

Legal issues increasingly arise in increasingly complex technological contexts. Prominent recent examples include the Stop Online Piracy Act (SOPA) and the Protect Intellectual Property Act (PIPA), network neutrality, the increasing availability of location information, and the NSA’s surveillance program. Other emerging issues include data privacy, online video distribution, patent policy, and spectrum policy. In short, the rapid rate of technological change has increasingly shown that law and engineering can no longer remain compartmentalized into separate spheres. The logical response would be to embed the interaction between law and policy deeper into the fabric of both fields. An essential step would …

Activating Actavis, Aaron Edlin, C. Scott Hemphill, Herbert J. Hovenkamp, Carl Shapiro

All Faculty Scholarship

In Federal Trade Commission v. Actavis, Inc., the Supreme Court provided fundamental guidance about how courts should handle antitrust challenges to reverse payment patent settlements. The Court came down strongly in favor of an antitrust solution to the problem, concluding that “an antitrust action is likely to prove more feasible administratively than the Eleventh Circuit believed.” At the same time, Justice Breyer’s majority opinion acknowledged that the Court did not answer every relevant question. The opinion closed by “leav[ing] to the lower courts the structuring of the present rule-of-reason antitrust litigation.”

This article is an effort to help courts and …

Moulding The Nascent Corporate Social Responsibility Agenda In Singapore: Of Pragmatism, Soft Regulation, And The Economic Imperative, Eugene K. B. Tan

Research Collection Yong Pung How School Of Law

This paper seeks to examine the putative growth of corporate social responsibility (CSR) in Singapore. A key impetus for the nascent CSR movement in twenty-first century Singapore is the economic imperative. As a trade-dependent industrializing economy, the economic development drive coupled with the need for international expansion has made it necessary for Singapore businesses to be cognizant of the growing CSR movement in the western, industrialized world. The government supports the CSR endeavour with an instrumental bent, where CSR ideas and concepts are adapted, incorporated, and promoted in various sectors of the economy. This paper assesses the state’s active encouragement …

Agenda: Opportunities And Obstacles To Reducing The Environmental Footprint Of Natural Gas Development In The Uintah Basin, Utah State University. Bingham Entrepreneurship And Energy Research Center, University Of Colorado Boulder. Natural Resources Law Center. Intermountain Oil And Gas Bmp Project, Houston Advanced Research Center. Environmentally Friendly Drilling Systems Program

Opportunities and Obstacles to Reducing the Environmental Footprint of Natural Gas Development in Uintah Basin (October 14)

A public workshop to discuss “Opportunities and Constraints to Reducing the Environmental Footprint of Natural Gas Development” was held in Vernal, Utah on October 14, 2010 at the Vernal campus of Utah State University. The workshop was sponsored by Utah State University, The Bingham Energy Research Center; The University of Colorado Natural Resources Law Center; and the Houston Advanced Research Center, Environmentally Friendly Drilling Program.

The meeting included presentations and panel discussions on:

• Trends and environmental issues related to natural gas development
• Examples of environmental innovations being used in the Uintah Basin
• Examples of innovation & tools from outside the …

Advertising Competition In Retail Markets, Kyle Bagwell, Gea Myoung Lee

Research Collection School Of Economics

We consider non-price advertising by retail firms that are privately informed as to their respective production costs. We construct an advertising equilibrium, in which informed consumers use an advertising search rule whereby they buy from the highest-advertising firm. Consumers are rational in using the advertising search rule, since the lowest-cost firm advertises the most and also selects the lowest price. Even though the advertising equilibrium facilitates productive efficiency, we establish conditions under which firms enjoy higher expected profit when advertising is banned. Consumer welfare falls in this case, however. Under free entry, social surplus is higher when advertising is allowed. …

Advertising Competition In Retail Markets, Kyle Bagwell, Gea M. Lee

Research Collection School Of Economics

We consider non-price advertising by retail firms that are privately informed as to their respective production costs. We construct an advertising equilibrium, in which informed consumers use an advertising search rule whereby they buy from the highest-advertising firm. Consumers are rational in using the advertising search rule, since the lowest-cost firm advertises the most and also selects the lowest price. Even though the advertising equilibrium facilitates productive effi ciency, we establish conditions under which firms enjoy higher expected profit when advertising is banned. Consumer welfare falls in this case, however. Under free entry, social surplus is higher when advertising is …

What Blogging Might Teach About Cybernorms, Jacqueline D. Lipton

Articles

Since the dawn of the information age, scholars have debated the viability of regulating cyberspace. Early on, Professor Lawrence Lessig suggested that “code is law” online. Lessig and others also examined the respective regulatory functions of laws, code, market forces, and social norms. In recent years, with the rise of Web 2.0 interactive technologies, norms have taken center-stage as a regulatory modality online. The advantages of norms are that they can develop quickly by the communities that seek to enforce them, and they are not bound by geography. However, to date there has been scant literature dealing in any detail …

The Legitimising Power Of Regulation For Australian Banks: An Institutional Approach, H. Deo, Hemant J. Irvine, A. Abraham

Faculty of Commerce - Papers (Archive)

The history of the Australian banking system has been one of a striving for legitimacy, against a cycle of boom, bust and public antagonism. Despite a series of banking inquiries and ensuing regulatory reform, banks continue to announce unexpected results. Over the past 15 years, each of the four major Australian banks, while complying with the increasingly stringent requirements of regulatory bodies, reported at least one major financial blunder. An institutional perspective demonstrates that rules and regulations play a powerful legitimising role in assisting banks to maintain their public image in the face of such disasters.

Insurance Against Misinformation In The Securities Market, Tom Baker

All Faculty Scholarship

Prepared at the request of the Task Force to Modernize Securities Legislation in Canada, this study describes and evaluates evaluate a new capital markets insurance concept: securities misinformation insurance. This new insurance would compensate investors for losses caused by securities law violations. The most powerful objection to this new concept is that investors do not need a new insurance program for securities misinformation losses. Individual and institutional investors already can spread securities misinformation losses by holding a diversified portfolio. Nevertheless, a securities misinformation insurance program has the potential to provide systemic benefits: improved compliance with securities laws (resulting from cost …

Regulation And Freedom In Global Business Education, Stefano Harney, Cliff Oswick

Research Collection Lee Kong Chian School Of Business

Purpose: This paper seeks to confront the orthodoxy of global business education with some insights from postcolonial theory in order to develop a new critical pedagogy adequate for a global sociology of management and accounting. Design/methodology/approach: Reviewing the state of play in postcolonial theory and noting the new politicisation in that field, the paper asks what relevance this politicisation might have for an alternative to orthodox global business education. Findings: The paper finds that the texts available to postcolonial theory present a wealth beyond the regulation of colonial and neo‐colonial regimes and in contrast critical management studies do not have …

Management-Based Strategies For Improving Private Sector Environmental Performance, Cary Coglianese, Jennifer Nash

All Faculty Scholarship

Improvements in environmental quality depend in large measure on changes in private sector management. In recognition of this fact, government and industry have begun in recent years to focus directly on shaping the internal management practices of private firms. New management-based strategies can take many forms, but unlike conventional regulatory approaches they are linked by their distinctive focus on management practices, rather than on environmental technologies or emissions targets. This article offers the first sustained analysis of both public and private sector initiatives designed specifically to improve firms' environmental management. Synthesizing the results of a conference of leading scholars and …

Enron And The Dark Side Of Shareholder Value, William W. Bratton

All Faculty Scholarship

No abstract provided.

Considerations For An Effective Telecommunications-Use Policy, Michael E. Whitman, Anthony M. Townsend, Robert J. Aalberts

Faculty and Research Publications

Recent changes in federal telecommunications legislation have underscored the importance of an up-to-date and effective telecommunications-use policy in business organizations. With the proliferation of the Internet, intranets, and email as commonplace business tools, the potential for misuse and subsequent liability has become an increasing concern. Even though the recent Supreme Court decision struck down the obscenity provisions of the Communications Decency Act (CDA), it left intact legislation that effectively mandates development of a sound telecommunications-use policy. In addition to potential liability for systems misuse, organizations have also had to address issues of individual employee privacy within the new systems.

This …

The Threat Of Long-Arm Jurisdiction To Electronic Commerce, Robert J. Aalberts, Anthony M. Townsend, Michael E. Whitman

Faculty and Research Publications

Unfortunately for those whose businesses rely on the Internet, an increasing amount of legal conflict is also arising in reaction to this new business medium. As attorneys and the courts attempt to sort out the Internet’s legal status quo, both are considering such pressing substantive issues as electronic contracts, privacy, trademark, copyright, defamation, computer crimes, censorship, and taxation. It is imperative that information system professionals become aware of how evolving Internet law will affect the medium they are charged with administrating. An informed IS community is also much more capable of mounting legal and political challenges to law that might …

Drafting And Interpreting Sensitive Gas Purchase Contract Provisions, William D. Watson

Natural Gas Symposium: Contract Solutions for the Future of Regulatory Environment (March 24-25)

8 pages.