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Business Organizations Law

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2010

Faculty Scholarship Series

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Full-Text Articles in Law

Regulatory Dualism As A Development Strategy: Corporate Reform In Brazil, The U.S., And The Eu, Henry Hansmann, Ronald J. Gilson, Mariana Pargendler Mar 2010

Regulatory Dualism As A Development Strategy: Corporate Reform In Brazil, The U.S., And The Eu, Henry Hansmann, Ronald J. Gilson, Mariana Pargendler

Faculty Scholarship Series

Countries pursuing economic development confront a fundamental obstacle. Reforms that increase the size of the overall pie are blocked by powerful interests that are threatened by the growth-inducing changes. This problem is conspicuous in efforts to create effective capital markets to support economic growth. Controlling owners and managers of established firms successfully oppose corporate governance reforms that would improve investor protection and promote capital market development. In this article, we examine the promise of regulatory dualism as a strategy to diffuse the tension between future growth and the current distribution of wealth and power. Regulatory dualism seeks to mitigate political ...