Law Commons^™

Structuring And Restructuring Sovereign Debt: The Role Of Seniority, Patrick Bolton, Olivier Jeanne

Center for Contract and Economic Organization

In an environment characterized by weak contractual enforcement, sovereign lenders can enhance the likelihood of repayment by making their claims more difficult to restructure ex post. We show, however, that competition for repayment between lenders may result in a sovereign debt that is excessively difficult to restructure in equilibrium. This inefficiency may be alleviated by a suitably designed bankruptcy regime that facilitates debt restructuring.

Odious Debts Or Odious Regimes?, Patrick Bolton, David Skeel

Center for Contract and Economic Organization

Odious regimes have always been with us. That there is no silver-bullet solution that will prevent odious regimes from arising, or stymie them once they do, is evident from the plethora of responses employed by the international community once a regime’s odiousness becomes clear. Trade sanctions may be used to try to choke off a malignant regime’s access to weapons or other goods. In egregious cases, such as Milosevic’s Serbian regime, the international community may take military action. Still another strategy, more talked about than implemented, is the one considered in this article: the use of the odious debt (or, …

The Dilemma Of Odious Debts, Lee C. Buchheit, G. Mitu Gulati, Robert B. Thompson

Center for Contract and Economic Organization

When a corrupt governmental regime borrows money in the name of the state, and then steals or squanders the proceeds, must the future citizens of that country repay the loan? The law says yes, but the moral instinct of most people says no.

The odious debt controversy is, at base, a struggle to find a workable legal doctrine that will avoid a morally repugnant result (visiting the sins of corrupt governors on innocent citizens), without undermining the legal basis of all sovereign borrowing. No counterparty, at least no commercial counterparty, would lend money to a sovereign believing that the loan …

Corporate Law And Governance, Marco Becht, Patrick Bolton, Ailsa Röell

Center for Contract and Economic Organization

This chapter surveys the theoretical and empirical research on the main mechanisms of corporate law and governance, discusses the main legal and regulatory institutions in different countries, and examines the comparative governance literature. Corporate governance is concerned with the reconciliation of conflicts of interest between various corporate claimholders and the resolution of collective action problems among dispersed investors. A fundamental dilemma of corporate governance emerges from this overview: large shareholder intervention needs to be regulated to guarantee better small investor protection; but this may increase managerial discretion and scope for abuse. Alternative methods of limiting abuse have yet to be …

Does "Say On Pay" Work? Lessons On Making Ceo Compensation Accountable, Stephen Davis

Ira M. Millstein Center for Global Markets and Corporate Ownership

Based on a review of UK experience, advisory shareowner votes on executive compensation policies (“say on pay”) appear practical for adaptation in North America and other markets. They represent a lever that could strengthen both boards and shareholders in the quest to better align top corporate pay with performance. But they are hardly a panacea on their own. They are likely to spur dialogue between boards and shareholders. However, market parties in the UK—which pioneered the advisory vote concept — remain concerned that boards and investors are each falling short of success in tethering pay to performance. US players may …

The Social Costs Of Property Rights In Broadcast (And Cable) Signals, Shyamkrishna Balganesh

Faculty Scholarship

The use of property as a regulatory mechanism in the telecommunications sector is hardly novel. Since the early twentieth century, policy makers and regulators in the United States have experimented with different mechanisms for allocating private rights in the radio spectrum. In 1959, Ronald Coase proposed that the FCC auction rights in the broadcast spectrum and convert broadcast licenses into tradable commodities. However, it was not until very recently that the FCC implemented Coase's idea. At least part of the reason for the long delay in implementing this seemingly efficient mechanism lay in the public nature of broadcasting and the …

Changing Name Changing: Framing Rules And The Future Of Marital Names, Elizabeth F. Emens

Faculty Scholarship

What laws should govern spouses' names at marriage? If a man and a woman marry, should the woman's name change automatically? Or should the woman's name remain the same unless she goes through more or less complicated steps to change it? Contrary to convention, should the man's name change to the woman's? Should both their names be hyphenated? Many variations could be imagined.

The law of marital names has undergone a significant transformation over the past forty years. For about a hundred years of U.S. history, states required married women to take their husbands' names in order to engage in …

Legal Determinacy And Moral Justification, Jody S. Kraus

Faculty Scholarship

Since this is a conference on law and morality, and the topic of this panel is theories of contract law, I thought it particularly appropriate to ask how a theory of contract law can provide a moral justification for contract law. That question can be answered only by providing a more general account of how a legal theory can provide a moral justification for any area of the private law. In this preliminary Essay, I argue that in order morally to justify the private law, a theory of the private law must derive reasons from a normative political theory that …

In Memoriam: Clark Byse, Stephen G. Breyer, Elena Kagan, Andrew L. Kaufman, Todd D. Rakoff, Peter L. Strauss, Richard K. Willard

Faculty Scholarship

The editors of the Harvard Law Review respectfully dedicate this issue to Professor Clark Byse.

Two-Dimensional Doctrine And Three-Dimensional Law: A Response To Professor Weinstein, Philip A. Hamburger

Faculty Scholarship

Professor Weinstein examines how the IRB laws would fare under Supreme Court doctrine, and whereas it is my view that these laws should be considered unconstitutional, he reaches largely the opposite conclusion. His article therefore offers a valuable opportunity for further exploration of the constitutional questions, and although there is not sufficient space here to discuss all of his analysis, it seems important at least to draw attention to the major points on which we take different perspectives.

Tax Expenditures As Foreign Aid, David E. Pozen

Faculty Scholarship

Few issues in global politics are as contentious as foreign aid – how much rich countries should give, in what ways, to whom. For years, it has been a commonplace that U.S. policies are stingy. The Organization for Economic Cooperation and Development (OECD) routinely ranks the United States far behind its industrialized peers in official development assistance (ODA), measured as a percentage of gross national income (GNI). An endless parade of critics has implored the government to do more; some suggest that the Bush Administration's support for the Monterrey Consensus, which sets a goal of increasing assistance to 0.7% of …

Treaties' Domains, Tim Wu

Faculty Scholarship

When and why do American judges enforce treaties? The question, always important, has become pressing in an age where the United States is party to over 12,000 international agreements. Article VI of the United States Constitution declares "all treaties" the "supreme Law of the Land," and American judges have long had the potential power, under the Constitution, to enforce treaties as they do statutes. But over the history of the United States, judges have not enforced treaties that way. Instead, judicial treaty enforcement is widely seen as unpredictable, erratic, and confusing. As a result, the question of treaty enforcement has …

Introduction To The Symposium Issue On Alternative Dispute Resolution Strategies In End-Of-Life Decisions, Carol B. Liebman

Faculty Scholarship

At about 8:30 p.m. on a spring evening approximately twenty-five years ago when I was living in Newton, Massachusetts, our telephone rang. It was the emergency judge on duty that week asking me to go to a nearby suburban hospital to represent a sixty-eight-year-old woman whom I'll call Mrs. P. She had been hospitalized for heart failure and was refusing treatment, saying that she wanted to die with dignity.

Mrs. P and her husband had traveled to Boston from her home, a small town in New York about five hours away, to meet their newest grandchild. When I arrived at …

Launching A Global Rule Of Law Movement: Next Steps November 10, 2005, Katharina Pistor, William Ide, Sandra Day O'Connor, Hilario Davide

Faculty Scholarship

KATHERINE PISTOR: Let me just first express my thanks to the American Bar Association for asking me to be the rapporteur for this conference. I've always felt honored for having been asked. I have to say I feel now even more humbled by the collective wisdom and experience and know-how that has been assembled here and has been expressed over the past two days. So I am in no position right now to pull it all together and give you the strategy of how to move forward. In fact, I do plan to come back to many of you and …

Kernochan Center News - Fall 2007, Kernochan Center For Law, Media And The Arts

Kernochan Center for Law, Media, and the Arts

No abstract provided.

Kernochan Center News - Spring 2007, Kernochan Center For Law, Media And The Arts

Kernochan Center for Law, Media, and the Arts

No abstract provided.

Reconfiguring Industrial Policy: A Framework With An Application To South Africa, Ricardo Hausmann, Dani Rodrik, Charles F. Sabel

Faculty Scholarship

The main purpose of industrial policy is to speed up the process of structural change towards higher productivity activities. This paper builds on our earlier writings to present an overall design for the conduct of industrial policy in a low- to middle-income country. It is stimulated by the specific problems faced by South Africa and by our discussions with business and government officials in that country. We present specific recommendations for the South African government in the penultimate section of the paper.

Social Contagion Of Violence, Jeffrey A. Fagan, Deanna L. Wilkinson, Garth Davies

Faculty Scholarship

In this chapter, we assess whether the roller-coaster pattern of homicides in New York City beginning in 1985 fits a contagion model and identify mechanisms of social contagion that predict its spread across social and physical space. This framework for interpreting the homicide trends as an epidemic includes two perspectives. First, the sharp rise and fall are indicative of a nonlinear pattern in which the phenomenon spreads at a rate far beyond what would be predicted by exposure to some external factor and declines in a similar pattern in which the reduction from year to year exceeds what might be …

Property And Empire: The Law Of Imperialism In Johnson V. M'Intosh, Jedediah S. Purdy

Faculty Scholarship

Chief Justice Marshall's opinion in Johnson v. M'Intosh, 21 U.S. (8 Wheat.) 543 (1823), has long been a puzzle, both in its doctrinal structure and in long, strange dicta which are both triumphal and elegiac. In this Essay, I show that the opinion becomes newly intelligible when read in the context of the law and theory of colonialism, concerned, like the case itself, with the expropriation of continents and relations between dominant and subject peoples.

I examine several instances where the seeming incoherence of the opinion instead shows its debt to imperial jurisprudence, which rested on a distinction between …

Kyoto's Clean Development Mechanism In Action: India, China And Brazil, Michael B. Gerrard, Siddharth Sethy, Hui Xu, Bruno Gagliardi

Faculty Scholarship

The Kyoto Protocol is the principal international agreement to reduce global climate change. The Clean Development Mechanism (CDM) helps achieve the Protocol’s objectives by allowing developed countries to pay for reductions of greenhouse gases in developing countries.

The developing countries that are most actively involved in the CDM – and that have the greatest potential for future involvement – are India, China and Brazil. The purpose of this article is to describe the CDM, the activities in these three countries under the CDM, and the current and future role of the United States under the CDM.

If You Prompt Them, They Will Rule: The Warranty Of Habitability Meets New Court Information Systems, Mary Zulack

Faculty Scholarship

A recent conference on housing rights invited participants to think about the impacts, actual and potential, of the judge-made doctrine of the implied warranty of habitability in residential tenancies. This essay focuses on the warranty, and suggests establishing technology systems for judges to help them give new
life to the doctrine and thereby to accelerate actual repair of rental housing through court mandates.

The conference attendees seemed to agree that when trial judges are presented with claimed breaches of the warranty of habitability, they have not, on the whole, used the doctrine to order that repairs actually be effectuated. They …

Overseer, Or "The Decider"? The President In Administrative Law, Peter L. Strauss

Faculty Scholarship

All will agree that the Constitution creates a unitary chief executive officer, the President, at the head of the government Congress defines to do the work its statutes detail. Disagreement arises over what his function entails. Once Congress has defined some element of government and specified its responsibilities, we know that the constitutional roles of both Congress and the courts are those of oversight of the agency and its assigned work, not the actual performance of that work. But is it the same for the President? When Congress confers authority on the Environmental Protection Agency to regulate various forms of …

Getting Permission, Philip A. Hamburger

Faculty Scholarship

Institutional Review Boards ("IRBs") are the instruments of a system of licensing – a system under which scholars, students, and other researchers must get permission to do research on human subjects. Although the system was established as a means of regulating research, it regulates research by licensing speech and the press. It is, in fact, so sweeping a system of licensing speech and the press that it is reminiscent of the seventeenth century, when Galileo Galilei had to submit to licensing and John Milton protested against it. Accordingly, it is necessary to examine the constitutionality of IRB licensing and, more …

Desperately Seeking Consideration: The Unfortunate Impact Of U.C.C. Section 2-306 On Contract Interpretation, Victor P. Goldberg

Faculty Scholarship

In Section 2-306, the Uniform Commercial Code's drafters intended to assure that two classes of agreements would be enforceable, even though they might appear on their face to be illusory. Variable quantity (output and requirements) contracts were buttressed by reading in a good faith standard (§ 2-306(1)) and exclusive dealing contracts were made enforceable by reading in a best efforts standard (§ 2-306(2)). This was a big mistake. In this paper I show how these two fixes create problems for interpreting contracts. I use two well-known cases, Feld v. Henry S. Levy & Sons, Inc. and Wood v. Lucy, …

The Cost Of Norms: Tax Effects Of Tacit Understandings, Alex Raskolnikov

Faculty Scholarship

Most human interactions take place in reliance on tacit understandings, customary practices, and other legally unenforceable agreements. A considerable literature studying these informal arrangements (commonly referred to as social norms) has a decidedly positive flavor, arguing that many, if not most, of these norms are welfare enhancing. This Article looks at the less-appreciated darker side of social norms. It combines an analysis of modern sophisticated tax planning techniques with existing empirical studies of commercial relationships to reveal a disturbing connection. By relying on tacit understandings rather than express contractual terms, many taxpayers shift some of their tax liabilities to those …

Congress, Article Iv, And Interstate Relations, Gillian E. Metzger

Faculty Scholarship

Article IV imposes prohibitions on interstate discrimination that are central to our status as a single nation, yet the Constitution also grants Congress broad power over interstate relations. This raises questions with respect to the scope of Congress's power over interstate relations, what is sometimes referred to as the horizontal dimension of federalism. In particular, does Congress have the power to authorize states to engage in conduct that otherwise would violate Article IV? These questions are of growing practical relevance, given recently enacted or proposed measures – the Defense of Marriage Act (DOMA) being the most prominent example – in …

The Morality Of Property, Thomas W. Merrill, Henry E. Smith

Faculty Scholarship

The relationship between property and morality has been obscured by three elements in our intellectual tradition. First is the assumption, which can be traced to Bentham, that property is a pure creature of law. An institution assumed to be wholly dependent on law for its existence is unlikely to be infused with strong moral content. Second is the related tradition, also Benthamite, of examining questions about property law from a utilitarian perspective. Utilitarianism is, of course, a moral theory. But in its modern applications, based on price theory and cost-benefit analysis, it adopts a framework largely indifferent to questions of …

Lawyers And Community Economic Development, William H. Simon

Faculty Scholarship

The Articles in this symposium and the experiences they report show that, for lawyers, Community Economic Development (CED) has become a more expansive and more complex subject than it was when we discovered it two decades or so ago.

The Articles and the experiences are particularly revealing about what I would guess have been the two central preoccupations of lawyers in the field. The first, of course, is what we mean by community, and more specifically, how a community can become – or be regarded as – a legal and political actor. The second concerns lawyer accountability. Progressive lawyers have …

Controlling Family Shareholders In Developing Countries: Anchoring Relational Exchange, Ronald J. Gilson

Faculty Scholarship

In recent years, corporate governance scholarship has begun to focus on the most common distribution of public corporation ownership: outside of the United States and the United Kingdom, publicly owned corporations often have a controlling shareholder. The presence of a controlling shareholder is especially prevalent in developing countries. In Asia, for example, some two-thirds of public corporations have one, most of whom represent family ownership. The law and finance literature, exemplified by a series of articles by Rafael La Porta, Florencio Lopez-de-Silanes, Andrei Shleifer, Robert Vishny and others, treats the prevalence of controlling shareholders as the result of bad law; …

The Legacy Of Louis Henkin: Human Rights In The "Age Of Terror" – An Interview With Sarah H. Cleveland, Sarah H. Cleveland

Faculty Scholarship

What effect has Professor Henkin's work had upon your own thoughts or scholarship in the human rights field?

My scholarly work spans the fields of international human rights and U.S. foreign relations law. I am particularly interested in the process by which human rights norms are implemented into domestic legal systems, the role the United States plays in promoting the internalization of human rights norms by other states, and the mechanisms by which the values of the international human rights regime are incorporated into the United States domestic legal system.

To say that Professor Henkin's work has contributed to my …