Law and Economics Commons^™

Proxy Access Voting: Evaluating Proxy Access And The Recent Phenomenon Of Corporations Adopting Shareholder Protective Policies, Danielle Vukovich

San Diego International Law Journal

Shareholders hold a financial stake in a corporation, and therefore are often viewed as owners of the corporation and believed to be in control for all corporate actions. However, their powers are circumscribed. Board of directors committees nominate directors to serve the corporation and these directors have the power to select the corporation’s officers. The committees provide shareholders a slate of proposed directors that are voted on and approved at the annual shareholder meeting. Shareholders may also propose their own slate of directors, but this typically requires a proxy contest, which can be expensive due to the costs both associated …

Inequities In Corporate And Securities Law: Disabling The Exploitative Chinese Corporation And Charting A Path To International Commercial Accountability, Jonathan P. Schmidt

San Diego International Law Journal

This article seeks to illuminate these issues and provide a roadmap for the U.S. federal and state legislatures to come together to protect the U.S. investor from the type of accounting fraud and stock misinformation that was the impetus behind enacting the Sarbanes-Oxley Act of 2002. First, this article will discuss the legal backdrop and legislative policy behind U.S. laws such as SOX and its enforcement mechanisms, and the ability for shareholders to bring securities class action derivative actions for financial fraud. This article will also discuss trade secrets laws, criminal extradition treaties, international enforcement of judgments, and elucidate the …

Basel Iii And Credit Risk Measurement: Variations Among G20 Countries, Matt Schlickenmaier

San Diego International Law Journal

Most countries require banks to hold extra capital to protect against unforeseen financial calamities; banks with riskier loans must hold more capital than those with safer loans. Basel II, a set of international banking standards, allows banks to measure a loan’s risk in different ways: some banks make their own judgments; others use outside agencies. The recent mortgage crisis prompted banks to reevaluate these methods, in part due to banks having failed to perceive the high level of risk inherent in securitized mortgages. The international community’s response was Basel III, an updated version of its previous standards. This Comment will …

The Genius Of Roman Law From A Law And Economics Perspective, Juan Javier Del Granado

San Diego International Law Journal

The Article is organized as follows: The first part of this Article will introduce Roman private law, and sketch out the law and economics methodology to be applied to the Roman classical system. The second part of this Article will discuss the Roman private law of property, obligations, as well as commerce and finance. The third part will discuss the interaction of private law and private morality in the construction of Roman social order. The fourth part of this Article will discuss private procedural aspects of the Roman legal system. The fifth and final part of this Article will discuss …

Socioeconomic Rights And Theories Of Justice, Jeremy Waldron

San Diego Law Review

This Article considers the relation between theories of justice - such as John Rawls's theory - and theories of socioeconomic rights. In different ways, these two kinds of theories address much of the same subject matter. But they are quite strikingly different in format and texture. Theories of socioeconomic rights defend particular line-item requirements: a right to this or that good or opportunity, such as housing, health care, education, and social security. Theories of justice tend to involve a more integrated normative account of a society's basic structure, though they differ considerably among themselves in their structure. So how exactly …

The Dangerous Illusion Of International Financial Standards And The Legacy Of The Financial Stability Forum, Cally Jordan

San Diego International Law Journal

In the aftermath of the Asian Financial Crisis, and the criticism directed towards the International Monetary Fund, in particular, for not having seen it coming, the Financial Stability Forum (FSF) was created in 1999 under a mandate from the G7 ministers of finance and central bank governors. The Asian Financial Crisis arose suddenly, spread rapidly, and spared neither developed nor developing economies in the region, although some fared much better than others. In retrospect, the causes of the crisis were obvious and the consequences predictable. Contagion entered the financial lexicon. Thus, the role of the FSF was to promote financial …

Economic And Social Rights: The Role Of Courts In China, Randall Peerenboom

San Diego International Law Journal

This Article considers what the role of the courts could and should be in implementing ESR in China. Part II surveys recent global developments giving greater bite to economic and social rights, as well as some of the main controversies, debates, and approaches to promoting, protecting, and fulfilling ESR, with particular attention to the role of the courts. Part III provides a general introduction to the social, legal, political, and economic context in China, and contrasts the situation in China with South Africa?one of the global leaders in judicial implementation of ESR. The overall environment in China is, if not …

A Test Case In International Bankruptcy Protocols: The Lehman Brothers Insolvency, Jamie Altman

San Diego International Law Journal

Part II of this Article, explains the competing theories underlying bankruptcy systems: universalism and territorialism. Part III details various statutory solutions to international bankruptcy problems. Next, Part IV analyzes the provisions of the Lehman Protocol in depth. Part V then examines the precedent upon which the Lehman Protocol relies. Part VI assesses potential threats to the Protocol?s success. This leads to Part VII, which contains suggestions for future protocols. Finally, Part VIII concludes.

Private And Public Construction In Modern China, Gregory M. Stein

San Diego International Law Journal

During the past three decades, real estate development in China has proceeded at an astonishing pace, with much development occurring before China's 2007 adoption of its first modern law of property. Investors thus spent hundreds of billions of dollars in the real estate market of a nation that, during most of this period, had not formal property law. How can a huge nation modernize so rapidly and dramatically when its legal system furnishes such uncertainty? And how can this happen in a nation that still purports to subscribe to socialist ideology? I set out to answer these questions by interviewing …

Evolving Regulation Of Corporate Governance And The Implications For D&O Liability: The United States And Australia, Joan T.A. Gabel, Nancy R. Mansfield, Paul Von Nessen, Austin W. Hall, Andrew Jones

San Diego International Law Journal

This Article compares the modern corporate regulatory environments in the United States and Australia, including an analysis of the climate for Directors & Officers (D & O) liability coverage. Comparing these regulations across two large markets with similar historical bases for assessing director and officer liability allows us to explore which reforms may be more effective as new scandals emerge.

Korea's Patent Policy And Its Impact On Economic Development: A Model For Emerging Countries?, Jay A. Erstling, Ryan E. Strom

San Diego International Law Journal

The purpose of this paper will be to examine Korean patent policy as exemplified by its patent legislation and the activities of KIPO. Part II will take a brief look at the rationale underpinning Korea’s confidence in the power of the patent system to stimulate economic growth. Part III of the paper will look at the Korean Patent Act as an example of strong, comprehensive patent legislation that fully complies with international standards and responds well to the perceived needs of patent applicants. Part III will examine one of the highlights of Korean patent legislation, the Korean Invention Promotion Act, …

Making Transfer Of Clean Technology Work: Lessons Of The Clean Development Mechanism, Mei Gechlik

San Diego International Law Journal

This Article takes a closer look at the case of China to fill the gap. It draws on numerous sources including Chinese laws and regulations, the country's policies on climate change, the country's technological capabilities and business environment, observations made by CDM specialists, and other studies of CDM projects. Such a comprehensive discussion, together with Dechezleprete et al.'s findings, will present a more complete picture of what actually drives the transfer of clean technologies to China and will, therefore, help design an effective post-Kyoto framework to facilitate international diffusion of clean technologies.

The Proliferation Of Global Reits And The Cross-Borderization Of The Asian Market, Julius L. Sokol

San Diego International Law Journal

After a brief discussion on the history of REITs, this Article goes on to analyze their importance and role within the global and Asian economy. Next, the underlying motivations for legal amendments to the REIT structures are discussed, as well as the socio-economic benefits associated with coordinating liberal REIT legislation throughout Asia. Subsequently, this article analyzes the various regulatory aspects of the regimes in Japan, Singapore, Hong Kong, South Korea, Thailand and Malaysia. In exploring their shortcomings, comparisons are made to the highly successful United States REIT structure. Given the history of our nation's regime, it goes without saying that …

Public International Law And The Wto: A Reckoning Of Legal Positivism And Neoliberalism, S. G. Sreejith

San Diego International Law Journal

This Article proceeds in five parts. In part one, I review the scholarly skepticism as to how far international law is law in the "hard" sense and show that this skepticism has always permeated the discipline. In part two, I go on to examine what has prompted contemporary scholarship to credit the WTO with helping international law grow out of the "thin" normativity often attributed to it. The analysis suggests that certain features of legal positivism customarily associated with law in its strict sense, which were alleged to be lacking in international law, are found in the institutional apparatus of …

The Antinomies Of The (Continued) Relevance Of Icsid To The Third World, Ibironke T. Odumosu

San Diego International Law Journal

The international law on foreign investment is commonly accepted as one of the most controversial areas of international law. Not only does international investment law lack clear rules on investment promotion and protection, this area of the law has always generated opposing rules, and implicates divergent interests in the process. In the face of unclear rules, and against the backdrop of the need to protect foreign investment through the internationalization of investment dispute settlement, and the position that this will facilitate investment flows to Third World states, the World Bank established the International Centre for the Settlement of Investment Disputes …

Richard Posner Meets Reb Chaim Of Brisk: A Comparative Study In The Founding Of Intellectual Legal Movements, Samuel J. Levine

San Diego International Law Journal

This Essay aims to examine some of the common elements of law and economics and the Brisker method that have contributed to their success as intellectual movements. Toward that end, the Essay compares the founding principles of these movements, exploring similarities in their essential characteristics. Part I presents and analyzes representative examples of the conceptual approach underlying each of these methods. Drawing on these and other examples of each method, Part II observes that the success of the methods stems in part from their common reliance on historical antecedents as well as their emphasis on conceptual frameworks broadly applicable within …

Vat? A Look Inside Canada's Experience With The Goods And Services Tax, Brandon A. Ketterman

San Diego International Law Journal

Consumption taxes have been and continue to be utilized as a staple revenue producer within systems of taxation. The value-added tax (VAT) is one form of consumption tax that has grown in popularity among nations over the last several decades. In fact, after the passage of a goods and services tax (one type of VAT) in Australia in 2000, the United States now stands alone as the only remaining OECD nation, among its 30 members, without some form of a value-added tax on consumption. As the massive topic of tax reform continually appears at the forefront of the political landscape, …

The Human Face Of Resource Conflict: Property And Power In Nigeria, Karol C. Boudreaux

San Diego International Law Journal

This paper considers possible answers to these difficult questions by focusing on two issues: the evolution of legal norms in response to both endogenous and exogenous changes, and the role that African customary law and indigenous dispute resolution has played in promoting coordination and cooperation among group members, thereby reducing violent conflict. This paper explores legislative actions taken by the Nigerian government that impede the continued evolution of these relatively elastic customary legal norms. Property norms under customary Nigerian law were flexible enough to provide a wide variety of property rights and allow for the peaceful trading and reasonable protection …

Social Choice, Crypto-Initiatives And Policy Making By Direct Democracy, Thad Kousser, M D. Mccubbins

University of San Diego Law and Economics Research Paper Series

The initiative process was created originally to enable citizens to enact public policy directly and in so doing to overturn the dominion of interest groups and of state and local party machines. In recent years, initiatives have been thought to serve as a check on legislative authority and to provide the people with a means to pressure the legislature into adopting more public regarding policies. Indeed, the general consensus emerging from the most recent academic research is that, at their worst, initiatives are benign, while at their best, they serve to further the interests of electoral majorities.

A few scholars, …

Canonical Construction And Statutory Revisionism: The Strange Case Of The Appropriations Canon, Daniel B. Rodriguez, Mathew D. Mccubbins

University of San Diego Law and Economics Research Paper Series

In this article, we consider the impact of positive political theory on legislative interpretation and, in particular, the debate over interpretive canons. Our vehicle for this consideration is the appropriations canon. By virtue of this canon, courts construe narrowly legislative changes to statutes made through the appropriations process. We consider the underlying logic and rationale of this canon -- essentially, that the appropriations process is unrepresentative and insufficiently deliberative -- and use this analysis to investigate, more broadly, the processes of canonical construction in the modern statutory interpretation jurisprudence. Canonical construction, we argue, must be attentive to the equilibrium effects …

The Web Of Law, Thomas A. Smith

University of San Diego Law and Economics Research Paper Series

Scientists and mathematicians in recent years have become intensely interested in the structure of networks. Networks turn out to be crucial to understanding everything from physics and biology, to economics and sociology. This article proposes that the science of networks has important contributions to make to the study of law as well. Legal scholars have yet to study, or even recognize as such, one of the largest, most accessible, and best documented human-created networks in existence. This is the centuries-old network of case law and other legal authorities into which lawyers, judges, and legal scholars routinely delve in order to …

Descriptive Trademarks And The First Amendment, Lisa P. Ramsey

University of San Diego Law and Economics Research Paper Series

The protection of exclusive rights in descriptive trademarks is an unconstitutional restriction of speech under the First Amendment. Trademark laws that prohibit a competitor from using trademarked descriptive words to sell a product fail to satisfy the Central Hudson test for evaluating the constitutionality of commercial speech regulations. The use of a descriptive term to accurately describe a product is not misleading expression regardless of whether another business claims trademark rights in that term. Although the government has a substantial interest in protecting the ability of consumers to identify and distinguish among the products of a business and its competitors, …

Procedural Justice, Lawrence B. Solum

University of San Diego Law and Economics Research Paper Series

"Procedural Justice" offers a theory of procedural fairness for civil dispute resolution. The core idea behind the theory is the procedural legitimacy thesis: participation rights are essential for the legitimacy of adjudicatory procedures. The theory yields two principles of procedural justice: the accuracy principle and the participation principle. The two principles require a system of procedure to aim at accuracy and to afford reasonable rights of participation qualified by a practicability constraint.

The Article begins in Part I, Introduction, with two observations. First, the function of procedure is to particularize general substantive norms so that they can guide action. Second, …

The European Neighborhood Policy And Its Impact On The Israel - European Union - United States Triangle, Guy Harpaz

San Diego International Law Journal

This Article is not intended to deal with the feasibility of successfully implementing the [European Neighbourhood Policy] ENP, nor does it address its normative aspects from the European perspective. Instead, this article assumes that the parties will successfully implement the ENP, and on the basis of that assumption, attempts to provide a first, critical and interdisciplinary examination of the potentially significant impact of the ENP on the legal, economic, social, and trade landscape of the State of Israel, her citizens, economy, and on her relations with the EU and the United States.

Strict Liability For Gatekeepers: A Reply To Professor Coffee, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

This article responds to a proposal by Professor John C. Coffee, Jr. for a modified form of strict liability for gatekeepers. Professor Coffee’s proposal would convert gatekeepers into insurers, but cap their insurance obligations based on a multiple of the highest annual revenues the gatekeepers recently had received from their wrongdoing clients. My proposal, advanced in 2001, would allow gatekeepers to contract for a percentage of issuer damages, after settlement or judgment, subject to a legislatively-imposed floor. This article compares the proposals and concludes that a contractual system based on a percentage of the issuer’s liability would be preferable to …

Encumbered Shares, Shaun Martin, Frank Partnoy

University of San Diego Law and Economics Research Paper Series

The fundamental assumptions in the law and economics literature about shareholder voting and the one-share/one-vote rule are flawed. The classic view is that share ownership is necessary and sufficient to create voting rights and that such rights should be directly proportional to share ownership. We demonstrate that this assumption is unfounded, both for shares that are “economically encumbered” (held by shareholders who are not pure residual claimants; e.g., a shareholder who owns one share and is also short one or more shares) as well as shares that are “legally encumbered” (held or associated with more than one shareholder; e.g., shares …

Estate Tax Repeal And The Budget Process, Karen C. Burke, Grayson M.P. Mccouch

University of San Diego Law and Economics Research Paper Series

This article examines the Bush Administration’s proposal, as part of its proposed fiscal year 2005 budget, to extend permanently the repeal of the federal estate tax. The article considers the budgetary impact of permanent estate tax repeal and discusses procedural impediments to use of the reconciliation process for permanent tax cuts. The article also notes the possibility of a durable compromise solution involving retention of the estate tax with lower rates and a higher exemption.

Does The Tax Law Discriminate Against The Majority Of American Children: The Downside Of Our Progressive Rate Structure And Unbalanced Incentives For Higher Education?, Lester B. Snyder

University of San Diego Law and Economics Research Paper Series

Our graduate income tax structure provides an incentive to shift income to lower-bracket family members. However, some parents have much more latitude to shift income to their children than do others. Income derived from services and private business-by far the majority of American income-is less favored than income derived from publicly traded securities. The rationale given for this discrimination is that parents in services or private business, as opposed to those in securities, do not actually part with control of their property. This article explores these tax broader (yet subtle) tax benefits and their impact on the majority of children …

The New Partnership For Africa's Development: Institutional And Legal Challenges Of Investment Promotion, Victor Mosoti

San Diego International Law Journal

This paper is divided into five parts. Part I introduces NEPAD, its philosophical basis and objectives. Part II discusses the investment promotion role of NEPAD and its difference from past development thinking about Africa's problems. In Part III we discuss NEPAD's strategy for realizing investment flows into Africa, some of the NEPAD's institutional weaknesses, and the repercussions thereof in realizing the NEPAD objectives. It also highlights the potential implications of NEPAD to the regional integration plan in Africa. Taking into account the supposed political clash between NEPAD and the AU, Part IV discusses possible ways of restructuring NEPAD to enable …

Human Development Challenges In Africa: A Rights-Based Approach, Dejo Olowu

San Diego International Law Journal

This paper examines this plethora of questions and attempts to move the theory of human development in Africa beyond the traditional confines of its macroeconomic and political propositions. The paper assesses the concept of human development within the broader discourse on the role of human rights in global development, highlighting the overall African context of the subject. Against the backdrop of remarkably increasing scholarly efforts aimed at establishing human development as a human rights question, this paper evaluates the capacity of existing and emerging human rights frameworks relevant to Africa, and identifies viable trajectories for result-oriented human development actions.