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Moneys' Legal Hierarchy, Katharina Pistor
Moneys' Legal Hierarchy, Katharina Pistor
Faculty Scholarship
This chapter discusses the way in which money is legally constructed and hierarchically structured. In financial markets, participants trade different forms of money, some of which is state-issued and some privately issued. A form of money is closer to the “apex” of the system the closer it is to entities that can issue liquid means or determine acceptable forms of payment, such as central banks and governments. During financial crises, market participants close to the “apex” are systematically advantaged. Various legal devices, e.g. property rights, collateral rights, or trust law, contribute to hierarchically structuring the financial system, by granting preferential …
Legal Ground Rules In Coordinated And Liberal Market Economies, Katharina Pistor
Legal Ground Rules In Coordinated And Liberal Market Economies, Katharina Pistor
Faculty Scholarship
This chapter seeks to explain the affinity between the nature of economic systems: coordinated market economies (CMEs) and liberal market economies (LMEs) on the one hand, and legal origin (civil vs common law systems) on the other. It starts with the simple observation that LMEs tend to be common law jurisdictions, and CMEs civil law jurisdictions. It proposes that the affinity between economic and legal system offers important insights into the foundations of different types of market economies and, in particular, differences in the scope of the state vs the powers of the individual. The main argument is that the …
Of Legal Transplants, Legal Irritants, And Economic Development, Katharina Pistor, Daniel Berkowitz
Of Legal Transplants, Legal Irritants, And Economic Development, Katharina Pistor, Daniel Berkowitz
Faculty Scholarship
The collapse of the socialist system has given way to unprecedented economic and legal reforms in the former socialist countries. Over the past decade they have enacted new legislation in all areas of the law, drawing heavily on legal models from developed market economies, including common law and civil law countries. While the transplanted laws now on the books is largely consistent with Western practice, the enforcement of these new laws is often ineffective (Berkowitz, Pistor, and Richard, 2003).