Law Commons^™

Sovereign Funds: Opportunities And Concerns, Myriam Kairouz Aucar

Myriam Kairouz Aucar

Sovereign funds are not a new notion. But they are attracting so much attention now because of their size, their rapid growth having quadrupled in size between 2003 and 2007 , and because they are investing in the US financial market institutions. This paper will explain the Sovereign Wealth Funds, address the concerns they raise as well as their importance, and try to get a view of how to balance the need for these funds with the dangers they represent. The paper also discusses some protective measures that have been emplemeted as well as some suggested protective measures.

The Nonpecuniary Costs Of Sarbanes Oxley, Nicholas V. Vakkur

Nicholas v Vakkur

Sarbanes Oxley is widely considered the most comprehensive economic regulation since the New Deal. While research has evaluated its financial costs, relatively little is known about the non-financial impact of the law upon firms. We develop six hypotheses regarding the non-financial impact of Sarbanes Oxley, incorporating learning from a comprehensive literature review across multiple disciplines. To evaluate this theory, an original survey was developed and implemented on a random sample of Fortune 500 firms (n = 206). An ordered probit model was used to quantify the results. While many economists consider business surveys to be at least as important as …

If They Could Only Eat Efficiency: How Airline Deregulation And The Bankruptcy Code Joined Forces To Undermine Airline Workers And What Can Be Done About It, Ashton S. Phillips

Ashton S. Phillips `

As a species of mass transportation, the airline industry is incapable of making a sustained profit in an unregulated economy. Without regulation, easy access to reorganization and government subsidies only facilitate bloated supply in the air travel market. Bloated supply leads to decreased market price of airfare. This decrease helps consumers, but it doesn't help airlines achieve profitability. Under the current legal scheme, if airlines can't achieve profitability, airline workers will continue to subsidize the industry with radically decreased pay and lost retirement benefits. If Congress increases airline workers' rights in bankruptcy and merger contexts, their positions will be temporarily …

Who Needs The Stock Market? Part I: The Empirical Evidence, Lawrence E. Mitchell

Lawrence E. Mitchell

Data on historical and current corporate finance trends drawn from a variety of sources present a paradox. External equity has never played a significant role in financing industrial enterprises in the United States. The only American industry that has relied heavily upon external financing is the finance industry itself. Yet it is commonly accepted among legal scholars and economists that the stock market plays a valuable role in American economic life, and a recent, large body of macroeconomic work on economic development links the growth of financial institutions (including, in the U.S, the stock market) to growth in real economic …

Institutional Arrangements, Property Rights And The Endogenity Of Comparative Advantage, Nita Ghei

Nita Ghei

Comparative advantage is determined not merely by exogenous factor endowments. Institutional arrangements, and security of property rights, affect comparative advantage and the pattern of trade as well. Developing countries would be better off using their scarce institutional capital on securing property rights rather than trying to pick “winners” using strategic trade policy.

A Troubled House Of Cards: Examining How The “Housing And Economic Recovery Act Of 2008” Fails To Resolve The Foreclosure Crisis, Chad Emerson

Chad Emerson

No abstract provided.

Pro Bono Publico As A Conscience Good, Deborah A. Schmedemann

Deborah Schmedemann

Pro bono work performed by American lawyers serves a critical role in the American civil justice system. This paper seeks to explain pro bono through the lens of social science research into volunteering, in particular the economic concept of a conscience good. The paper presents the results of an empirical study involving over 1,100 law students and lawyers. The results include data on lawyers’ motivations to perform pro bono, the impact of various pro bono rules and invitations to perform pro bono, the satisfactions of pro bono work, emotions triggered by pro bono work and pro bono clients, and the …

Pro Bono Publico As A Conscience Good, Deborah A. Schmedemann

Deborah Schmedemann

Pro bono work performed by American lawyers serves a critical role in the American civil justice system. This paper seeks to explain pro bono through the lens of social science research into volunteering, in particular the economic concept of a conscience good. The paper presents the results of an empirical study involving over 1,100 law students and lawyers. The results include data on lawyers’ motivations to perform pro bono, the impact of various pro bono rules and invitations to perform pro bono, the satisfactions of pro bono work, emotions triggered by pro bono work and pro bono clients, and the …

The Role Of Private Sector Investment In International Microfinance And The Implications Of Domestic Regulatory Environments, William A. Langer

William A Langer

The Role of Private Sector Investment in International Microfinance and the Implications of Domestic Regulatory Environments

By William Langer

Microfinance – the practice of providing small, working capital loans and other financial services to poor individuals unable to obtain access to commercial sources of credit – has been able to transform the lives of over 100 million microentrepreneurs and their families in various regions throughout the world. Despite this impressive achievement, microfinance currently reaches only 10% of the estimated demand for microfinance services, comprised of approximately 1 to 1.5 billion self-employed poor persons worldwide. Practitioners agree that in order to …

Dr. Miles Is Dead. Now What?: Structuring A Rule Of Reason For Evaluating Minimum Resale Price Maintenance, Thomas A. Lambert

Thomas A. Lambert

In Leegin Creative Leather Prods., Inc. v. PSKS, Inc., decided in 2007, the U.S. Supreme Court overruled its 1911 precedent declaring vertical minimum resale price maintenance (RPM) to be per se illegal. The Leegin Court held that the practice should instead be examined on a case-by-case basis under antitrust's rule of reason. The Court further exhorted the lower courts to craft a "structured" rule of reason for evaluating RPM. This article critiques six approaches that have been proposed for evaluating minimum RPM and offers an alternative approach. The six approaches critiqued are (1) the Brandeisian, unstructured rule of reason; (2) …

Nudging For Liberty: Values In Libertarian Paternalism, Michael S. Mcpherson, Matthew A. Smith

Michael S. McPherson

In their recent book, Nudge, Richard Thaler and Cass Sunstein argue persuasively that default rules, framing effects, etc., can be used to promote people's welfare. Through a range of empirical examples, we show that it is possible and often preferable to promote values other than welfare. For example, in certain situations default rules can be used to promote people’s exercise of liberty, the equality between citizens, or any other number of values. The core of the paper is showing that these examples do not devolve into welfare, and thereby enhancing the range of options open to policy makers.

To Hell With Kyoto, It’S Time For Something Real!, Altdus Ray Frank

Altdus Ray Frank

The intended gift of clean air and pristine atmosphere through the inception of the Kyoto Protocol was meant to be a measure to protect the environment for not only the present generation, but the future as well. Instead of accepting this gift, humanity has yet again showed its darker side; shredding the ambitious purpose of this document and crucifying its creators as being overzealous, overbearing fools. People must come to terms and understand that environmental catastrophe is the single greatest threat faced by humanity today.

It is time for a new dawn, a new era where, the global community has …

Maximizing Social Influence To Minimize Carbon Emissions: Law And Social Norms In Collective Action, Jed S. Ela

Jed S Ela

Legal scholars have long argued that informal social norms can solve collective action problems, as long as these problems occur in close-knit groups. This “group knittedness hypothesis” may suggest that social norms, by themselves, will not be able to solve the world’s largest collective action problem: anthropogenic climate change. Yet recent scholarship has taken the group knittedness hypothesis too far, suggesting that any attempt to manage social influences in large, loose-knit groups is likely to be relatively ineffective.

In fact, social norms can shape individual behavior even in loose-knit groups, and climate policies that ignore norms may miss important opportunities …

Implications Of The Uk Companies Act 2006 For Institutional Investors And The Corporate Social Responsibility Movement, Gordon L. Clark, Eric R. W. Knight

Eric R Knight

Non-governmental organisations, activists, and the public-at-large hold large firms accountable on many issues including their environmental footprints and the social standards of their suppliers around the world. For those coming from European social democratic traditions, stakeholders have a legitimate voice in the affairs of the corporation especially in two-tiered governance regimes that separate supervision from management. Notwithstanding attempts to re-write their proper roles and responsibilities, the Anglo-American corporation is widely believed to be the medium for the accumulation of shareholder value.

Recently, however, a counter-argument has emerged suggesting that the UK Companies Act 2006 broke with this tradition to embrace …

Midnight Regulations And Regulatory Review, Jerry Brito

Jerry Brito

The term “midnight regulations” describes the dramatic spike of new regulations promulgated at the end of presidential terms, especially during transitions to an administration of the opposite party. As commentators have pointed out, this phenomenon is problematic because it is the result of a lack of presidential accountability during the midnight period—the time after the November election and before Inauguration Day. Midnight regulations, however, present another problem that receives little attention. It is the prospect that an increase in the number of regulations promulgated in a given time-period could overwhelm the institutional review process that serves to ensure that new …

Deeply And Persistently Conflicted: Credit Rating Agencies In The Current Regulatory Environment, Timothy E. Lynch

Timothy E. Lynch

Credit rating agencies have a pervasive and potentially devastating influence on the financial well-being of the public. Yet, despite the recent passage of the Credit Rating Agency Reform Act, credit rating agencies enjoy a relative lack of regulatory oversight. One explanation for this lack of oversight has been the appeal of the potentially self-regulating nature of credit rating agencies that claim to rely deeply on their reputational standing within the financial world. There are strong arguments for doubting this reputational concern, including the conflicting self-interest of credit rating agencies whose profits are gained or lost depending on their ability to …

Loco Labels And Marketing Madness: Improving How Consumers Interpret Information In The American Food Economy, Margaret Sova Mccabe

Margaret Sova McCabe

America's current food labeling scheme, as illustrated by the example of salt, is flawed when examined from the consumer and public health perspective. While the Food, Drug, and Cosmetic Act has sound scientific standards, those standards as currently applied to labels do not efficiently signal health information to consumers. Without better information on labels, consumers will continue to make poor choices at the grocery store. However, there are promising new ways to label. Both the United Kingdom and the domestic supermarket chain Hannaford’s have implemented simple health labeling on food packaging or grocery shelves to improve the amount and location …

Competition And Predation In The Airline Industry, Gustavo M A Pinto

Gustavo M A Pinto

New theories on predatory conduct argue that predatory pricing is not such a rare phenomenon as supported by the Chicago school. Strategic analysis conducted under a game theory prism have shown that there is more rationality in this type of behavior than earlier thought, and some scholars have even proposed the possibility of above cost predatory pricing strategies. The airline industry has been particularly susceptible to the discussion of these “Post-Chicago” theories. Courts and agencies on both sides of the Atlantic have shown an increased willingness to investigate above cost predatory pricing claims in this industry. This article aims at …

Is Arbitration Under Attack? Exploring The Recent Judicial Skepticism Of The Class Arbitration Waiver And Innovative Solutions To The Unsettled Legal Landscape, Ramona L. Lampley

Ramona L. Lampley

This article explores the hotly debated field of enforcing arbitration clauses with binding class-action waivers. While the enforcement of arbitration clauses generally, and those with class-action waivers specifically, has undergone much debate in the past three years in both the academic and judicial fora; this article casts a new look on the analysis. Instead of advocating simply for or against the enforcement of the class-action waiver, this article analyzes the dialogue between the consumer products industry and the consuming public, via the court system. This dialogue has resulted in a “new wave” of consumer products arbitration agreements: agreements that are …

Exposing The Myth Of Homo Economicus, Ronald J. Colombo

Ronald J Colombo

The prevalence of the "homo economicus" model of humanity has crowded out considerations of important noneconomic aspects of human nature - most importantly, the moral dimension of human thought and conduct. As a result, our understanding of the present ills besetting the business world and the market economy is incomplete, and the policy prescriptions flowing therefrom are often suboptimal (if not counterproductive).

This book review situates "Moral Markets" within this larger debate over human nature generally. I show how, through the presentation of biological evidence and evolutionary theory, "Moral Markets" repudiates the "homo economicus" model of humankind, and supports the …

The Social Cost Of Dangerous Products: An Empirical Investigation, Sidney A. Shapiro, J. Paul Leigh, Ruth Ruttenberg

Sidney A Shapiro

The debate over far reaching changes in the common law of torts has produced a number of empirical studies focused on the operation of the tort litigation system. None of these studies, however, offers a sufficient measurement of the value of the tort system when it deters the sale of consumer products that are defective under the relevant common law product liability standards. Our study directly estimates the cost of injuries and fatalities attributable to three dangerous products: Ford SUV’s with Firestone tires, the pharmaceutical drug Baycol, and All Terrain Vehicles (ATVs) with three wheels and discusses the implications of …

The Effect Of 2005 Bankruptcy Reform On Credit Card Industry Profits And Prices, Michael N. Simkovic

Michael N Simkovic

The U.S. Bankruptcy code changed dramatically with the passage of The Bankruptcy Abuse Prevention and Consumer Protection Act Of 2005. This act increased the costs and decreased the benefits of bankruptcy to consumers. Supporters of the law claimed that it would benefit consumers as well as creditors, because reducing the losses faced by creditors would lower the cost of credit to consumers. Critics of the law depicted it as special interest legislation designed to profit credit card companies at the expense of consumers. This study tests whether the 2005 Bankruptcy Reform: (1) reduced the number of bankruptcies; (2) reduced credit …

The Medium Of Exchange Paradigm: A Fresh Look At Compensated Live-Organ Donation, Dean Lhospital

Dean Lhospital

For over twenty years, human live-organ sales have been banned in the United States and most of the rest of the world. Observations and data arising from black market transactions and the few legal markets for organs suggest that permitting and regulating organ sales leads to more humane conditions than outlawing sales. Despite the data, opponents of organ sales still argue that selling human organs devalues human life. This article examines the panoply of organ markets – white, grey, and black – and identifies the source of this cognitive dissonance. Recognizing that there is a fundamental paradox in ethical objections, …

The Economic Realities Of Immigration In The United States: Implications For Policy, Emily A. Harrell, David L. Franklin

Emily A Harrell

This paper presents a discussion of economic issues regarding the recent influx of illegal immigrants into the USA and is based on a review of economic literature about the issues. It uses a set of studies to frame the economic issues in terms of the current ongoing debate regarding the benefits and costs accruing to the US economy from the upsurge in immigration. It concludes with a discussion of the political economy underlying the debates as a means for suggesting policy and or legal reform initiatives that may be warranted in light of the debates, the available analyses, and the …

Going From The Frying Pan Into The Fire? A Critique Of The U.S. Treasury’S Newly Proposed Section 987 Currency Regulations, Joseph L. Tobin

Joseph L Tobin

In September 2006, the IRS proposed new regulations for taxation of currency gains and losses for U.S. corporations' foreign branches. The IRS has announced that it would like to finalize them as soon as possible, perhaps as early as the summer of 2008. The new regulations withdraw the old section 987 regulations of 1991. The IRS believes these new regulations are necessary in order to prevent taxpayers from taking "artificial" currency losses on assets such as land and machinery -- assets which do not vary with the exchange rate, according to the IRS. The new regulations propose to stop these …

International Strategic Alliance, Mohd Arif

Mohd Arif

A Strategic Alliance is a relationship between firms to creat more value than they can on their own

Ripping Off Grandma And Grandpa Without Hurting The Banks Of America: Allowing The Elderly And Other Easy Prey To Pay For The Crimes Of Immoral Individuals And Institutions, Brett D. Maxfield

Brett D Maxfield

This paper looks at the abuses of the banks of America in the ways they influence the law of credit and debt collection and what can be done to reform the system.

The Effect Of Enhanced Disclosure On Open Market Stock Repurchases, Michael N. Simkovic

Michael N Simkovic

Publicly traded companies distribute cash to shareholders either through dividends or through anonymous repurchases of the companies’ own stock on the open market. Companies must announce a repurchase authorization, but do not actually have to repurchase any stock, and until recently did not have to disclose whether or not they were in fact repurchasing any stock. Scholars and regulators noticed that companies frequently announced repurchases but then appeared not to complete them. They feared that such announcements might be used by insiders to exploit public investors. To reduce opportunities for exploitive behavior, the SEC required that companies disclose their repurchase …

Directed Brokerage, Conflicts Of Interest, And Transaction Cost Economics, D. Bruce Johnsen

D. Bruce Johnsen

This paper relies on the economics of transaction costs to assess the likely effect on investor welfare of the U.S. Securities and Exchange Commission’s (SEC’s) prohibition on a puzzling business practice known as directed brokerage. Its key insight is that the quality of a broker’s execution of portfolio trades is difficult for a mutual fund adviser to assess until it is too late ─ that is, execution quality is an “experience good.” Low-quality brokerage can substantially reduce investor returns. To have the incentive to provide high-quality execution, a broker must expect to receive a stream of premium portfolio commissions in …

Analogy By Necessity: The Filed Rate Doctrine And The Judicial Review Of The Agency Inaction, Julia Gorodetsky

Julia Gorodetsky

This paper argues that the judicial review of private party antitrust claims predicated upon market-based tariffs, filed with a regulatory agency, should not be precluded by the filed rate doctrine (an antitrust doctrine that prevents challenge of electricity rates once they have been filed with, and approved by, the regulatory agency). The paper analogizes the filed rate doctrine with the notion of agency inaction in administrative law. Applying the Heckler test to the specifics of a case study leads to the general conclusion that there is a strong case for making all agency market-based tariff approval decisions presumptively reviewable in …