Accounting for the Hidden Economy: Barriers to Legality and Legal Failures

This paper examines how much of the difference in the size of the informal sector and in per capita income across countries can be accounted by regulation costs (barriers to legality) and contractual imperfections in financial markets (legal failures). It constructs and solves numerically a general equilibrium model with credit constrained heterogeneous agents, occupational choices over formal and informal businesses, contractual imperfections and a government sector which imposes taxes and regulations on formal firms. The premium from formalization is better access to outside finance. differences in regulation costs and the degree of enforcement in financial contracts endogenously generate differences in the size of the informal sector and in total factor productivity (TFP). The numerical exercises suggest that: (i) regulation costs and not financial market imperfections account for the difference in the size of the informal sector between United States and Mediterranean Europe; (ii) this is not the case for countries with very weak enforcement systems, such as Peru, as both contractual imperfections and regulation costs account for the observed difference in the size of the informal sector. Regarding output per capita, regulation costs and the strength of enforcement explain roughly 60% of the difference in observed international incomes.

The Choice-Based Perspective of Choice-of-Law

This article offers an innovative basis for the choice-of-law question: the Choice-Based Perspective (CBP). The main argument is that there exists an alternative rights-based understanding of choice-of-law to that which is presently known as the vested rights theory. This understanding is based on the legal philosophy of perhaps the greatest expositor of the rightsbased concept, Immanuel Kant. In contrast to alternative approaches, CPB insists on a purely private conception of the subject, grounded on an organizing principle of unity of persons\u27 choices. Furthermore, the proposed approach holds much sway in practice, for the normative underpinnings of CBP are already embedded in many traditional and contemporary choice-of-law rules, doctrines, and concepts

The Choice-Based Perspective of Choice-of-Law

This article offers an innovative basis for the choice-of-law question: the Choice-Based Perspective (CBP). The main argument is that there exists an alternative rights-based understanding of choice-of-law to that which is presently known as the vested rights theory. This understanding is based on the legal philosophy of perhaps the greatest expositor of the rightsbased concept, Immanuel Kant. In contrast to alternative approaches, CPB insists on a purely private conception of the subject, grounded on an organizing principle of unity of persons\u27 choices. Furthermore, the proposed approach holds much sway in practice, for the normative underpinnings of CBP are already embedded in many traditional and contemporary choice-of-law rules, doctrines, and concepts

NGO Legitimacy: Four Models

The aim of this paper is to examine NGOs’ legitimacy in the context of global politics. In order to yield a better understanding of NGOs’ legitimacy at the international level it is important to examine how their legitimacy claims are evaluated. This paper proposes dividing the literature into four models based on the theoretical and analytical approaches to their legitimacy claims: the market model, social change model, new institutionalism model and the critical model. The legitimacy criteria generated by the models are significantly different in their analytical scope of how one is to assess the role of NGOs operating as political actors contributing to democracy. The paper argues that the models present incomplete, and sometimes conflicting, views of NGOs’ legitimacy and that this poses a legitimacy dilemma for those assessing the political agency of NGOs in world politics. The paper concludes that only by approaching their legitimacy holistically can the democratic role of NGOs be explored and analysed in the context of world politics

Arbitration Of Investors’ Claims Against Issuers: An Idea Whose Time Has Come?

Ever since the U.S. Supreme Court held that arbitration provisions contained in brokerage customers’ agreements were enforceable with respect to federal securities claims, proposals have been floated to include in an issuer’s governance documents a provision that would require arbitration of investors’ claims against the issuer. To date, however, publicly traded domestic issuers and their counsel have not seriously pursued these proposals, probably because of several legal obstacles to implementation. In addition to these legal obstacles, publicly traded issuers may not have perceived significant advantages to arbitration. Recent legal developments, however, make inclusion of an arbitration provision in a publicly traded issuer’s governance documents a proposal worthy of serious consideration. In particular, because of the Supreme Court’s recent opinion in AT&T Mobility LLC v. Concepcion, issuers may be able to achieve an advantage through adoption of an arbitration provision in their governance documents that they were not able to achieve through PSLRA and the Securities Litigation Uniform Standards Act. They could finally achieve the demise of securities class claims

IVF Battles: Legal Categories and Comparative Tales

Coupled with modern reproductive technologies, the ancient desire for parenthood has led to novel legal challenges. This essay discusses landmark cases addressing those challenges. At the outset, it distinguishes between two litigation paradigms in this area—termed “horizontal” and “vertical.” Horizontal controversies involve private parties who have different aspirations regarding a joint parenthood project (e.g., between two partners who began an IVF procedure and later disagree whether to complete the process). In contrast, vertical controversies concern clashes between an individual (or individuals) and the state, such as when the state or one of its authorities does not allow the individual to move forward with technologies that may lead to parenthood (e.g., new surrogacy procedures), though all affected individuals consent. The essay then focuses on horizontal litigation, and examines the ways in which various legal systems draw on, and sometimes adjust to the particular circumstances of the case, traditional concepts such as contract, reliance, property, and more to resolve such disputes

The path-dependent problem of exporting the rule of law

This article examines three indicators of a functioning rule of law state. First, that the executive operates through legally constituted channels: that administrative and political actions are constrained and channelled through legal authority. Second, that trial processes are robust: being genuine attempts to decide according to proof and law, rather than returning decisions that it is hoped will placate the powerful. Third, that no individual entities, be they corporations or individuals, be they economically or politically or militarily powerful, are able to act outside the reach of legal remedy. The work of D. C. North helps in understanding how the failure to implement or reform law successfully is predictable if the relevant features of the society that receives legal transplant or legal reform efforts are ignored. Ultimately, reform must involve domestic agents in its design and implementation because their knowledge of the subjunctive worlds of their own societies is a vital component in the reform process

Promotion of Self-employment: Manager Justifications for Online Labor Platform Operations

The emergence of online labor platforms (OLPs) has raised concerns about the treatment of platform workers and the legality of OLPs’ contractual relations and control. This study examines how managers (CEOs/founders) justify OLPs’ contractual relations and market control within the frames of critical platform work discussions and the Finnish labor market model. By using justification theory and market control classification as analytical tools, this qualitative study reveals that managers justify OLPs’ control and contractual relations by referring to critical discussions and features of Finnish labor market model. In justifications, managers either adopt the normative features of the model or criticize the societal neglect of self-employed workers. The model’s emphasis on full-time employment and legal questions around the platform economy seems to challenge the legitimacy of all OLP companies on some level. Despite OLPs’ operational differences, all managers justify OLPs with the idea of promoting self-employment within the Finnishlabor market