The simplification of planning legislation

This paper describes a proposal to extend the scope of planning permission in Great Britain so as to include virtually any works to listed buildings and scheduled monuments, demolition in a conservation area, and advertising. That would enable the scrapping of the separate statutory codes governing listed building consent, conservation area consent, scheduled monument consent, and consent under the Advertisements Regulations

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

Corporate Governance and Incentive Contracts: Historical Evidence from a Legal Reform

This paper proposes to exploit a reform in legal rules of corporate governance to identify contractual incentives from the correlation of executive pay and firm performance. In particular, we refer to a major shift in the legal and institutional environment, the reform of the German joint-stock companies act in 1884. We analyze a sample of executive pay for 46 firms for the years 1870 to 1911. In 1884, a law reform substantially enhanced corporate control, strengthened the monitoring incentives of shareholders, and reduced the discretionary power of executives in Germany. Pay-performance sensitivity decreased significantly after this reform. While executives received a bonus of about three to five per cent in profits before 1884, after the reform this parameter decreased to a profit share of about two per cent. At least the profit share that is eliminated by the reform must have been incentive pay before. This incentive mechanism was replaced by other elements of corporate governance.pay-performance sensitivity, natural experiment, legal reform, corporate governance

Economics and Politics of Alternative Institutional Reforms

We compare the economic consequences and political feasibility of reforms aimed at reducing barriers to entry (deregulation) and improving contractual enforcement (legal reform). Deregulation fosters entry, thereby increasing the number of firms (entrepreneurship) and the average quality of management (meritocracy). Legal reform also reduces financial constraints on entry, but in addition it facilitates transfers of control of incumbent firms, from untalented to talented managers. Since when incumbent firms are better run entry by new firms is less profitable, in general equilibrium legal reform may improve meritocracy at the expense of entrepreneurship. As a result, legal reform encounters less political opposition than deregulation, as it preserves incumbents' rents, while at the same time allowing the less efficient among them to transfer control and capture (part of) the resulting efficiency gains. Using this insight, we show that there may be dynamic complementarities in the reform path, whereby reformers can skillfully use legal reform in the short run to create a constituency supporting future deregulations. Generally speaking, our model suggests that "Coasian" reforms improving the scope of private contracting are likely to mobilize greater political support because — rather than undermining the rents of incumbents — they allow for an endogenous compensation of losers. Some preliminary empirical evidence supports the view that the market for control of incumbent firms plays an important role in an industry's response to legal reform.financial economics, deregulation, meritocracy

Economics and Politics of Alternative Institutional Reforms

We compare the economic consequences and political feasibility of reforms aimed at reducing barriers to entry (deregulation) and improving contractual enforcement (legal reform). Deregulation fosters entry, thereby increasing the number of firms (entrepreneurship) and the average quality of management (meritocracy). Legal reform also reduces financial constraints on entry, but in addition it facilitates transfers of control of incumbent firms, from untalented to talented managers. Since when incumbent firms are better run entry by new firms is less profitable, in general equilibrium legal reform may improve meritocracy at the expense of entrepreneurship. As a result, legal reform encounters less political opposition than deregulation, as it preserves incumbents' rents, while at the same time allowing the less efficient among them to transfer control and capture (part of) the resulting efficiency gains. Using this insight, we show that there may be dynamic complementarities in the reform path, whereby reformers can skillfully use legal reform in the short run to create a constituency supporting future deregulations. Generally speaking, our model suggests that "Coasian" reforms improving the scope of private contracting are likely to mobilize greater political support because -- rather than undermining the rents of incumbents -- they allow for an endogenous compensation of losers. Some preliminary empirical evidence supports the view that the market for control of incumbent firms plays an important role in an industry's response to legal reform.

THE POLITICS OF LEGAL REFORM

As a result of the emerging market crises of the last decade and a large body of academic research on the influence of investor protection in the development of capital markets and economic growth, there is a growing consensus that reforming the legal infrastructure supporting business should be an important component of reforms in many developing countries. But the consensus is unwieldy, as there are still many forces against reform and little agreement about what constitutes feasible legal reforms. This paper has two parts. In the first, we identify the forces for and against legal reform and review the role these forces play in episodes of reform. In the second, we seek to further our understanding of what constitutes good laws and regulatory mechanisms, and more importantly how to make them enforceable in different countries. If legal reform is to succeed, the commonly advocated principles of corporate governance in the international community must be brought down to the local political and judicial realities. Translating international corporate governance initiatives into clear and enforceable rights for creditors and shareholders that incorporate these constraints will be difficult but necessary. Bankruptcy law and corporate law reform need to be politically feasible and enforceable. Legal reforms should be complemented with carefully drafted judicial reforms, as well as market-based mechanisms that foster a culture of corporate governance.

“North of the border and across the channel”: Custodial legal assistance reforms in Scotland and France

Copyright @ 2013 Sweet & MaxwellThis article contrasts the Scottish reform of custodial legal assistance introduced subsequent to the Supreme Court’s decision in Cadder with similar developments in France. It offers a comparative viewpoint for the analysis of criticism directed at Cadder and opens up vistas of possibility for the consideration of further reform. The article also invites reflection on the significance of the developments in Scotland and France for custodial legal assistance in England and Wale

The reform of Legal Aid in England and Wales

Legal aid expenditure has risen dramatically in recent years, prompting attention from successive governments. A prominent theme of past and present government reform proposals has been the shifting of risk away from the taxpayer towards lawyers, clients and insurers by altering the means by which legal aid lawyers are paid. This paper explores this theme by presenting information on legal aid expenditure trends over the last two decades and then considering whether payment mechanisms have contributed to this performance. Finally, it reviews previous and current reform proposals in this area. It concludes that, because risk-shifting also alters incentives, it is essential that reform recognises and monitors these.

A Corporate Governance Reform as a Natural Experiment for Incentive Contracts

The present paper proposes to employ a major shift in the legal and institutional environment to identify contractual incentives from the correlation of executive pay and firm performance. We use the reform of the German stock companies act in 1884 as such a major shift and estimate the sensitivity of the pay to firm performance between 1870 and 1910 for executives of nine large banks. The reform substantially enhanced corporate control and strengthened monitoring incentives. Accordingly, we find the pay-performance sensitivity to decrease significantly after the reform. While executives received a bonus of 39 M per 1000 M increase in profits before 1884, after the reform the sensitivity decreased by two-thirds.pay-performance sensitivity, natural experiment, legal reform, corporate governance

The Legal Needs of Local Media Reform Organizations: Report of a National Survey

This report summarizes a nationwide survey of media reform groups to gauge their needs for pro bono legal assistance. Conclusions are that local media democracy groups need legal help on multiple issues, ranging from municipal broadband to cable franchising to low-power radio