A Model-Law Approach to Restructuring Unsustainable Sovereign Debt

Unresolved sovereign debt problems are hurting debtor nations, their citizens and their creditors, and also can pose serious systemic threats to the international financial system. The existing contractual restructuring approach is insufficient to make sovereign debt sustainable. Although a more systematic legal resolution framework is needed, a formal multilateral approach, such as a treaty, is not currently politically viable. An informal model-law approach should be legally, politically and economically feasible. This informal approach would not require multilateral acceptance. Because most sovereign debt contracts are governed by either New York or English law, it would be sufficient if one or both of those jurisdictions enacted a proposed Sovereign Debt Restructuring Model Law as their domestic law

Cultivating compliance: governance of North Indian organic basmati smallholders in a global value chain

Focusing on a global value chain (GVC) for organic basmati rice, we study how farmers’ practices are governed through product and process standards, organic certification protocols, and contracts with buyer firms. We analyze how farmers’ entry into the GVC reconfigures their agencements (defined as heterogeneous arrangements of human and nonhuman agencies which are associated with each other). These reconfigurations entail the severance of some associations among procedural and material elements of the agencements and the formation of new associations, in order to produce cultivation practices that are accurately described by the GVC’s standards and protocols. Based on ethnography of two farmers in Uttarakhand, North India, we find that the same standards were enacted differently on the two farmers’ fields, producing variable degrees of (selective) compliance with the ‘official’ GVC standards. We argue that the disjuncture between the ‘official’ scripts of the standards and actual cultivation practices must be nurtured to allow farmers’ agencements to align their practices with local sociotechnical relations and farm ecology. Furthermore, we find that compliance and disjuncture were facilitated by many practices and associations that were officially ungoverned by the GVC

The Political Ecology of Takeovers: Thoughts On Harmonizing the European Corporate Governance Environment

Economic policy debate in the United States during the 1980s focused on the dynamics of bidder and target tactics in hostile takeovers. Confronted with the largest transactions in business history, financial economists took advantage of developments in econometric techniques to conduct virtually real time studies of the impact on firm value of each new bidder tactic and target defense. For courts and lawyers, hostile takeovers subjected standard features of corporate law to the equivalent of a stress x-ray, revealing previously undetected doctrinal cracks. Congress held seemingly endless hearings on the subject, although managing to enact only relatively innocuous tax penalties on particular defensive tactics the public found especially offensive. State legislatures, closer to the political action, acted more substantively, if less wisely. Whether or not takeovers created new wealth they did result in its transfer, and at least one of the parties from whom wealth was transferred – target management – had remarkable influence in state legislatures. When labor also came actively to oppose hostile takeovers, the coalition was virtually unstoppable. The decade saw some thirty-four states pass more than sixty-five major laws restricting corporate takeovers, including states discouraging partial offers and front-end loaded offers. The 1980s have now closed transactionally as well as chronologically. The first quarter of 1991 marked the lowest level of merger and acquisition activity since the first quarter of 1980. The passing of this remarkable decade invites a broader perspective, which can be helpfully thought of as the political ecology of takeovers. An ecological perspective builds on the proposition that phenomena are embedded in interactive systems – a rich web of mutually dependent relationships. Thus, a seemingly independent event cannot be fully evaluated without understanding how it relates to the environmental forces to which it was a response and which, in turn, respond to it. What the narrow focus of the 1980s debate missed was an appreciation of the complex economic corporate governance and political environments in which hostile takeovers are embedded. Corporate acquisitions are a response to real conditions in the economic environment. The choice among acquisition techniques, most importantly between friendly and hostile transactions, depends both upon the economic motivation for the transaction and upon conditions in the corporate governance environment. Finally, conditions in the corporate governance environment are directly influenced by politics; both what is allowed and prohibited is defined, in the first instance, by legislation. My goal in this article is two-fold. I begin by sketching the political ecology of takeovers in the United States – the interaction of economics, corporate governance and politics that shaped the experience of the 1980s. I then make a tentative effort at applying the insights gained from an ecological perspective to the current endeavor to change dramatically the European corporate governance environment through the harmonization of takeover and company law in the European Community. Sheltered by the cloak of political naivete commonly allowed those attempting comparative analysis from a distance, I will argue that an ecological understanding of takeovers suggests a different approach than that reflected so far in the debate over the terms of harmonization. This approach is based on what I term the mutability principle

Enterprise reform in China : the evolving legal framework

Enterprise reform in China since 1979 has been supported by accelerated reform of China's legal framework. In the transition to a"socialist market economy", state enterprises will operate independently of the government, may no longer be fully owned or controlled by the state, and will deal with the state and other legal entities through market based transactions. The number of collective (township and village) enterprises has grown rapidly, and in recent years so has the number of private enterprises. This level of economic change requires a commensurate level of legal change. The author describes the legal framework needed for enterprise reform in the world's most populous country. First,it is essential to define the enterprise and its rights and obligations. To define and broaden the autonomy of enterprises, enterprise law and regulations must be reformed. For state and collective enterprises, a goal of legal reform is also to effect the separation of ownership and management. To create a legal environment in which all enterprises - including state enterprises -participate as independent actors, reform is also needed in the following areas. Bankruptcy and competition law, to promote fair effective competition among autonomous enterprises and to ensure the continued protection of the public interest even without direct state management of enterprises. Financial laws, including securities laws and regulations, so enterprise financing can take place in a market driven system rather than through a planning mechanism. Laws governing land use, mortgage financing, and pension and social security systems, to separate employee housing and pension and social security systems from enterprise obligation and henceforth to provide housing pensions, and social security through alternative means. Contract law, to protect the legal rights of enterprises and allow economic transactions between parties to replace administrative controls, and to ensure that the court system and dispute resolution processes function credibly and reliably, thereby making all other reforms enforceable. To make these reforms meaningful, property rights must also be better defined. China's civil code currently offers only a limited definition of the rights of ownership and of an enterprise's rights to sell, transfer, or otherwise dispose of property. The author catalogs these pieces of the legal framework, suggesting where further reform is needed to support enterprise reform; focuses on the reform of state enterprises but also discusses the reform of nonstate enterprises; and touches only lightly on the role of foreign investment but does address the developing framework of patent, trademark, and copyright laws,National Governance,Legal Products,Private Participation in Infrastructure,Legal Institutions of the Market Economy,Judicial System Reform

Sovereign Debt Restructuring: A Model-Law Approach

The existing contractual framework for sovereign debt restructuring is sorely inadequate. Whether or not their fault, nations sometimes take on debt burdens that become unsustainable. Until resolved, the resulting sovereign debt problem hurts not only those nations (such as Greece) but also their citizens, their creditors, and—by posing serious systemic risks to the international financial system—the wider economic community. The existing contractual framework functions poorly to resolve the problem because it often leaves little alternative between a sovereign debt bailout, which is costly and creates moral hazard, and a default, which raises the specter of systemic financial contagion. Most observers therefore want to strengthen the legal framework for resolving sovereign debt problems. International organizations, including the United Nations, have been contemplating strengthening that framework through treaties. The political economy of treaty-making, however, makes that approach highly unlikely to succeed in the near future. This article argues, in contrast, that a model-law approach should not only strengthen that legal framework but also should be politically and economically feasible. Model laws have long been used in cross-border lawmaking, but they are different than treaties. Unlike a treaty, a model law would not require general acceptance for its implementation. Only one or two jurisdictions, for example, need enact the text of this article’s proposed model law for it to become widely effective. Once that occurs, a debtor-state whose debt contracts are governed by those jurisdictions’ laws, or by its own laws, could restructure that debt without needing to amend any of those contracts. A model-law approach should also be desirable. This article’s model law, for example, would reduce uncertainty and should also achieve significant cost advantages—both to debtor-states and to their creditors—over the sovereign-debt-restructuring status quo. Because it would require only a ministerial supervisory process, the model law would not interfere with the exercise of a sovereign’s political discretion. Moreover, the model law provides incentives to motivate fair bargaining on behalf of debtor-states and their creditors, while restricting rent-seeking holdouts. It also enables the type of interim funding of day-to-day debts that a debtor-state needs during its debt restructuring. Debtor-states should therefore want (and creditors, other than rent-seeking holdouts, should want them) to enact into law this article’s proposed model-law text. Regardless of whether that enactment occurs, however, the article should serve its underlying purpose: to provide a conceptual and legal analysis of how a model law could be structured and how a model-law approach could be used to solve the problem of unsustainable sovereign debt burdens, and to help develop the norms required to facilitate those goals

A survey of Viet Nam's legal framework in transition

Viet Nam is trying to preserve its sociopolitical system while moving gradually toward a different economic system, recognizing that law is a valuable instrument for effecting orderly change. It has begun to enact the laws and decrees needed in such areas as company law, contract law, banking law, and, especially, laws on foreign investment. Further progress toward a market system will require more legislative activity. The author highlights four areas of special priority. Thoroughly implementing the new land law, by issuing detailed regulations to"marketize"the leasehold system, clarify land-use rights in liquidating state enterprises or making them corporations, and establish a firm basis for mortgage financing. Deepening state enterprise reform through a new legal framework for state enterprises, to be established under a revised company law, to permit state enterprises to operate under the same framework as nonstate enterprises. This should be accompanied by a new state management of its shares in enterprises. Revising the framework of company law and foreign investment law to implement and expand pilot corporatizations. Finalizing the civil code and commercial law to provide rules of the game for everyday business transaction and for resolution of the disputes that will inevitably result from them. Other areas less far-reaching in impact but important for market development include regulations to implement bankruptcy law, competition law, and securities law. In addition, the author notes the need to guard against separate legal regimes for state enterprises, nonstate enterprises, and foreign-investment enterprises, as this would interfere with efficient competition among enterprises with different ownership structures. It is also important to coordinate foreign legal traditions and preferences, especially in such areas as dispute resolution.National Governance,Legal Products,Banks&Banking Reform,Environmental Economics&Policies,Legal Institutions of the Market Economy

WP3 Policy Mapping, Review and Analysis

This report presents the mapping, review and analysis of the most relevant LLL policies for young adults in Glasgow City Region and Aberdeen/ Aberdeenshire. The report first reviews the national Scottish LLL policies which influence the implementation of LLL for young adults in the two regions under study. This report provides findings and analysis to comply with the H2020 YOUNG_ADULLLT Research Project, Work Package 3 (WP3). We have used the requirements and guidance in the WP3 proposal to select two appropriate Functional Regions (FRs): The Glasgow City Region and Aberdeen/Aberdeenshire. These FRs provide a focus for the WP3 mapping but also frame the other data gathering for the YOUNG_ADULLLT project. The mapping has provided material to facilitate an understanding of the policy landscape, including the different policy sectors of the two FRs set in the national context. The mapping required the selection of three detailed examples of LLL/Skills policies with their associated material actions in each of the two FRs. Currently, we have mapped four in each FR. Our mapping reflects the distinctiveness of Scottish public policy in that national policies provide the main framework for regional and locally devolved enactment and associated actions

Implications of EU public procurement law on water service governance: the case of Italy

EU public procurement law identifies competitive tendering as the primary instrument for the selection of operators in the water sector. However, the merits of competition for the market are highly contested in the literature and theoretical debate. This paper looks at empirical evidence from Italy and assesses the implications of competitive tendering on “good governance”, with particular reference to efficiency, transparency and accountability. We draw on the policy networks tradition to capture the interdependency of actors’ interests, actors’ resources and applicable rules. Our analytical framework allows us to identify the structural limitations of competitive tendering and the associated regulation by contract. More precisely, we observe the combined effect of resource allocation (in terms of asymmetry of knowledge and power) and the nature of the applicable rules (e.g. ex-ante regulation and long term contracts). This allows for interest-seeking behaviour during both the tendering procedure and the execution of the contract. In turn, opportunistic behaviour undermines the achievement of both governance and reform objectives. Finally, we posit that introducing stronger transparency, accountability and participatory mechanisms would align actors’ interests to intended reform objectives. We put forward the following hypothesis for further empirical testing. The strengthening of governance requires the creation of opportunities for: a) involving civil society in decision making and the monitoring of operations; b) investing in the knowledge of actors participating in decision making and monitoring; c) sanctioning behaviour unaligned with reform objectives through simple and effective rules

Risk Governance and Deliberative Democracy in Health Care

I argue in this article that the concept of risk-centered governance is the best theoretical paradigm for understanding health law and the health care system. Over the past 20 years, an insurance-inflected discourse has migrated from the purely financial side of the health system into the heart of traditional medicine - the doctor-patient relationship. Rather than focus on doctrinal strands, I argue that scholars should analyze the law of health care as a set of governance practices organized around managing and allocating financial, as well as clinical, risk. Over the same period, the body of law that structures most private group health insurance - ERISA - has effectively delegated control of risk pooling and resource allocation to the employers that sponsor group plans. Drawing on a history of ERISA that has not been explored in legal scholarship, I demonstrate how the private welfare state of workplace-based health insurance has evolved into the creation of what amounts to corporate sovereignty in controlling access to health coverage. The discourse of managing risk bonds these two components of health law and the health care system: patient care and access to coverage. From a normative perspective, the greatest problem with risk-centered governance arises from a democracy deficit. Because almost all health insurance risk pools are based in workplaces, there is potential to draw on the social networks created by work as a mechanism for building new, localized publics engaged with health policy. Treating insurance risk pools as potential mechanisms of governance, rather than merely as actuarial units, would force the publicizing (at least within the workplace) of myriad political decisions: who gets included and excluded in the pooling process, how allocation decisions are made, and whether there are systems of accountability and checks and balances sufficient to produce a risk allocation system that is equitable, as well as efficient and flexible. The article builds on the egalitarian potential of social insurance as a technology of governance, and argues for filling a gap that exists not only in the current system, but also in all proposals for reform