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Countries pursuing economic development confront a fundamental obstacle. Reforms that increase the size of the overall pie are blocked by powerful interests that are threatened by the growth-inducing changes. This problem is conspicuous in efforts to create effective capital markets to support economic development. Controlling owners and managers of established firms successfully oppose corporate governance…

Chapter 11 bars bankrupt debtors from immediately repaying their creditors, so that the bankrupt firm can reorganize without creditors’ cash demands shredding the bankrupt’s business. Not so for the bankrupt’s derivatives counterparties, who, unlike most other secured creditors, can seize and immediately liquidate collateral, readily net out gains and losses in their dealings with the bankrupt,…

Throughout the last century, land use regulation evolved into a system in which local governments would examine significant land use projects on an individualized basis and then impose conditions tailored to mitigate the adverse effects of those projects. Informal negotiations between local governments and developers often preceded approval of the projects. However, formal contracts were avoided, largely…

Unmarried lovers who conceive are strangers in the eyes of the law. If the woman terminates the pregnancy, the man owes her nothing. If she takes the pregnancy to term, the man’s obligation to support her is limited. The law reflects this lovers-as-strangers presumption by making a man’s obligation towards a woman with whom he conceives derivative of his…

The financial crisis of 2007-2009 left elite university endowments with 30% less value, causing these universities to respond with dramatic budgetary restructuring. While endowments had received probing national and congressional attention in the months prior to the crisis, that attention largely gave way to the conventional view that universities were no longer able to meet…