Regulatory Effectiveness in Onshore & Offshore Financial Centers
Onshore jurisdictions, such as the United States, United Kingdom, France and Germany, are critical of offshore financial centers (OFCs), such as Bermuda, the Cayman Islands, and the Channel Islands. Arguments against OFCs include claims that their regulatory oversight is lax, allowing fraud and criminal activity. In this article, we present cross-jurisdictional data, showing that OFCs are not lax. We also provide qualitative analyses of regulatory effectiveness, demonstrating that input-based measures of regulation are inappropriate metrics for comparing jurisdictions. Based on both quantitative input measures and a qualitative assessment, we reject the onshore critique of OFCs as bastions of laxity.
Toward Common Sense and Common Ground? Reflections on the Shared Interests of Managers and Labor in a More Rational System of Corporate Governance
In this essay, Vice Chancellor Strine reflects on the common interests of those who manage and those who labor for American corporations. The first part of the essay examines aspects of the current corporate governance and economic environment that are putting management and labor under pressure. The concluding section of the essay identifies possible corporate governance initiatives that might - by better focusing stockholder activism in particular and corporate governance more generally on long-term, rather than short-term, corporate performance - generate a more rational system of accountability, that focuses on the durable creation by corporations of wealth through fundamentally sound, long-term business plans.
Against Preemption: How Federalism Can Improve the National Legislative Process
How easily should courts infer that federal statutes preempt state law? An ongoing debate exists on the question in Congress and among scholars and judges. One side calls for judges to protect federalism by adopting a rule of statutory construction that would bar preemption absent a clear statement of preemptive intent. Opponents argue against such a "clear statement" rule by arguing that state control over preemptable topics is often presumptively inefficient, because common-law juries lack expertise and because states are prone to imposing external costs on their neighbors. This article sidesteps these debates over preemption and instead argues that, quite apart from whether state law is itself efficient, an anti-preemption rule of statutory construction has benefits for the national law-making process. Because of the size and heterogeneity of the population that it governs, Congress has institutional tendencies to avoid politically sensitive issues, deferring them to bureaucratic resolution, and instead concentrating on constituency service. Non-federal politicians can disrupt this tendency to ignore or suppress political controversy, by enacting state laws that regulate business interests, thus provoking those interests to seek federal legislation that will preempt the state legislation. In effect, state politicians place issues on Congress' agenda by enacting state legislation. Because business groups tend to have more consistent incentives to seek preemption than anti-preemption interests have to oppose preemption, controversial regulatory issues are more likely to end up on Congress' agenda if business groups bear the burden of seeking preemption. Moreover, the interests opposing preemption tend to use publicity rather than internal congressional procedures to promote their ends. Therefore, by adopting an anti-preemption rule of construction, the courts would tend to promote a more highly visible, vigorous style of public debate in Congress.