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  An Economic Analysis of Conflict of Interest Regulation

  Jonathan R. Macey and Geoffrey P. Miller

  A superficial application of economic principles might suggest that ethics rules are likely to be uniformly inefficient. For the most part, these rules are promulgated by the organized bar without substantial input from other interests. In particular, clients (other than large organizations with in-house attorneys) are not strongly represented in the councils which formulate bar rules. One might argue, therefore, that ethics rules represent a naked exercise of guild power, serving the interests of lawyers at the expense of clients or the general public. But this would be an oversimplification. The organized bar, which has principal responsibility for drafting the rules of legal ethics, can enhance its profits in at least two ways: first, by limiting the supply of legal services available in the marketplace (mainly by restricting entry into the practice of law); and second, by adopting economically efficient rules that reduce costs (in part, by lowering the contracting costs between lawyers and clients). Either a reduction in costs or a decrease in supply will increase the profitability of legal services, and by engaging in both techniques simultaneously, the bar can enhance profits still more and do so over the long run. The efficiency implications of the supply-restricting and cost-reducing strategies utilized by the organized bar are complex and require careful case-by-case analysis. As a broad generalization, however, it would appear that while supply-reducing rules are likely to be inefficient on balance (because the welfare loss associated with the reduction in supply is greater than the welfare benefit that might be achieved by providing quality assurance), cost-reducing rules are likely, in many cases, to be efficient (because the bar’s interest in reducing the cost of providing legal services aligns well with the public’s interest in efficient contracting). Thus, while some ethics rules can indeed be understood as serving the interest of the organized bar at the expense of social wealth, other rules, arguably, can be justified on economic grounds. Efficient ethics rules are those that reduce contracting costs between lawyers and their clients by supplying reasonable terms to which lawyer and client would agree, in most cases, it they were able to bargain over the issue. The codes of professional responsibility, in other words, contain a number of “gap-filling” or “default” rules that supply terms to an attorney-client contract. Among the most important of such rules are those related to conflicts of interest. In part, our purpose is to identify an efficiency rationale for certain rules that have heretofore generally been analyzed from other, principally moral and ethical, perspectives. We believe that economic analysis can provide a satisfactory and coherent explanation for the structure of rules that we observe in the legal ethics area. Through the economic lens the rules in question can be seen as supplying reasonable implied terms to the attorney-client contract in an environment characterized by information asymmetries, agency costs, dangers of ex post opportunism, and associated costs of monitory and enforcement. A second purpose of this paper is to suggest an economic framework for interpreting the gap-filling rules in cases of ambiguity. Once the economic function of these gap-filling rules is clarified, they can be interpreted in a fashion that is likely to enhance the efficiency of the provision of legal services. Efficiency-based interpretations turn out to be generally consistent with reasonable moral intuition, but they are, in some cases, at variance with the constructions that courts or commentators have adopted. Thus, economic analysis of the gap-filling rules of attorney ethics may provide guidance for the interpretation of the rules of legal ethics in hard cases.

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  Parental Bonding and the Design of Child Support Obligations

  Geoffrey P. Miller

  To what extent, in awarding child support, should courts take account of the level of the non-custodial parent’s visitation? Possible options range from taking no account of visitation in setting support obligations, to including visitation as part of the basic support calculation. If the latter option were chosen, non-custodial parents who commit to a strong and continuing interaction with their children, as measured by days of visitation, could receive a credit against their child support obligations. Non-custodial parents who were not willing to undertake to be actively present in their children’s lives could pay a surcharge over the support that would otherwise be awarded. California—long a leader in family law innovations—already requires courts to adjust child support awards based on the amount of time each parent spends with the children. This chapter analyses the pros and cons of the California approach.

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  Waiting for the Omelet to Set: Match-Specific Assets and Minority Oppression in the Close Corporation

  Edward B. Rock and Michael L. Wachter

  This chapter focuses on the persistent features of the close corporation that serve to protect participants from the misconduct by fellow participants. It shows that where there is an intensity of match-specific assets in which all participants invest, the close corporation is best served by rules that lock-in the majority and minority participants by giving them a limited right to dissociate. This view is more in line with the experiences of high-tech start ups where a rule against opportunistic exit serves to protect the initial investments of human and physical capital made by the participants in the development stage.

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  Market Definition with Differentiated Products: The Post-Nabisco Cereal Merger

  Daniel L. Rubinfeld

  Antitrust litigation has come to rely to a greater and greater extent on empirical methods. While the range of applications is quite broad, it is not unusual to observe multiple regression and other statistical methods being utilized in defining relevant markets and in predicting the price increases that may result from the strategic decisions of the merging firms. With respect to market definition, it is essential for the fact finder to assess buyer substitution patterns as effectively as possible. Historically, most of the relevant substitution evidence has come from indirect indicators related to seller practices-marketing studies and the like. Increasingly, however, econometric methods have been used to supplement these indicators, often with determinative outcomes. State of New York v. Kraft GeneralFoods, Inc. is a prime example; Kraft was a fully litigated merger in which econometric methods played an important role. The court was presented with both direct and indirect evidence of the responses of buyers to changing prices, and econometrics made much of it possible. There are important demand- and supply-side explanations for the rapid growth of empirical methods. On the supply side, the rapid improvement in computing technology has made empirical methodologies feasible and economical. Accordingly, the enforcement agencies and economic and marketing experts in the private sector now make frequent use of supermarket scanner data available commercially from two firms, Nielsen and Information Resources, Inc. (IRI). Coincident with the improved technology has been the development of a number of empirical methods that have been utilized with some success by industrial organization economists. On the demand side, judicial interest in using statistical methods also has been growing rapidly. Courts are finding, to a greater and greater degree, that reliable statistical evidence can be invaluable in deciding questions of impact, harm, and damages in a range of cases, including antitrust. Accordingly, the Federal Judicial Center's Reference Manual on Scientific Evidence contains a chapter on statistics and a chapter on multiple regression. In this essay I use the Kraft case as a springboard for a discussion of the increasing importance of empirical methods in merger analysis. In doing so, I emphasize, but do not restrict myself to comments relating to market definition. While there is little debate about the importance of the Department of Justice and Federal Trade Commission Horizontal Merger Guidelines in merger cases, there are nagging questions about the role of empirical methods when mergers involve highly differentiated products. I will suggest in this essay that market definition should play a significant role in the analysis of competitive effects of mergers, but that the Guidelines are difficult to apply when products are highly differentiated. Furthermore, I believe that market definition should play a more limited role when the focus of the merger analysis involves unilateral effects. Kraft General Foods, Inc., which owns Post cereals, entered into an agreement to buy the ready-to-eat (RTE) cereal assets of Nabisco on November 12, 1992. The acquisition was completed on January 4, 1993, without a second request by the FTC. However, on Feb. 10, 1993, five weeks after the acquisition had been completed, the New York State Attorney General sued, seeking to have the Nabisco assets divested or the merger rescinded. After a three-week trial, Judge Kimba Wood of the U.S. District Court, Southern District of New York, ruled in favor of the defendant, and the State of New York opted not to appeal the verdict. During the trial there was extensive testimony relating to market definition, coordinated effects, and unilateral effects by the State's economic expert, Ronald Cotterill, by Kraft's economic expert, myself, and by the court-appointed economic expert, Alfred Kahn. My role as defense expert carries with it the advantage of seeing the issues from the inside as a participant, and the disadvantage that one's perspective is inevitably affected by one's own position. Because my goal is to highlight methodological issues, and not to reargue the merits of the case, I am hopeful that the advantages will outweigh any disadvantages.

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  Projects, Relationships, and Reasons

  Samuel Scheffler

  The relation between values and reasons has been the subject of much discussion in recent moral philosophy, but few people have explored the topic with as much insight and sensitivity as Joseph Raz. In this essay, I will discuss one aspect of what Raz calls ‘the value–reason nexus’: namely, the relation between valuing certain kinds of things and the recognition of reasons for action. Elsewhere I have argued that to value one’s relationship to another person non-instrumentally just is, in part, to be disposed to treat that person’s needs, interests, and desires as providing one with reasons for action, reasons that one would not have had in the absence of the relationship. This is part of what valuing a relationship non- instrumentally involves. In this essay, I want to extend the argument from interpersonal relationships to personal projects. I will argue that, just as valuing one’s relationships non-instrumentally involves seeing oneself as having what I will call relationship-dependent reasons, so too valuing one’s projects non-instrumentally involves seeing oneself as having project-dependent reasons. I take this argument to support Raz’s claim that a focus on the ‘value–reason nexus’ not only does not support a maximizing conception either of ethics or of practical reason, but in fact has significant anti maximizing implications. I also agree with Raz when he holds, in effect, that both relationship-dependent and project-dependent reasons embody forms of legitimate partiality, but that neither is incompatible with any reasonable understanding of the universality of ethics or value. However, there is also one important asymmetry between relationship-dependent reasons and project-dependent reasons, and I will argue that Raz’s formulations are not helpful in explaining this asymmetry.

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  Comment

  Deborah H. Schenk

  Chapter 9 makes an important contribution, both in urging that simplification proposals be subjected to quantitative analysis and in attempting to do so. Equally important is the assumption underlying their work: that the distributional and efficiency impact should be analyzed and weighed in evaluating simplification proposals, just as it is with any other tax reform proposal. The authors correctly point out that these reform efforts usually are supported or evaluated only on simplification grounds, with little regard to their distributional or efficiency effects. This failure is an aspect of the familiar second-best problem that attends all tax system reform (as contrasted to tax system design). Changes that in the abstract might be efficient, for example, may decrease efficiency in a second-best world. That is no less true of simplification proposals than it is of any other type of reform.

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  No Checks, No Balances: Discarding Bedrock Constitutional Principles

  Stephen J. Schulhofer

  IAs expected, September 11 has prompted an expansion of law enforcement powers at almost every level. The domain of individual rights has contracted. And who would have it otherwise? For those of us who live and work in Manhattan, September 11 was not just a single horrific day but an extended nightmare. For weeks, kiosks, store windows, and parks displayed flyers by the thousands, pleading for information about loved ones still missing. National Guard units seemed to be everywhere. Day after day, the air, gray and acrid, carried the smell of burning flesh. No, the “war” metaphor is not just convenient political spin. And despite shameless hyping of so-called sleeper cells and color-coded threat levels, no responsible person can dismiss the danger of devastating future attacks. Actions to strengthen law enforcement are not simply the product of panic or paranoia. But the particulars are troubling—and worse. Predictably, there has been overreaction and political grandstanding. More surprising is the neglect. Inexcusably, the administration of George W. Bush has swept aside urgent security needs while it continues to win public acclaim for toughness by targeting and scapegoating civil liberties. An accounting of the state of our liberties should begin with the positives. To his credit, President Bush has preached tolerance and respect for our Muslim neighbors. Unlike previous wartime governments, this administration has not sought to prosecute dissenters for political speech, has not attempted anything comparable to the internment of Japanese Americans during World War II, and (technically, at least) has not tried to suspend the writ of habeas corpus. But to measure performance by these standards is to set the bar terribly low; these were sorry historical embarrassments. And 9/11 has already produced several comparable missteps. The administration's efforts to stymie habeas corpus rival the civil liberties low points of prior wars, as does its determination (wholly without precedent) to hold American citizens indefinitely on disputed charges without affording them a trial in any forum whatsoever. Likewise without precedent are the oddly imbalanced means chosen to fight this war. Never before in American history has an administration claimed emergency powers while stinting on urgent national security expenditures and making tax cuts its top wartime priority. Conventional wisdom about “striking a balance” between liberty and security obscures the fact that responses to 9/11 are deeply flawed from both perspectives. Specifically, the domestic security policies of this administration encroach on three principles that are fundamental to the preservation of freedom: accountability, checks and balances, and narrow tailoring of government's power to intrude into the lives of citizens. In each case, the administration has overlooked or dismissed alternative approaches that would strengthen the nation's security at least as effectively without weakening fundamental freedoms. The encroachments on bedrock principles, altogether unnecessary even in this perilous time, are especially evident in four realms of policy: domestic surveillance, new guidelines governing the Federal Bureau of Investigation, the detention of foreign nationals, and the erosion of habeas corpus.

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  A Proposed Lis Pendens Rule for Courts in the United States: The International Judgments Project of the American Law Institute

  Linda J. Silberman

  Like all of us writing in this festschrift for PETER NYGH, I had anticipated a joyous event in honor of the great legal and academic career of PETER NYGH. With PETER’s untimely death, the occasion is a different one, but one that has left us with even a clearer sense of the wonderful and unique contributions made by PETER. PETER’s understanding of both common and civil law traditions placed him in a position to suggest ways of bridging those different systems with creative international solutions. My own professional associations with PETER included service on our respective countries’ delegations (PETER, for Australia, me for the United States) on the Hague Special Commission that negotiated the 1996 Convention on the Protection of Children and on various Hague Special Commission meetings to review the Operation of the Hague International Child Abduction Convention. And although I was not a member of the U.S. delegation to the Hague Special Commission to negotiate an international jurisdiction and judgments Convention, in my role as Co-Reporter (with Professor Andreas Lowenfeld) on the American Law Institute’s International Jurisdiction and Judgments Project I was in close contact with the formal negotiators at The Hague, including Peter, and was kept abreast of those developments. While it now appears that a comprehensive international treaty on Jurisdiction and Judgments will not proceed at The Hague, PETER would be quite proud of the influence his work (along with co-rapporteur Fausto Pocar) has had and continues to have. There is optimism that the efforts to develop a more limited choice of court convention will go ahead at the Hague Conference; and such a treaty might serve as a first step to a more ambitious project in the future. And as I have written elsewhere, “one should not lose sight of the important lessons that have been learned from the experience and the insights gained in attempting to understand the wide gap that separates common law and civil law approaches [to issues of international jurisdiction and judgments].” A little closer to home, the Hague effort to negotiate a broad convention on jurisdiction and judgments with provisions for forum non conveniens and lis pendens has been a catalyst for a current project of the American Law Institute on enforcement of foreign judgments. Aspects of that project also represent a legacy from PETER NYGH. My tribute to PETER is divided into three sections: (1) a brief background for and description of the American Law Institute project (2) an account of how U.S. law presently deals with parallel proceedings in transnational litigation and (3) a discussion of the innovative lis pendens provision that appears in the ALI Tentative Draft—which takes inspiration from the lis pendens provision in the proposed Hague Convention Draft that itself reflects the influence of PETER NYGH.

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  Close to Death: Reflections on Race and Capital Punishment in America

  Bryan A. Stevenson

  Even before I began representing people on death row, I was opposed to capital punishment. The logic of gratuitously killing someone to demonstrate that killing is wrong eluded me. We don’t rape those who rape, nor do we assault those who have assaulted. We disavow torturing those who have tortured. Yet we endorse killing those who have killed. The death penalty has always seemed to me to be a punishment rooted in hopelessness and anger. My own moral and religious background caused me to believe that each of us is more than the worst thing we’ve ever done. No one is just a crime. Punishment must be constrained by basic human rights. I also recognized before I became a lawyer that the criminal justice system was replete with arbitrary and unfair decision making, particularly for the poor and people of color. In the almost two decades that I have been working as an attorney for condemned prisoners, I have developed a far more direct and personal understanding of the degree to which this country’s capital punishment system is riddled with flaws and tainted with injustice. I have represented dozens of death row prisoners, most of whom were unconstitutionally convicted and unfairly sentenced to death. I’ve defended men, women, and children accused of capital crimes and had to confront the intense anger and complex issues these cases present. I have sat with scores of people who have been victimized by violence and death: family members of murder victims who have lost loved ones to crime, the mothers, fathers, sons, and daughters of executed prisoners, and an increasing number of decision makers who have become disillusioned by the process of state governments executing human beings. I have come to believe that whatever one’s views of the death penalty in the abstract, reasonable people of goodwill, if armed with the facts about how the death penalty is actually administered in this country, ought to conclude that the death penalty should be abolished. Criminal justice policy has been incident driven in the United States for many years. Crimes, sensationalized by the media, have resulted in policies that are uninformed by analysis and research. Policy makers have defended ill-conceived and irrational sentencing schemes by invoking public support for tougher sentences. The broader, long-term implications of these policy choices are rarely considered. This approach to sentencing has made the death penalty immune to rational analysis and discourse. Most supporters of capital punishment are not affected by its implementation in any practical way. They do not perceive the death penalty as a threat to their taxes or their pocketbooks, which results in a costless assessment of its value. When executions are impersonal and unexamined, Americans are free to consider capital punishment in a disembodied manner in which death-sentenced prisoners are stereotyped villains with no discernible humanity. Unless something sensational or atypical occurs, the condemned are executed out of sight with little attention and ever diminishing legal scrutiny. The family members of homicide victims are expected to perform a public role as active players in the prosecution and the implementation of punishment. Public policy and state punishment of an offender become a personal issue featuring the private tragedy of a particular victim, whose story is more or less important depending on the victim’s wealth, status, race, class, or “newsworthiness.” It is in this context that the death penalty has taken shape in America and become a defining feature of criminal justice in the United States. However, in recent years, media accounts of exonerations of death row inmates and reports about the unreliability of the capital punishment system have begun to bring some of the realities of the death penalty to the public consciousness. There is evidence that this new information is beginning to transform the public’s and decision makers’ views about the death penalty. In the last several years, dozens of innocent people have been released from death row after narrowly escaping execution. For every eight executions that have occurred in the United States since resumption of capital punishment in the 1970s, one innocent person has been discovered on death row and exonerated. The shockingly high error rate has prompted a retreat from the death penalty in some circles, even wholesale commutation of every death sentence by the governor of Illinois. But, perhaps inevitably, the national debate continues to focus on abstract concepts: Personal tragedies of unjustly condemned individuals are transformed into empirical data, which are then subjected to debates about the generalizability of the samples and the reliability of the survey techniques. Although such scrutiny of scientific method is self-evidently appropriate and valuable, what is often lost in the process are the vivid, personal narratives that can provide a crucial context for public understanding of the actual workings of the capital punishment system. The reality is that capital punishment in America is a lottery. It is a punishment that is shaped by the constraints of poverty, race, geography, and local politics. It is a punishment that has become notorious for its unreliability and unfairness. The death penalty in the United States has increasingly come to symbolize a disturbing tolerance for error and injustice that has undermined the integrity of criminal justice administration and America’s commitment to human rights. In this chapter, I describe the cases of some of the people I have represented and discuss what these cases reveal about capital punishment in America. I speak in particular about the influence of conscious and unconscious racial bias in the administration of the death penalty. I discuss some of my experiences in Alabama, the state in which I have represented many condemned prisoners and capital defendants. However, I draw on national studies to show that the problems I have witnessed are representative of the situation in other death penalty states as well. I begin with the case of Walter McMillian, which illustrates how the actions of the police, prosecutors, the bench, and a jury selected in a racially discriminatory manner can combine to produce a capital murder conviction and sentence of death for a person who was innocent.

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  The Illusory Promise of the Rule of Law

  Frank K. Upham

  In this chapter I argue that the seemingly universal advocacy of the rule of law as an instrument for economic development is premised on a mistaken understanding of both law and its relationship to economic development. Rule of law advocates too often treat formal legal institutions as the only means by which developing societies may resolve disputes and regulate markets efficiently without the corruption and political intervention that have crippled economic growth in many parts of the developing world. In doing so, they fail to recognize that a successful legal system plays a deeply political role in its society and is dependent on particular political conditions to be effective. They assume that formal legal institutions are necessary elements for economic growth without realizing that there is little empirical evidence showing that such institutions and doctrines have contributed to economic growth in any way that can be generalized and applied to developing countries today. Mainstream legal reformers observe the fact that developed countries invariably have some form of the rule of law and inductively conclude that the rule of law must have contributed to development. It is more likely that an effective formal legal system is a desirable result of economic and political development, rather than its cause. Nonetheless, the rule of law retains a strong allure for those interested in development, both the aspiring countries and well-intentioned development “practitioners.” It is difficult to find anyone, whether in government, foundations, corporations, or universities, who does not favor encouraging the rule of law in virtually every country and society. The rule of law appeals to two powerful strains in contemporary intellectual and political thought. First, it speaks to the desire for universal truths in a global world. It simplifies complex realities by transforming social and political behavior into legal categories, and it promises to make mutually comprehensible the processes and practices of societies as different as those of Nigeria and Nebraska. Second, the rule of law appeals to our mistrust of politics and political action. It promises order without bureaucracy; governance without government; social choice without politics. Just as the invisible hand of the market produces wealth without intentional human agency, the black box of legal reasoning resolves social and economic disputes without moral judgment or political bias. In an age when politics and social engineering are reviled as wasteful and corrupt, the rule of law presents itself as the perfect complement for a free-market based view of development, offering to fix whatever problems the market fails to fix on its own. At times, it seems that any issue, no matter how far removed from what we normally think of as the province of law, can be addressed profitably via legal reforms. Within months after September 11, 2001, and weeks after America's entrance into Kabul, American observers were calling on the Bush administration to focus on the rule of law. The Baltimore Sun editorialized in April 2002 that “Establishing the rule of law... must be the first priority in Afghanistan. Enduring stability and security can only be achieved under a widely accepted and viable legal and regulatory framework.” Michael Ignatieff agreed, arguing in the New York Times that “helping the Afghans to rewrite the criminal and civil code and train a new generation of lawyers, prosecutors, and criminal investigators” was a necessary first step in Afghan reconstruction and a prerequisite to economic recovery. Raj Bhala, a law professor at George Washington University, argued that “There has to be a ‘rule of law’ culture in place” for reconstruction to succeed, and estimated that an effective legal system could be operational within three years. The idea that training judges or rewriting laws could significantly help reverse the legacies of twenty-five years of civil war, religious zealotry, and political disintegration in the same amount of time that it takes an American law student to become a lawyer is perhaps the most bizarre example of exaggerated hopes for the rule of law, but it is only one of many. Senator Joseph Biden, former chair of the Senate Foreign Relations Committee, has identified the failure of the Chinese to develop the rule of law as “the one thing” that could disrupt U.S.-Chinese relations, while the U.S. government, the Ford Foundation, and others have launched an expensive campaign to engender the rule of law in China. Similarly, a major part of America's effort to help sub-Saharan Africa has been the African Growth Opportunities Act of 2001 ('”AGOA”), which conditions trade liberalization for African exports on a showing that individual countries are establishing the rule of law. While examples are ubiquitous, the message remains the same: appropriate legal institutions have become a core component of any strategy to overcome the poverty, ethnic strife, corruption, economic decline, and political oppression that have plagued parts of the developing world for decades. Such a heavy reliance on legal reform to accomplish political and economic goals is not harmless or risk free. While it is easiest to attack the expense of hiring legal consultants, flying them to exotic locales, and housing them in the proverbial five star hotels, this is not where the real danger lies. Although this cost is not de minimus, neither is it huge in the overall scheme of foreign assistance, and many programs incrementally improve professional competence. Even failed programs may build intellectual and personal bridges that remain beneficial after the fact. Of more concern is the likelihood that Western mischaracterization of the appropriate roles of law will be accepted by developing countries, thus leading to misallocation of domestic effort and attention, and perhaps most important, eventually to deep disillusionment with the potential of law. When the revision of the criminal code does not prevent warlords from creating havoc in Afghanistan and the training of Chinese judges by American law professors does not prevent the detention of political dissidents—or, perversely, enables judges to provide plausible legal reasons for their detention—political leaders on all sides may turn away from law completely and miss the modest role that law can play in political and economic development. This chapter proceeds as follows. In part 1, I distill from the myriad uses of the term “rule of law” two versions that are most relevant and explain why neither is very useful to those interested in economic development. I explain that legal reformers have chosen a narrowly technical and highly formalistic definition of law that denies its political nature and raises false hopes of achieving political goals without the messiness of politics. In part 2, I review the role of law in economic and social development, in the United States and Japan. I argue that law has not played the role expected of it in these cases. I do not deny that law and legal institutions have been important in these countries. Rather, I argue that neither country can provide empirical justification for the types of legal models now being advocated as necessary for economic development in contemporary developing countries. Part 2 ends with the assertion that rule of law advocacy as presently practiced raises false hopes for developing countries and diverts the attention of the development community away from more productive approaches both to the creation of effective legal systems and to development itself In part 3 I attempt to explain why the rule of law retains such a strong hold over the imaginations of contemporary policymakers despite its poor record in practice.

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  Judicial Review and Republican Government

  Jeremy Waldron

  The role of the United States Supreme Court has been deeply controversial throughout American history. Should the Court undertake the task of guarding a wide variety of controversial and often unenumerated rights? Or should it confine itself to enforcing specific constitutional provisions, leaving other issues (even those of rights) to the democratic process? That Eminent Tribunal brings together a distinguished group of legal scholars and political scientists who argue that the Court's power has exceeded its appropriate bounds, and that sound republican principles require greater limits on that power. They reach this conclusion by an interesting variety of paths, and despite varied political convictions. Some of the essays debate the explicit claims to constitutional authority laid out by the Supreme Court itself in Planned Parenthood v. Casey and similar cases, and others focus on the defenses of judicial authority found commonly in legal scholarship (e.g., the allegedly superior moral reasoning of judges, or judges' supposed track record of superior political decision making). The authors find these arguments wanting and contend that the principles of republicanism and the contemporary form of judicial review exercised by the Supreme Court are fundamentally incompatible. The contributors include Hadley Arkes, Gerard V. Bradley, George Liebmann, Michael McConnell, Robert F. Nagel, Jack Wade Nowlin, Steven D. Smith, Jeremy Waldron, Keith E. Whittington, Christopher Wolfe, and Michael P. Zuckert.

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  Liberalism, Political and Comprehensive

  Jeremy Waldron

  This major new Handbook provides a definitive state-of-the-art review to political theory, past and present. It offers a complete guide to all the main areas and fields of political and philosophical inquiry today by the world's leading theorists. The Handbook is divided into five parts which together serve to illustrate: the diversity of political theorizing; the substantive theories that provide an over-arching analysis of the nature/or justification of the state and political life; the political theories that have been either formulated or resurgent in recent years; the current state of the central debates within contemporary political theory; the history of western political thought and its interpretations; traditions in political thought outside a western perspective. The Handbook of Political Theory marks a benchmark publication at the cutting edge of its field. It is essential reading for all students and academics of political theory and political philosophy around the world.

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  Property and Ownership

  Jeremy Waldron

  Property is a general term for rules governing access to and control of land and other material resources. Because these rules are disputed, both in regard to their general shape and in regard to their particular application, there are interesting philosophical issues about the justification of property. Modern philosophical discussions focus mostly on the issue of the justification of private property rights (as opposed to common or collective property). ‘Private property’ refers to a kind of system that allocates particular objects like pieces of land to particular individuals to use and manage as they please, to the exclusion of others (even others who have a greater need for the resources) and to the exclusion also of any detailed control by society. Though these exclusions make the idea of private property seem problematic, philosophers have often argued that it is necessary for the ethical development of the individual, or for the creation of a social environment in which people can prosper as free and responsible agents.

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  The Rule of Law as a Theater of Debate

  Jeremy Waldron

  Dworkin and His Critics provides an in-depth, analytical discussion of Ronald Dworkin's ethical, legal and political philosophical writings, and it includes substantial replies from Dworkin himself. Includes substantial replies by Ronald Dworkin, a comprehensive bibliography of his work, and suggestions for further reading. Contributors include Richard Arneson, G. A. Cohen, Frances Kamm, Will Kymlicka, Philippe van Parijs, Eric Rakowski, Joseph Raz and Jeremy Waldron. Makes an important contribution to many on-going debates over abortion, euthanasia, the rule of law, distributive justice, group rights, political obligation, and genetics.

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  Tribalism and the Myth of the Framework: Some Popperian Thoughts on the Politics of Cultural Recognition

  Jeremy Waldron

  Popper’s critique of tribalism in The Open Society and Its Enemies is something more than an attack on early forms of collectivism, and its relevance for modern political philosophy goes beyond the liberalism/communitarianism debate. Popper’s critique focuses on nostalgic attempts to revive the sense of immanent normativity and ethical solidarity associated with tribal custom; he argues that these attitudes are futile and inauthentic in the modern world where peoples have complex dealings with one another and where their knowledge of the customs of other societies has enabled them to develop critical attitudes towards their own. This chapter applies that critique to the philosophy of modern cultural identity politics. It argues that partisans of cultural identity make many of the same mistakes as those whom Popper labelled tribalists make. It suggests that a better and more authentic stance for the members of minority cultures in modern societies is to engage their norms as political proposals for solving the problems of the wider society, rather than as fiercely defended aspects of individual identity. The chapter concludes by using Popper’s arguments from ‘The Myth of the Framework’ to debunk the claim that customs and norms from different cultural settings are incommensurable and cannot engage one another in fruitful debate

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  A Constitution for Europe? Some Hard Choices

  Joseph H. H. Weiler

  This book's principal aim is to critically address the institutional and substantive legal issues resulting from European enlargement, chiefly those relating to the legal foundations on which the enlarged Union is being built. The accession of new Member States creates the potential for a stronger and more powerful Europe. Realising this potential, however, will depend on the ability of the EU to develop functional and effective governance structures, both at the European level and at the level of the individual Member States. While the acquis communautaire will ensure that formal laws in the new Member States will be aligned with those of existing members, the question remains as to how effective institutions will be in implementing changes, and what effects the imposed changes will have on the legitimacy of the new legal framework. This book, containing the work of leading scholars in law and social sciences, examines the current and future legal framework for EU governance, and the role that new members will—or will not—play in the creation of that framework, paying particular attention to the specific challenges membership in the EU poses to the acceding states of Central and Eastern Europe. It is a book which will contribute to and influence debates over constitutionalism and legal harmonisation in the EU.

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  Human Rights, Constitutionalism, and Integration: Iconography and Fetishism

  Joseph H. H. Weiler

  The advent of the Charter of Fundamental Rights of the European Union is one of the factors which is feeding the renewed debate about a constitution for Europe. For many, the Charter is the first, important element in a would-be European constitution. It is appropriate that fundamental rights (German preference) or human rights (French preference) should be at the centre of such constitutional discussion. But it is also appropriate that one does not allow the normative complexity of the trinity of human rights, constitutionalism and integration to be obscured by our enthusiasms for all three. This essay is meant, thus, to highlight some of the darker aspects of the ongoing debate.

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  The Folly of Defining Art

  Amy M. Adler

  Essays which expand upon ideas introduced at "The New Gatekeepers: A Conference on Free Expression in the Arts" held Nov. 2002 at Columbia University, New York, N.Y., organized by the National Arts Journalism Program.

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  The Security Council's War on Terrorism: Problems and Policy Options

  José E. Alvarez

  Recent resolutions of the United Nations Security Council, notably those resulting in the freezing of assets of individuals and organisations suspected of involvement in international terrorism, have had far-reaching consequences for member states and individuals. In addition, they might conflict with international human rights standards that are binding on the Security Council itself. In light of the limited possibility for reviewing the legality of these resolutions on the international level, individuals have recently begun to challenge their implementation on the national and regional level. This emerging practice raises the question whether states and regional organisations such as the EU can engage in such review and, if so, to what extent.

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  An Institutional Innovation to Reduce the Agency Costs of Public Corporate Bonds: Changing the Role of the Trustee

  Yakov Amihud, Kenneth Garbade, and Marcel Kahan

  This chapter proposes an innovation in the design of publicly registered corporate bonds: an entity, which we call a supertrustee, will be responsible for active monitoring of the borrower and for renegotiation and enforcement of the bond contract. In this, the supertrustee will have the responsibility and authority of a solitary private lender, such as a bank. The goal is to facilitate relatively inexpensive and non-opportunistic renegotiation and enforcement of bond covenants, thus enabling public debt to have more and tighter covenants that better control the behaviour of the firm without requiring that the firm sacrifice strategic flexibility. The result will be a reduction in the agency costs of public debt, in the same way that those costs are reduced in private lending, without impairing liquidity or diversifiability. Debt financing gives rise to conflicts of interest between creditors and stockholders that are better controlled with private loans than publicly traded bonds. However, public debt has greater liquidity and diversifiability. We propose an institutional innovation—a “supertrustee”—that incorporates the desirable characteristics of private debt into public debt. In particular, the supertrustee will be responsible for active monitoring of the borrower and for renegotiation and enforcement of the bond contract. Corporate managers, acting on behalf of shareholders, sometimes have incentives to undertake initiatives that would reduce the value of a firm's bonds. Creditors protect themselves with loan covenants that restrict the actions of the firm or that specify minimum operating characteristics whose breach triggers acceleration of a loan's maturity. However, covenants may prevent the firm from undertaking value-increasing projects, or the firm may inadvertently breach a covenant and trigger financial distress. The joint interests of creditors and shareholders may be better served with numerous, tight covenants that can be waived or renegotiated as the occasion demands. Encumbering public bond indentures with many and tight covenants, with the intention of renegotiating them should the need arise at a later date, has two problems: renegotiation is costly when bondholdings are fluid and bondholders are dispersed (covenant changes require a time-consuming and expensive vote by the bondholders and individual bondholders have little incentive to acquire information and to negotiate with the issuer) and a firm may be apprehensive of bondholders acting opportunistically. For example, bondholders may demand compensation for agreeing to an amendment that far exceeds the uncompensated cost of the amendment. For these reasons, public corporate bonds typically have few and loose covenants. Agency costs of debt are controlled more effectively with bank and privately placed loans, where ownership is neither fluid nor dispersed and where lenders negotiate non opportunistically in order to promote a reputation that will enhance the flow of new business. (Bondholders do not care about their reputations because issuers cannot control the identity of their public creditors). On the other hand, private loans are inferior to public bonds in their liquidity and diversifiability. We propose that a publicly registered corporate bond provide for a “supertrustee” to act on behalf of bondholders. The supertrustee will be charged with responsibility to monitor compliance with covenants and will be given exclusive authority to negotiate amendments and to decide what action to take in the event of a breach. By ameliorating the problems associated with the dispersion and fluidity of ownership, our proposal will allow public bonds to more closely resemble private loans, with more and tighter covenants, active monitoring and relatively inexpensive renegotiation. This will more effectively control agency costs while allowing an issuer to undertake projects that enhance the aggregate value of the firm. At the same time, because it is publicly traded, the debt will retain the benefits of liquidity and diversifiability. The supertrustee is intended to emulate the behaviour of a solitary private creditor in monitoring compliance, in renegotiating covenants, and in deciding what action to take following breach. This behaviour can be elicited with incentives regarding liability, compensation, and appointment power. The liability regime for the supertrustee should take account of the benefits to bondholders that flow from the supertrustee's reputation for non-opportunistic behaviour, i.e., enhancing the confidence of the issuer that tight covenants will not be enforced opportunistically. We recommend that the supertrustee's decisions be evaluated under a standard analogous to the “business judgment rule.” This will allow the supertrustee the latitude needed to take account of the effect of its decisions on its own reputation. The compensation of a supertrustee should be greater for bonds issued by companies with more complicated operating characteristics and for bonds with more complex covenants and bearing more credit risk, for which more intense monitoring is appropriate and more renegotiation is likely. Given the latitude in decision making available to the supertrustee, its compensation may also include incentives similar to executive stock options. The supertrustee will be appointed initially by the borrower-thereby emulating the situation in the private credit markets where a borrower chooses its creditors. This will increase the sensitivity of the supertrustee to the cost of acquiring a reputation for opportunistic behaviour. The bond indenture may further provide for the bondholders to elect a replacement supertrustee—just as stockholders choose a board of directors. This will enhance the responsiveness of the supertrustee to creditor concerns. We believe the proposed structure will be more desirable for debt issued by firms with greater inherent credit risk and in more volatile industries with significant intangible assets. The scheme will be more attractive for larger issues and for issuers with more public indebtedness because most of the costs of a supertrustee do not vary with the size of an issue or the number of issues. The scheme will also be more attractive for longer term bonds because there are temporal economies of scale in monitoring a company through time and because covenant protection and the ability to renegotiate covenants are both more valuable on longer term debt.

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  Liberal Education: The United States Example

  Kwame Anthony Appiah

  Anthony Appiah’s essay on liberal education in the United States begins by identifying a distinctive feature of classical liberalism—namely, that the state must respect substantial limits with respect to its authority to impose restrictions on individuals, even for their own good. Nevertheless, Appiah points out, the primary aim of liberal education is to ‘maximize autonomy not to minimize government involvement’. Most of the essays in this volume, including Appiah’s, are attempts to address the question of what the liberal commitment to maximize personal autonomy means when it comes to the teaching of what Appiah refers to as ‘identity-related claims’. The aim of this chapter is to suggest how one might begin to think about some questions in the philosophy of education, guided by the liberal thought that education is a preparation for autonomy, and to show that this tradition is both powerful enough to help with this difficult question and rich enough to allow answers of some complexity.

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  Race and IQ

  Kwame Anthony Appiah

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  Will International Agreements Trump Local Environmental Law?

  Vicki L. Been

  Local governments have adopted a host of environmental laws that establish new standards governing the use of the land. These are found in traditional land use laws, including zoning and subdivision regulations, as well as in regulations that protect particular environmental features such as ridgelines, wetlands, watersheds, scenic viewsheds, and waterbodies. This is a very recent movement, but one that has proceeded far enough to demonstrate the powerful role that local governments can play in the nation`s efforts to protect natural resources and to maintain environmental quality. The advent of local environmental law challenges practitioners and academics to describe this new field and explain its relationship to traditional concepts of environmental and land use law. New Ground: The Advent of Local Environmental Law presents a collection of papers examining local environmental law and its strategic role in shaping an appropriate response to a new generation of environmental and land use challenges. Contributors are distinguished scholars and practitioners who have written casebooks and articles on land use and environmental law, served in federal, state, and local administrations or national bar and planning association committees, or prepared national treatises on the subject. Their papers were presented at a symposium hosted by Pace University School and co-sponsored by the Environmental Law Institute. The book includes a detailed explanation of this developing field by the editor, the participants' papers, and their commentaries at the symposium.

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  A Hair Piece: Perspectives on the Intersection of Race and Gender

  Paulette Caldwell

  I want to know my hair again, to own it, to delight in it again, to recall my earliest mirrored reflection when there was no beginning and I first knew that the person who laughed at me and cried with me and stuck out her tongue at me was me. I want to know my hair again, the way I knew it before I knew that my hair is me, before I lost the right to me, before I knew that the burden of beauty-or lack of it for an entire race of people could be tied up with my hair and me. I want to know my hair again, the way I knew it before I knew Sambo and Dick, Buckwheat and Jane, Prissy and Miz Scarlett. Before I knew that my hair could be wrong—the wrong color, the wrong texture, the wrong amount of curl or straight. Before hot combs and thick grease and smelly-burning lye, all guaranteed to transform me, to silken the coarse, resistant wool that represents me. I want to know once more the time before I denatured, denuded, denigrated, and denied my hair and me, before I knew enough to worry about edges and kitchens and burrows and knots, when I was still a friend of water—the rain's dancing drops of water, a swimming hole's splashing water, a hot, muggy day's misty invisible water, my own salty, sweaty, perspiring water. When will I cherish my hair again, the way my grandmother cherished it, when fascinated by its beauty, with hands carrying centuries-old secrets of adornment and craftswomanship, she plaited it, twisted it, cornrowed it, finger-curled it, olive-oiled it, on the growing moon cut and shaped it, and wove it like -fine strands of gold inlaid with semiprecious stones, coral and ivory, telling with my hair a lost-found story of the people she carried inside her? Mostly, I want to love my hair the way I loved hers, when as granddaughter among grandsons I stood on a chair in her room—her kitchen-bed-living-dining room—and she let me know her hair, when I combed and patted it from the crown of her head to the place where her neck folded into her shoulders, caressing steel-gray strands that framed her forehead before falling into the soft, white, cottony temples at the border of her cheekbones. Cotton. Cotton curled up in soft, fuzzy puffballs around her face. Cotton pulled out and stretched on top of her head into Sunday pompadours. Cotton, like the cotton blooming in August in her tiny cotton field. Cotton, like the cotton that filled the other room in her house—the cotton room—the storehouse for September's harvest a cradle to shield her pickings from wind and rain, to await baling and ginning and cashing in. Cotton, which along with a cow, a pig, and a coop of chickens, allowed her to eke out a husband-dead, children-gone independence in some desolate place, trapped in the bowels of segregation. Here, unheard, unseen, free, she and her beauty and her hair could not be a threat to anyone.

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  Discretion in Cultural Context

  Oscar G. Chase

  I invite you to join me in looking at the concept of discretion as it operates in the American system of civil procedure, not so much as a student of law but as a student of culture. After addressing the notion of the cultural study of procedural systems, I will describe some problematic aspects of the doctrine of discretion in American procedural law, focusing in particular on the opposition of discretion to law. I will argue that a resolution of these problems requires a recognition that the concept of judicial discretion, whish is classically distinguished from the concept of law, is in part a rhetorical construct rather than a decisional authority of a special kind. If this is so, such an account by connecting the rise of judicial discretionary authority in the twentieth century to two broader developments - the triumph of efficiency as an organizational pradigm and, second, the loss of faith in the Rule of Law and its attedant professional anxiety.