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Abstract:
Bad corporate governance is often invoked to explain poor enterprise performance, but the catch phrase is never precisely defined. Neither its consequences for the real economy, nor its causes in particular countries has been adequately explained. This paper uses Russian enterprise examples to address these open questions in corporate governance theory. We define corporate governance by looking to the economic functions of the firm rather than to any particular set of national corporate laws. Firms exhibit good corporate governance when their managers maximize residuals and, in the case of investor-owned firms, make pro rata distributions to shareholders.

Using this definition, we develop a typology that shows the channels through which bad corporate governance can inflict damage on the real economy. The typology helps identify vulnerabilities to corporate governance problems that may appear in any country and it suggests a new way to tailor policy responses. Second, we explain the causes of poor corporate performance in Russia by looking to the particular conditions prevailing at privatization - the untenable initial firm boundaries and the initial allocation of shares primarily to insiders -- and the bargaining dynamics that followed. The focus on initial conditions helps expand a comparative corporate governance literature built on United States, Western European, and Japanese models.

Lessons from Russian fiascos counsel caution as to stakeholder proposals including labor or local communities in formal corporate governance and generate testable hypotheses regarding potential losses from the multiple large block share ownerships typical of many U.S. firms, especially close corporations.

Abstract:
The American law of property encourages people to create wealth by breaking up and recombining resources in novel ways. But fragmenting resources proves easier than putting them back together again. Property law responds by limiting the one-way ratchet of fragmentation. Hidden within the law is a boundary principle that keeps resources well-scaled for productive use. Recently, however, the Supreme Court has been labeling more and more fragments as private property, an approach that paradoxically undermines the usefulness of private property as an economic institution and Constitutional category. Identifying the boundary principle threads together disparate property law doctrines, clarifies strange asymmetries in property theory, and unknots some takings law puzzles.

Abstract:
The American law of property encourages people to create wealth by breaking up and recombining resources in novel ways. But fragmenting resources proves easier than putting them back together again. Property law responds by limiting the one-way ratchet of fragmentation. Hidden within the law is a boundary principle that keeps resources well-scaled for productive use. Recently, however, the Supreme Court has been labeling more and more fragments as private property, an approach that paradoxically undermines the usefulness of private property as an economic institution and Constitutional category. Identifying the boundary principle threads together disparate property law doctrines, clarifies strange asymmetries in property theory, and unknots some takings law puzzles.

An earlier version of this article was announced as University of Michigan Law School, Law and Economics Working Paper No. 99-010. The working paper can be downloaded from http://papers.ssrn.com/sol3/papers.cfm?abstract_id=173851

Abstract:
Must we choose between the benefits of cooperative use of scarce resources and our liberal commitments to autonomy and exit? No. Law can mediate community and liberty ? a theory of the liberal commons provides the bridge that reconciles these two seemingly contradictory imperatives. Liberal commons institutions enable a limited group of people to capture the economic and social benefits from cooperation, while also ensuring autonomy to individuals through a secure right to exit. This Article shows how current theories obscure the most salient tradeoffs in managing commons resources; details the liberal commons model comprising the decision-making spheres of individual dominion, democratic self-governance, and cooperation-enhancing exit; and presents a case study on declining black landownership that illustrates the power of our approach.

Abstract:
Property concerns conflicts - both conflicts between individuals and conflicts of interest. Conflicts between individuals have long been the paradigmatic property focus. According to this view, property debates circle around issues of autonomy and productive competition. But this is an impoverished view. In this Article, we shift attention to conflicts of interest. By helping people manage conflicts of interest, a well-governed property system balances interdependence with autonomy and productive cooperation with productive competition. We identify three mechanisms woven throughout property law that help manage conflicts of interest: (1) internalization of externalities; (2) democratization of management; and (3) de-escalation of transactions. We show that property law predictably selects among these mechanisms depending on the ratio of economic to social benefits that people seek from a group resource. When economic concerns predominate, property law typically uses contribution-based allocations of rights and responsibilities mediated by formal, foreground procedures; while at the social end of the spectrum we tend to see more egalitarian substantive rules operating in an informal, background safety net.

Abstract:
The standard property trilogy of private, commons, and state has become so outdated that it now impedes imagination and innovation at the frontiers of ownership. This essay suggests two approaches - creating new ideal types and synthesizing existing ones - that may help update our static property metaphors. Using these dynamic approaches to property analytics, legal theory can move beyond polarizing oppositions that have made jurisprudential debates unsolvable and rendered concrete problems invisible.

Property, analytics, legal theory, private, commons, public, state

Abstract:
Whatever happened to the study of restitution? Once a core private law subject along with property, torts and contracts, restitution has receded from American legal scholarship. Hanoch Dagan's book "Unjust Enrichment: A Study of Private Law and Public Values" threatens to reverse the tide and make restitution interesting again. The book shows how we can examine commonplace words such as "value" and "gain" to extract the core social values embedded in the private law. The technicalities of unjust enrichment reveal compelling stories about property, personhood, and national ethos. In our review, we put Dagan's jurisprudential approach to the practical test of explaining restitution in postsocialist societies. We focus on Eastern Europe, where the Czechs put elderly people back in their childhood apartments, while the Hungarians offered compensation coupons for use in privatization auctions. Dagan's theory provides some order for the hodgepodge of national mythmaking, political accident, and cultural posturing that has surrounded the postsocialist restitution frenzy. His framework suggests some surprising insights, for example, that more aggressive restitution may prove less protective of private property rights. In turn, the Eastern European experience challenges Dagan's portrayal of the feel-good ethos of sharing by suggesting a more troubling take on the meaning of community.

Abstract:
Phillips v. Washington Legal Foundation, 118 S Ct 1925 (1998), held that interest generated by the Texas Interest on Lawyers Trust Account (IOLTA) program is the "private property" of the clients who handed over the principal; the Court did not decide whether the IOLTA program worked a "taking," or, if it did, what "just compensation" was due. The debates among the justices about the meaning of private property, argued in terms of contextual and conceptual severance, are unlikely to prove fruitful. We elaborate a better approach that looks to the underlying purposes of just compensation: efficiency and justice are best served by uncoupling matters and methods of deterrence from matters and methods of distribution.

Abstract:
Supreme Court decisions over the last three-quarters of a century have turned the words of the Takings Clause into a secret code that only a momentary majority of the Court is able to understand. The Justices faithfully moor their opinions to the particular terms of the Fifth Amendment, but only by stretching the text beyond recognition. A better approach is to consider the purposes of the Takings Clause, efficiency and justice, and go anew from there. Such a method reveals that in some cases there are good reasons to require payment by the government when it regulates property, but not to insist upon compensation to each aggrieved property owner. In other cases, the opposite is true -- compensation to individuals makes sense, but payment by the responsible government agency does not. Uncoupling efficiency and justice would invigorate the law of takings.

Abstract:
The "tragedy of the commons" metaphor helps explain why people overuse shared resources. However, the recent proliferation of intellectual property rights in biomedical research suggests a different tragedy, an "anticommons" in which people underuse scarce resources because too many owners can block each other. Privatization of biomedical research must be more carefully deployed to sustain both upstream research and downstream product development. Otherwise, more intellectual property rights may lead paradoxically to fewer useful products for improving human health.

Abstract:
Why are many storefronts in Moscow empty while street kiosks in front are full of goods? This article develops a theory of anticommons property to help explain the puzzle of empty storefronts and full kiosks. Anticommons property can be understood as the mirror image of commons property. By definition, in a commons, multiple owners are each endowed with the privilege to use a given resource, and no one has the right to exclude another. When too many owners hold such privileges of use, the resource is prone to overuse ? a tragedy of the commons. Depleted fisheries and overgrazed fields are canonical examples of this familiar tragedy. In an anticommons, multiple owners are each endowed with the right to exclude others from a scarce resource, and no one has an effective privilege of use. When too many owners hold such rights of exclusion, the resource is prone to underuse ? a tragedy of the anticommons. Empty Moscow storefronts are a canonical example of the tragedy of underuse. Anticommons property may appear whenever governments define new property rights in both post-socialist and developed market economies. Once an anticommons emerges, collecting rights into usable private property bundles can be brutal and slow. The difficulties of overcoming a tragedy of the anticommons suggest that policymakers should pay more attention to the content of property bundles, rather than focusing just on the clarity of rights.