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Abstract:
Over the past two decades there has been a resurgence of interest, on the part of both academics and practitioners, in using law to promote development in Latin America, sub-Saharan Africa, Central and Eastern Europe, and Asia. The level of academic interest in the topic is reflected in the publication of three recent books on law and development by prominent American scholars: Thomas Carothers (ed.), PROMOTING THE RULE OF LAW ABROAD: IN SEARCH OF KNOWLEDGE, Kenneth Dam, THE LAW-GROWTH NEXUS: THE RULE OF LAW AND ECONOMIC DEVELOPMENT, and David Trubek and Alvaro Santos (eds.), THE NEW LAW AND ECONOMIC DEVELOPMENT: A CRITICAL APPRAISAL. In this Essay we suggest that these books (or at least some contributions to them) reflect insensitivity to the ambiguities surrounding the relationship between legal reform and development. We show that there is ongoing debate about fundamental questions such as whether law is an important factor in determining social or economic outcomes in developing societies given the existence of informal methods of social control; whether there are insurmountable economic, political or culture obstacles to effective legal reform; as well as, assuming effective legal reform is feasible, what types of reforms are conducive to development and what types of actors ought to implement them. We argue that although there are some reasons for optimism about the potential impact of legal reforms upon development, the relevant empirical literature is inconclusive on many important issues and counsels caution about the wisdom of continuing to invest substantial resources in promoting legal reform in developing countries without further research that clarifies these issues.

Law and development, legal reform, empirical legal studies

Abstract:
This paper largely focuses on the potential interface between international trade policy and international labour standards in the WTO multilateral trading system. The paper proceeds by reviewing sequentially the choice of policy objectives, the choice of policy instruments, and the choice of institutional regime in structuring a trade policy-labour standards linkage. On choice of objective, the paper argues for assimilating core labour standards (CLS) with universal human rights, but not privileging CLS over other universal human rights. It rejects fair trade and race-to-the-bottom rationales for a trade policy-labour standards linkage. On choice of instrument, it rejects conditioning the linkage of trade sanctions to universal human rights on adverse trade effects in the sanctioning country. On choice of institutional arrangement, it favours according a pre-eminent institutional role to the ILO and U.N. Human Rights Committees in making determinations of systematic and persistent violations of relevant universal human rights, leaving the Dispute Settlement Body of the WTO with the determination of whether trade sanctions with violators have been applied in a non-discriminatory and consistent fashion and meet some basic standard of proportionality.

trade policy, labour standards

Abstract:
The conventional wisdom among economists and development scholars is that strong formal property rights are a necessary pre-condition for economic growth. By way of a thorough analysis of the theoretical and empirical literature relating to property rights and economic development, this paper questions this wisdom and argues instead for a more nuanced and context-dependent approach to the understanding of the relationship between property rights and development. This first part of this paper argues that in certain cases, the costs of a creating a formal property rights regime outweigh the benefits derived from that regime. The second part argues that property rights regime cannot be viewed as isolated institutions which are independent from other social institutions, but rather that the success of a formal property rights regime is contingent upon the successful operation of a number of other institutions. Finally, the third part examines the process of transition from an informal to a formal property rights regime and argues that the appropriate model for facilitating that transition crucially depends on the reason for the perpetuation of the informal regime.

Abstract:
This paper assesses the current state of deregulation in Canadian markets for telephony, electricity and airlines. It is an opportune time to review the Canadian experience. Enough time has passed since the inception of deregulation, and sufficient problems have arisen in the transition towards competition, that lessons are available. The problems are evident: shortages and consumer intolerance to high prices in electricity markets; a slow (relative to prior expectations) rate of entry of competitors into local telephone service; and bankruptcies in the airline industry. Yet enough distance remains in the transition towards greater reliance on markets, and uncertainty in even how far the transition will take us, that these lessons will prove valuable in the future.

Abstract:
In the past decade, an institutional perspective on development has become increasingly prominent in development thinking. However, the reform experience thus far suggests that if institutions indeed matter for development, we still do not have a firm understanding of how to transforms dysfunctional institutions. Drawing on concrete examples of rule of law and property rights reforms, we argue that path dependence theory can shed some light on past failures and provide guidance for future reforms.

Institutional theories, path dependence, rule of law, property rights, and development reforms

Abstract:
There has been a dramatic shift in the focus of trade policy concerns in recent years from the barriers that lie at the border to the barriers which exist "within the border." The General Agreement on Tariffs and Trade/World Trade Organization (GATI/WTO) and other regional trading arrangements have been largely successful in reducing both the levels of tariffs worldwide and the scale of other border measures such as quotas. This has revealed a new and more subtle category of measures which restrict trade - the numerous regulations which governments enact to protect the health and safety of their citizens and the environment in which they live.

The efforts to protect citizens from the hazards of everyday life have become a virtual minefield for trade policy makers, in part because such differences can often be manipulated or exploited to protect domestic industry from international competition, and in part because even when there is no protectionist intent on the part of lawmakers, through a lack of coordination, mere differences in regulatory or standard-setting regimes can function to impede trade through increasing multiple compliance costs. It has thus become increasingly difficult to delineate the boundaries between a nation's sovereign right to regulate and its obligation to the international trading community not to restrict trade.

In this paper we argue for a relatively deferential form of review of domestic health and safety regulations by the WTO Dispute Settlement Body that keys on certain minimum objectively verifiable characteristics of the regulatory process (which we characterize as form and process review, rather than substantive review) and that seeks to achieve an acceptable balance between the objectives of screening out regulatory protectionism and allowing substantial domestic policy autonomy to respond to domestic consumer risk preferences. In striking this balance, standards of review and burdens of proof are critical to decisional outcomes, given the scientific uncertainty that attends many health and safety risks and idiosyncratic consumer preferences towards different kinds of risks. We believe that our approach is consistent with the core provisions of the WTO SPS Agreement and is largely, but not entirely, consistent with the approach taken by the WTO Appellate Body in the three decisions that it has rendered under the SPS Agreement to date.

Abstract:
This article addresses a long-standing controversy in many antitrust/competition law regimes around the world, including Canada, as to the appropriate role for private enforcement of competition laws. The United States, from the origins of its antitrust law in 1890, has provided for an expansive role for private actions for violations through treble damages remedies, class action procedures, one-way cost rules, contingent fees, and civil jury trials. The Canadian experience has been sharply different: statutory recognition of any role for private action occurred only in amendments to the Competition Act in 1916, and private damages actions were confined to criminal violations of the Act. The Bureau of Competition Policy has recently proposed a more expansive role for private actions under the Competition Act, in particular providing mechanisms for private parties to have direct access to the Competition Tribunal in non-criminal matters. The authors review the comparative experience with private antitrust enforcement; evaluate the arguments for and against the private enforcement of public laws generally; and review theoretical debates over the role of private enforcement of antitrust laws on either deterrence or compensation grounds. The authors conclude with a set of procedural and remedial proposals designed to structure and discipline in appropriate ways a private enforcement regime under the Competition Act.

Abstract:
The four Arab Human Development Reports 2002-2005, sponsored by the United Nations Development Program, have attracted more attention and controversy than any other official studies of development in recent years. Celebrated by many Western commentators as a courageous exercise in self-criticism by the Arab authors, the Reports have in turn been denounced by most Arab commentators in the Middle East as an exercise in self-denigration, as scapegoating Arab countries for the legacies of colonialism and Western foreign policy interventions, and as propagating an ethnocentric conception of liberal individualism. The Reports focus on three key themes: building a knowledge society; expanding civil and political freedoms; and women's empowerment. This paper argues that these Reports illuminate an important set of controversies in the broader contemporary development literature, in particular alternative conceptions of the ends of development (e.g., growth versus freedom), and the respective roles of institutions and culture in promoting and shaping developing. The paper is critical of the Reports for marginalizing the importance of economic growth in the development equation and in failing to address the dynamics of the policy reform process, hence risking espousal of an unproductive form of utopianism or universalism.

Abstract:
The four Arab Human Development Reports 2002-2005, sponsored by the United Nations Development Program, have attracted more attention and controversy than any other official studies of development in recent years. Celebrated by many Western commentators as a courageous exercise in self-criticism by the Arab authors, the Reports have in turn been denounced by most Arab commentators in the Middle East as an exercise in self-denigration, as scapegoating Arab countries for the legacies of colonialism and Western foreign policy interventions, and as propagating an ethnocentric conception of liberal individualism. The Reports focus on three key themes: building a knowledge society; expanding civil and political freedoms; and women's empowerment. This paper argues that these Reports illuminate an important set of controversies in the broader contemporary development literature, in particular alternative conceptions of the ends of development (e.g., growth versus freedom), and the respective roles of institutions and culture in promoting and shaping developing. The paper is critical of the Reports for marginalizing the importance of economic growth in the development equation and in failing to address the dynamics of the policy reform process, hence risking espousal of an unproductive form of utopianism or universalism.

Abstract:
While consumer protection policy has an ancient genesis, dating back at least to Roman times with the adoption in Roman law of various implied warranties against latent defects in the sale of goods, the current legislative and regulatory consumer protection framework in most industrialized countries largely finds its genesis in the consumer and more general policy activism of the 1960s and 1970s, during which period most of the major contemporary consumer protection statutes were first enacted or extensively elaborated. As we enter the twenty-first century, pressures on these legal and regulatory regimes are mounting, spurred both by changes in the nature of modern industrial economies and by the evolution of economic theory.

In previous writing, with my colleagues, Gillian Hadfield and Robert Howse we attempted to develop, consistently with the regulatory checklist approach recently developed by the Organization for Economic Cooperation and Development (OECD) in its more general work on regulatory reform, a series of questions or guidelines that are relevant specifically to the consumer protection field, and that, in our view, flow from an information-based approach to consumer protection policy, which we argue is the appropriate framework for analyzing most consumer protection problems. In the following section, I briefly recapitulate our principal conclusions from our earlier analysis. In the third section (pp. 80-91), I then review a number of issues pertaining to the role of civil redress with respect to consumer protection problems. In the fourth section (pp. 91-97), I discuss the role of the courts in policing unfair contract terms. The fifth section (pp. 97-98) offers some concluding observations.

Abstract:
Developing countries have long sought special and differential treatment (SDT) to help them integrate their economies into the world trading system. However, such initiatives have not only largely failed to achieve their goals but have tended to encourage inward-looking trade policies. The question of how to approach SDT has emerged as a key issue in the agricultural talks of the Doha Round negotiations, with Members unable to agree on a mutually satisfactory way forward. The authors argue that despite SDT's poor record, there remains an argument to be made for policies that have the goal of assisting developing countries deal with the adjustment costs of integrating their economies into the world trading regime. Thus, the relevant question is not whether SDT should exist at all, but what kinds of SDT measures can usefully be employed in the agricultural sector, given both lessons of the past and the realities of today's geopolitical environment. The paper addresses this question and explores possibilities for breaking the current impasse. It suggests that the primary focus of the negotiations ought to be on extending market access in agricultural products of export interest to all developing countries. In return, developing countries (other than LDCs) should make across-the-board commitments to agricultural liberalization, subject to longer transition periods and in particular to a special ex ante safeguards regime. This regime - as detailed in the paper - would focus SDT on protection of exceptionally vulnerable agricultural sectors likely to face severe adjustment costs from agricultural liberalization.

agricultural trade, special and differential treatment, SDT, Doha Development Round, WTO, liberalization

Abstract:
A number of important issues remain unresolved in Canada in defining the scope of the exemption of regulated conduct from the purview of the Competition Act. The Competition Bureau's Information Bulletin on the Regulated Conduct Defence has done little to resolve these issues and the Bureau has recently announced public consultations on this subject. A number of issues are often unhelpfully elided in debates over the scope of the so-called regulated conduct defence. This paper attempts to disaggregate these issues.

Abstract:
This article briefly describes trends in the frequency and severity of medical malpractice claims in Canada and the U.S., with some comparative references to trends in Britain and Australia. In all cases, frequency and severity rates appear to have risen quite dramatically over the past decade and a half. The article proceeds to explore various hypotheses that might explain these trends. While empirical analysis does not yield firm conclusions, the fact that so many jurisdictions have experienced a somewhat similar phenomenon makes it doubtful that the primary cause of the increase is likely to be idiosyncratic features of one particular country's tort system. Instead, the authors conjecture that various changes in medical technology may well be a more important explanatory factor. The article goes on to examine the empirical evidence on the impact of expanding liability on physician behaviour and in turn whether observed changes in physician behaviour have caused reductions in the medical injury rate. While it seems clear from the evidence that the liability system has 'induced various changes in physician behaviour, it is much less clear whether these changes have reduced the medical injury rate or are otherwise socially desirable.

Abstract:
The public perturbations leading up to and surrounding the Seattle Ministerial meetings of the World Trade Organization (WTO) in late 1999, and subsequent civil disturbances in Washington, Quebec City, and Genoa, confirmed dramatically, unambiguously, and probably irreversibly that trade negotiations and trade disputes have moved out of the quiet and obscure comers of trade. diplomacy and become matters of 'high politics'. Despite these disturbances, it is important to bring some measure of rigorous detachment to the evaluation of the criticisms that have been widely and vehemently directed at the WTO, especially by the non-governmental organization community. The WTO and international trade liberalization generally are accused of creating a global monoculture, increasing inequality, harming the environment, health and safety, and human rights, and leading society (undesirably) away from self-sufficiency. Another common allegation is that the WTO is undemocratic and unaccountable and improperly constrains domestic political sovereignty. In this article I will argue that these objections are mostly unfounded. Most of these critiques exhibit two broad themes: they focus both on inherent properties of international trade and on the institutional characteristics of the international trade governance regime.

Abstract:
This paper reviews the existing empirical evidence on the efficacy of the tort system and alternatives to it. The evidence is evaluated against three normative goals: deterrence, corrective justice, and distributive justice. Empirical evidence relating to five major categories of accidents is reviewed: automobile accidents, medical malpractice, product related accidents, environmental injuries, and workplace injuries. In each case, the paper proceeds by reviewing empirical evidence on the deterrence and compensatory properties of the tort system, and then reviews parallel bodies of evidence on regulatory or penal alternatives and on compensatory alternatives to the tort system.

Abstract:
This article reviews the empirical evidence on the results of regulation of health and safety risks. It notes dramatic variances in the costs per life saved of various health and safety regulations which implies serious misallocations of social resources. The authors argue that problems of over and under regulation are the result of political and regulatory processes insufficiently disciplined by technocratic tools, especially scientific risk assessment and cost-benefit analysis. On the other hand, both scientific risk assessment and cost-benefit analysis are themselves beset by numerous technical and normative frailties, hence requiring in turn that public participation in the regulatory process discipline the use of these technocratic tools so that scientific and technical analysts do not over-step the legitimate bounds of their disciplines and usurp value judgments more properly made ultimately by citizens in a liberal democracy. Hence, science must discipline politics and politics must discipline science. The article develops a set of institutional proposals for risk regulation designed to assign appropriate roles to technocratic and democratic tools in regulatory reform.

Abstract:
The regulation of family business financial arrangements has become a major problem for contract lawyers in Commonwealth jurisdictions. While the communality of family life and the informality and trust that it engenders are often rightly celebrated, they can also permit dominant family members to impose financial risks on other members that they would not otherwise choose. This paper explores the nature of family financial contracting in an attempt to clarify the regulatory issues that arise out of the basic family home fact pattern and its variants. The primary focus is on the contractual relationship between family sureties and lenders. Several possible legal regimes are examined in light of a proposed analysis of the typical contract failures they ought to address. The aim is to specify the inefficiencies associated with each possibility in order to make comparative evaluations. While each of the possible regimes we examine entails error and transaction costs, there are better and worse contenders. We argue that the optimal approach is to insist that vulnerable contractors proposing to enter potentially disadvantageous arrangements be independently advised as to their nature and risks. Vulnerable contractors who have been properly advised should be held to their bargains. The enforceability of a lender's security ought to be contingent on its ensuring that vulnerable contractors are so advised.

In Section II, we look generally at the role of private ordering in the family setting: We contrast the benefits of free contracting with concomitant risks, and point to features of family life that give rise to a need for paternalistic regulation of family financial arrangements. In Section III, we define certain terms and taxonomize the contracting problems that are prevalent in the family setting. In Section IV, we consider the role of independent legal advice as a device that is often employed to correct some of those contracting problems. We outline three possible functions of independent advice and assess their potential efficacy. In Section V, we detail the gatekeeper role that lenders play in detecting and correcting contract failure in the family setting. In so doing, we specify the parameters of the gatekeeping duty that lenders ought to be under. We conclude, in Section VI, with a general discussion of the scope and limits of legal paternalism in this contractual setting.

Abstract:
The authors make the case for allowing private parties direct access to the Competition Tribunal with respect to reviewable practices. Victims of practices found to be anti-competitive by the Tribunal ought to receive compensation for their injuries as well as injunctive relief to prevent future injury. The authors identify some of the issues that would need to be resolved in order to design a process that maximizes the potential of private actions to compensate and regulate while minimizing certain social costs of private enforcement, such as strategic behavior at odds with the goals of competition law.

Abstract:
The purpose of this article is to examine the existing legal structure of government contracting, and to assess its capacity to ensure governmental accountability in the contracting process. This analysis has two separate stages, corresponding with the two periods in which the government can effectively engage in opportunistic behaviour. First, the control of opportunism in the process of contract formation (or ex ante opportunism) will be examined. Second, the analysis will examine the control of opportunistic behaviour on the part of government in the process of contract performance (or ex post opportunism).

Abstract:
In this article, we discuss the economics of many regulated industries in order to determine whether there are unique issues that are likely to arise in the context of mergers in regulated industries that the current merger review framework under the Competition Act is unable to address. In our view, the existing legislation is adequate to deal with the potential competitive issues. At the same time, the Competition Bureau's examination does not extend beyond competitive issues and hence an examination of merger review also needs to consider the industry regulator's role. We discuss the prevalence of parallel merger review by industry regulators and the Competition Bureau and the inherent tensions that this system generates. We close by discussing the virtues and flaws of four potential models of regulatory interaction, including commenting on certain proposals for reform that have been advanced by others as a means of clarifying roles when reviewing mergers in regulated industries. In this respect, we strongly disagree proposal that the Competition Bureau cede jurisdiction to review a merger where there is a specialized industry regulator with concurrent jurisdiction to review a merger.

Abstract:
This article examines the cases for and against commercializing, or commodifying, reproductive materials and services. Using a supply/demand third-party framework, three basic scenarios in which commercial-exchange relationships may be possible - exchange of gametes and zygotes, exchange of gestational services, and exchange of fetal material - and the major parties of interest, or stakeholders, are identified. The study sketches the liberal, essentialist, and radical contingency theories that shape the debate over the commercialization of reproductive materials and services. The article then attempts to derive some basic governing principles that reflect as much common ground as possible amongst these various normative perspectives, while recognizing that complete reconciliation is impossible. Taken together, these principles are designed to reflect a strategy of constrained commodification, where commercialization or commodification, that is, financial remuneration, plays a relatively neutral role in the utilization of reproductive materials and services. In light of these principles, the article concludes by sketching legal and regulatory regimes with respect to the exchange of gametes and zygotes, gestational services, and fetal tissue.

Abstract:
After a comparative review of the law on punitive damages in the United Kingdom, Canada and the United States, a review that shows a significant divergence of thinking across these different legal systems, we look more closely at the compensatory, retributive, and deterrence rationales for punitive damages. We show that these different rationales imply different ways of looking at the general puzzle of conjoining a punitive focus on the defendant with a compensatory role for the plaintiff, and so have quite different implications for such first-order issues as the type of conduct addressed and the quantum of damages to be prescribed. We also demonstrate that the different rationales imply very different legal responses at a second-order level of institutional detail, including whether punitive damages should be insurable, whether vicarious liability is appropriate, or whether certain criminal law type procedural protections (e.g., a higher burden of proof) are required. At the conclusion of our analysis we provide a summary matrix of the different implications of all the rationales for both the first and second-order issues. This matrix accounts for why it is generally believed that the law on punitive damages is not now developing in a sufficiently single-minded or coherent fashion. No single legal institution can be responsive to the requirements of all three rationales, and a choice must be made among them. We hope that our analysis helps to inform that choice.

Abstract:
In identifying both enduring and new and emerging issues on the consumer protection reform agenda, this paper follows the helpful taxonomy adopted by the GECD in its survey of consumer protection policies in 21 GECD countries for 1987-1988. The GECD classifies issues under the following six headings: institutional reform; product safety; protection of consumers' economic interests; consumer information and education; redress and complaints facilities; and relations between consumer protection and other aspects of government policy.

Abstract:
In 1998 the Ontario government appointed the Market Design Committee (MDC) with a mandate to design the detailed market rules for the introduction of wholesale competition in the province and to make detailed recommendations to the government and the Ontario Energy Board (the industry regulator) on the implementation of retail competition. This paper summarize some of the key features of the market that the MDC designed. It then identifies the provisional lessons that might be drawn for electricity restructuring initiatives from the Ontario experience to date.

Abstract:
In this Article we emphasize the important role that is played by choice sequences or processes in the determination of policy outcomes. As a positive matter, we show that if choice sequences are not reflected upon seriously, then the final policy outcomes that result from using those processes can be quite arbitrary. Indeed, the diversity of policy choice which we observe in automobile accident law across different state jurisdictions probably reflects this arbitrariness. In place of this arbitrariness, and building as a normative matter on certain results in the theory of public and social choice (particularly those results that recognize the importance for political stability of imposing certain forms of "value restriction" on the values that are inputted into political processes), we propose a non-arbitrary choice sequence for choosing among the various policy options that are typically available in automobile accident compensation law. We argue that the sequence-dependent results of a non-arbitrary choice process are acceptable in a way that the sequence-dependent results of processes that have never been the subject of any theoretical or normative reflection are not.

Abstract:
Section 45 of the Competition Act prohibits price-fixing and other forms of horizontal agreements among rivals by imposing criminal sanctions on parties to arrangements which "unduly lessen competition." The authors argue that there are policy reasons for rethinking the current price-fixing prohibition.

The authors argue that many horizontal arrangements by contract (through agreements among rivals) are similar to horizontal arrangements by ownership (through mergers). In the 1986 amendments to the Competition Act, Parliament removed merger review from the purview of criminal courts and gave the Competition Tribunal jurisdiction over mergers. The authors propose similar amendments to section 45 of the Competition Act, and argue that all horizontal arrangements other than naked price-fixing ought to be subject only to civil review by the Competition Tribunal. Naked price-fixing, they tell us, is always anti-competitive and should therefore continue to attract criminal penalties and remain within the jurisdiction of criminal courts.

Having outlined the appropriate focus of a criminal prohibition, the authors proceed to frame a criminal price-fixing prohibition that will target only naked price-fixing arrangements without at the same time targeting potentially pro-competitive arrangements. Many horizontal arrangements are pro-competitive joint ventures, for example, yet may have the ancillary effect of fixing prices. At the same time, arrangements which purport to be pro-competitive may in fact be naked price-fixing arrangements in disguise.

Since price-fixing prohibitions are central features of competition laws all over the world, the authors undertake a comparative review of the price-fixing regimes in the United States, the European Community, the United Kingdom, Germany, Australia and New Zealand to determine the extent to which those jurisdictions have been able to maintain workable distinctions between naked price-fixing arrangements and potentially pro-competitive arrangements.

From the jurisdictions surveyed, the authors conclude that it is impossible to frame a criminal prohibition against naked price-fixing arrangements which will not, in many cases, target pro-competitive arrangements. The authors therefore propose a new focus to a criminal prohibition. Since most naked price-fixing is covert, the authors propose to make covert arrangements the target of the criminal prohibition. That is, the authors propose to distinguish covert arrangements from overt arrangements, rather than distinguishing naked price-fixing from price-fixing which is ancillary to some pro-competitive objective. The authors propose amendments which would confer immediate immunity from criminal sanctions on parties who notify the Bureau of Competition Policy of their arrangements. Notified arrangements would then be subject only to prospective civil review by the Competition Tribunal. Parties to price-fixing arrangements who do not notify their arrangements to the Bureau would remain subject to criminal penalties.

Abstract:
Multi-disciplinary professional practices (MOPs) involving lawyers, accountants and other professionals, have been the subject of considerable industry study and controversy in Canada and abroad. In this article, the authors evaluate the advantages and disadvantages of MOPs strictly from a consumer welfare perspective. They argue that, although MOP critics' concerns surrounding such issues as solicitor-client privilege, independence, conflicts of interest, and unauthorized practice are valid, they are often overstated and are, in many cases, encountered even today by professionals outside the MDP context. The advantages to consumers of permitting the evolution of such practices would, in any event, significantly outweigh such disadvantages. The authors' analysis provides the background for their specific proposals to facilitate the creation and proliferation of fully-integrated MOPs and an appropriate regulatory framework for such firms emphasizing inter-professional cooperation rather than competition and including inter-professional coordination committees with consumer representation.

Abstract:
Commentators have often Claimed that Canada's competition legislation is among the most economically sophisticated in the world. In large part, this claim is based on the explicit recognition given to efficiency as an overall criterion in the Competition Act (the "Act") (section 1.1) and as a specific criterion in the treatment of mergers. Section 96 of the Act prohibits the Competition Tribunal from making an order against a merger if the proposed merger would bring about gains in efficiency that are greater than, and would offset, any prevention or lessening of competition, provided that these gains would not likely be attained without the merger. A merger involving a substantial lessening of competition that would otherwise indicate a remedy or prohibition under section 92 of the Act may be permitted under section 96.

Unfortunately, application of section 96 and the entire role of efficiencies in merger review has become disturbingly uncertain. The uncertainty lies in the interpretation of the tradeoff implied in the section between the anticompetitive effects of a merger and the efficiencies, such as cost savings, arising from the merger.

A practicing lawyer would reasonably turn to the Competition Bureau for guidance on efficiency-balancing criteria. Merger review by the Bureau is the most important hurdle in practice; only three mergers have been challenged before the Tribunal under the 1986 Act. Bureau statements, however, reveal a bewildering range of positions. This article provides a critical evaluation of the various positions taken by the Competition Bureau.

Abstract:
As the Law Society of Upper Canada's Special Committee on Professional Competence stated in 1978: "Possibly no aspect of the practice of law or for that matter of other professions such as medicine and accounting is of more immediate importance or raises more difficult questions than that of maintaining the competence of the practitioner." I believe that that statement was true then, and remains true today. In this article, I will briefly review a range of regulatory instruments that are available and widely invoked as means of providing quality assurances in the legal and other professions.

Abstract:
The introduction of HIV (human immunodeficiency virus) into the blood systems of many different countries, developed and developing, during the late 1970s and early 1980s and its subsequent transmission to recipients of blood transfusions and blood products has precipitated a public health catastrophe of proportions unparalleled, at least in developed countries, in recent decades, leaving thousands of people dead or facing the inevitability of premature and agonizing death, and a legacy of fatal illness and financial and emotional devastation for many of their families and loved ones. This catastrophe has not only provoked critical scrutiny of the performance of existing institutional actors in a number of countries, but also has led, in some countries, to consideration of changes in the institutional framework for the collection and distribution of blood.

The main purpose of this paper is to contribute to the ongoing debates over institutional re-design by attempting a comparative analysis of the actual performance of different blood systems in different countries in response to the HIV crisis. We examine the performance of blood collection, distribution and fractionation systems in seven developed, industrialized countries: Australia, Canada, France, Germany, Britain (excluding Scotland, which operates its own bloodsystem), Switzerland, and the United States. Our aim is not to make an overall judgment about the performance of these systems, either against efficiency or other criteria, but to understand the capacity of these systems to respond to a crisis that threatened the integrity of the blood supply.

As the title of this Article suggests comparative study of institutional performance with respect to the crisis of HIV-infected blood is also relevant to the more general debate in the political economy literature over whether and how institutions matter to policy outcomes. Generally speaking the political economy debate over whether institutions matter has focused largely on comparative governmental performance. And to date, most official and scholarly inquiries into the performance of national blood systems with respect to the risk of HIV infection have focussed on perceived weaknesses in each country's system. By broadening the focus to seven countries, similar in stages of economic development and in many cases with like cultural values, we hope to be able to identify patterns in structure and performance that will enable students of political economy to infer more robust institutional prescriptions. The HIV-infected blood case study also offers the possibility of broadening this analysis to examine not just the comparative performance of governmental institutions across a range of countries, but also the comparative performance of both governmental and private (either non-profit or for-profit) institutions. Moreover, as will become clear when we assess and attempt to explain differences in performance, some of the institutional choices that may matter most to real world outcomes have not been well captured by the focus on profit vs. non-profit provision.

Abstract:
This paper addresses the role of formal contract law and contract enforcement institutions in economic development. Its inquiry is consequentialist: whether the existence of a formal contract law and enforcement regime significantly contributes to economic growth in developing countries. We also address the related issue of the extent to which it is possible for a state to adopt an effective formal contract law and enforcement regime, without also adopting a particular type of political regime. Our inquiry further addresses the extent to which political theorizing about the role and structure of private law (in our case, contract law) applies universally, or whether such theorizing is highly contingent on context-specific political, cultural, and social values and practices. As the paper elaborates, two different hypotheses emerge from the literature. One takes the view that strong formal contract law and enforcement mechanisms are indispensable to economic development, while the other contends that much economic development is realizable through informal contracting mechanisms. To test the validity of these two hypotheses, we provide a critical review of existing literature, including literature on two cases of great contemporary development significance: the so-called 'China Enigma' and the 'East Asian Miracle.' In both of these cases, high rates of economic growth have been achieved, often in the absence of strong formal contract law and enforcement regimes. We argue that at low levels of economic development informal contract enforcement mechanisms may be reasonably good substitutes for formal contract enforcement mechanisms, but become increasingly imperfect substitutes at higher levels of economic development involving large, long-lived, highly asset-specific investments or increasingly complex traded goods and services, especially outside repeated exchange relationships. In the case of the 'China Enigma,' for example, even if the lack of effective formal contract enforcement has not been a major impediment to economic development to date (although some commentators contend otherwise), weak rule of law surely carries other significant costs in a more complete conception of development which embodies other non-instrumental values. We conclude that on one of the central questions in contemporary development debates - do good institutions cause growth, or does growth cause good institutions? - the answer, in the context of contract enforcement mechanisms, is a nuanced one.

formal contract law and enforcement, economic development, 'China Enigma', 'East Asian Miracle'

Abstract:
Export subsidies provide a good example for discussing some interesting questions underlying the debate over reforming the current system of remedies for violations of World Trade Organization (WTO) obligations. If the purpose of trade agreements is to maximize economic welfare, discussion of violations of WTO obligations will need to take account of the form of both the requirement and the remedy. The requirement could take the form of a standard or a rule and may be more or less complex. The remedy could take the form of a property rule or a liability rule. Further, both the level and the form of the remedy will be important. Each type of violation needs to be examined separately to determine whether flexibility to adapt to new circumstances should come through the requirement or the remedy. In the case of export subsidies, the current simple rule prohibiting export subsidies is likely optimal but the remedies which support this rule need to be reformed. They are currently both over-inclusive and under-inclusive and do not provide sufficient flexibility or incentive for efficient adjustment. This article considers some alternative remedies for export subsidies and discusses the general lessons for the debate on remedies for violations of WTO obligations.

Abstract:
Limited electricity restructuring has occurred in Canada. This chapter focuses on the electricity sector restructuring initiatives of Canada's most populous province, Ontario, examining the province's restructuring process and experiences, the aftermath of re-regulation and the lessons learned. It also reviews briefly the restructuring experience in the province of Alberta. Both provinces altered their restructuring plans after experiencing unexpected price increases. In particular, the Ontario experience illustrates the importance of political commitment and how restructuring policies can be reversed quickly when a government fears a political backlash.

Abstract:
This paper examines the short-lived electricity sector restructuring initiative of the province of Ontario, Canada's largest province. In May 2002, following years of planning and consultation Ontario opened its retail and wholesale electricity markets to competition. The summer of 2002 saw retail prices reach levels that consumers had never previously encountered. By December 2002, the provincial government froze retail electricity prices, covering approximately half of Ontarios electricity consumption. While the weather played a significant role in driving prices higher during the summer of 2002, other factors also played a major role. The other factors reviewed in this paper fall into two categories. The first category consists of market design problems, such as market rules (e.g., trading arrangements) and market structure (e.g., the degree of competition in the generation sector). The second category covers political economy problems, in particular the lack of political will to allow retail prices to reflect wholesale prices and to address effectively structural problems in the sector. Finally, this paper examines some of the new restructuring initiatives being pursued by the recently elected provincial government of Ontario as the province continues to struggle to bring order to its electricity sector.

Abstract:
In the New Institutional Economics literature, the existence of economically dominant ethnic minorities seems to be treated as a mere symptom of the more fundamental problem of institutional underdevelopment - a symptom likely to disappear once institutional reforms designed to facilitate free contracting by private actors are adopted. By contrast, in recent writings Amy Chua has argued that in many contexts reforms of this sort are likely to perpetuate or even increase the economic dominance of certain ethnic minorities. She goes on to argues that this dominance exists in tension with democratization as, under certain conditions, it will provoke, maintain or exacerbate intense ethnoeconomic resentment among the disadvantaged majority. In Chua's view this suggests the need to adopt policies that address the economic, political and ideological roots of the tension between markets and democracy.

This Article critically examines both the positive and the normative components of the claims put forward by Chua and proponents of the New Institutional Economics. The Article endorses Chua's claim that this phenomenon might persist under free market conditions. A number of factors might serve to perpetuate disparities in entrepreneurship under free market conditions, including: differences in preferences or abilities, invidious discrimination (either in favour of or against the minority group), differential endowments of social capital, or increasing returns to scale in production. Moreover, in part because some of these factors are inter-related, ethnic disparities in entrepreneurship may be a self-reinforcing phenomenon. Therefore, deficiencies in formal institutions are not the sole, and may not even be the primary, reason why economically dominant ethnic minorities have been and will continue to be observed in developing countries.

The balance of the Article assesses whether attempting to alter the ethnic composition of a developing society's entrepreneurial class can be justified on the basis of economic efficiency, distributive justice or the desire to avoid ethnic conflict. If ethnic disparities can be attributed to mistaken beliefs about groups' productive abilities, poor legal institutions, or the absence of physical infrastructure, some form of corrective state action might be efficient. However, it will be inefficient to remove disparities in entrepreneurship that are attributable to significant differences in productive abilities and preferences. It is also unclear whether social justice demands a focus on the elimination of ethnic disparities in entrepreneurship. Opportunities to engage in entrepreneurship should not be regarded as valuable in and of themselves, but rather because they represent opportunities to increase individuals' wealth and autonomy. Finally, it is unclear whether there is a causal connection between dominance in entrepreneurial activities per se and levels of inter-ethnic conflict. For all these reasons, policymakers in developing countries with ethnically homogeneous elites should generally refrain from focusing on disparities in entrepreneurship and instead strive to reduce disparities (ethnic and otherwise) in access to a broader range of economic opportunities.

Ethnic conflict

Abstract:
This paper canvasses the theoretical and empirical literature concerning the role that legal institutions play in development. The first part outlines six influential theoretical perspectives on development and their implications for the relationship between law and development. The second part surveys the relevant empirical literature. There is surprisingly little conclusive evidence that reforms in particular substantive areas of law such as property law, contract law and human rights law have been effective in furthering development, however conceived. There is however, evidence that enhancing the quality of institutions that enact, administer and enforce laws can have positive and significant effects. This suggests that the current wave of legal reforms must be situated in a broader agenda of public sector reform if they are to avoid the problems that led to the demise of the "law and development" movement of the 1960s.

Law and development