Corporation Nation: Rise and Demise of the American Economic Juggernaut

Abstract:     
The corporate governance breakdowns of the first decade of the 21st century, including the misaligned incentives that helped to cause the crisis of 2008, suggest an urgent need for reforms beyond those mandated by Dodd-Frank. This book offers reform recommendations based on the relatively successful corporate governance system employed by the over 22,000 U.S. corporations formed before the Civil War. Contrary to common belief, the corporate form became important in the U.S. after passage of the Constitution, not after the Civil War, and was largely a domestic product and not an import from Britain. Most early U.S. corporations were well-governed because of a system of checks and balances built into corporate charters, by-laws, and case law. Even partial replication of that system could prevent another round of corporate scandals or crisis-inducing governance breakdowns.

Keywords: corporate governance, policy reform, economic history, financial history, business history, U.S. economic growth and (in)stability

JEL Classification: N11, N21, N61, G30, H10, P12, P16

working papers series