Institutional Choice in an Economic Crisis
David A. Skeel Jr.
University of Pennsylvania Law School; European Corporate Governance Institute (ECGI)
Wisconsin Law Review, vol. 2013, p. 629
U of Penn, Inst for Law & Econ Research Paper No. 13-10
Neil Komesar’s work has transformed our understanding of how institutional analysis should be done. There is one very surprising omission from the breathtaking range of Komesar’s oeuvre, however: he has never directly applied his framework to crises. My aim in this Article is to advance, at least in a small way, our understanding of institutional choice during and after an economic crisis. Part I very briefly revisits the recent crisis, emphasizing its institutional dimensions. Part II identifies three puzzles posed by a crisis for standard Komesarian analysis. Part III then shows how Eric Posner and Adrian Vermeule’s executive-centered theory partially but not completely addresses these puzzles. Part IV offers an expanded institutional analysis of a crisis, focusing in particular on exogenous features of institutional interaction such as the possibility that Congress will respond to executive overreaching during a crisis by enacting legislation that ties the executive’s hands in its wake, and the effect that courts’ framing of their decisions during a crisis can have on the subsequent development of the law.
Number of Pages in PDF File: 21
Keywords: Neil Komesar, comparative institutional analysis, markets, courts, legislatures, financial crises, majoritarian preferences, the role of the executive branch, the role of the judicial system, bailouts, Eric Posner, Adrian Vermeule, Bear Stearns, Lehman Brothers bankruptcy, Chrysler, General Motors
JEL Classification: H81, K19, K29
Date posted: April 6, 2013 ; Last revised: September 3, 2013
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