Date of Award
Doctor of Philosophy (PhD)
At the end of the nineteenth century, American corporate law changed
into its modern, permissive form.
Emerging first in \NJ[,] the new laws allowed corporations to own each
other, and using them capitalists solved their collective action
problem of ruinous competition, reorganizing American industry in a
great merger wave.
The most famous explanation for why the law changed, the efficiency argument,
has been refuted by economic sociologists and political scientists who instead
argue that the law changed because of the combination of powerful actors
pursuing their interests and contingent conditions such as state fiscal
crises. From this critical juncture, the law developed path-dependently.
But these conditions did not occur in \NJ[,] and the actual
development of the law there, with several anti-incumbent changes
in a relatively short period, do not fit with a path-dependent
Neither does the simultaneous adoption of both permissive corporate
laws modeled on \NJ[']s, and their reaction, restrictive antitrust
laws, across the United States.
To address these problems, this dissertation develops a theoretical
framework in which institutional change is determined by how the
institution serves the interests of incumbents in adjoining fields.
In its first part, this dissertation applies this framework to the
development of corporate law in \NJ over time, comparing 28 failed and
successful attempts to change the law, 1830-1913.
In its second part, it tests this framework on the adoption of
permissive and restrictive corporate laws across the United States, 1889-1915.
Using both qualitative and quantitative methods on new datasets of bills, votes,
laws, politicians, corporations, and taxes, this dissertation finds that how
existing law served political and economic incumbents' interests, by limiting
competition and providing tax revenues, explain its change and persistence.
The power and interest relationships among classes are reflected back
into the state through taxation, mediated by state
capacity. Politicians sit like both spider and fly in a web of
dependencies among actors and policies.
When the web is tight, institutions persist, when it loosens, change
Jerneck, Alexander, "Taxing Conditions: The Fiscal interest of the State and the Rise of the Modern Corporation in America" (2015). Publicly Accessible Penn Dissertations. 1068.