Daniels, Ronald J.

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1992 - 199922000 - 20031
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Subject: Social Policy ×

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Now showing 1 - 3 of 3
  • Publication
    State Regulatory Competition and the Threat to Corporate Governance
    (2003-01-01) Daniels, Ronald; Alarie, Benjamin
    The subject of this paper is the impact of the new globalized order on the integrity of corporate governance. Corporate governance is the system of laws, markets and institutions that seeks to control and discipline corporate activity in the service of the public interest. Over the last several years, many critics have bemoaned the growing integration of various economic markets across national boundaries because it is seen to lessen the capacity of states to regulate corporate behaviour. Essentially, the claim is that in a setting of reduced barriers to factor and product mobility, corporations are rendered much more effective in their capacity to extract regulatory concessions from host governments, and these concessions have the effect of lowering social welfare. The argument is that in a setting of high international corporate mobility, footloose corporations will relocate their operations to whichever jurisdiction offers the most congenial (meaning least stringent) regulation. In the face of certain corporate migration in response to more stringent regulation, states will have no choice but to refrain from adopting socially optimal regulation. This is because states fear the loss of benefits associated with corporate activity: namely, employment, investment and tax revenue. The effect is an international "race to the bottom" in which states are rendered helpless in countering the effect of heightened corporate mobility.
  • Publication
    Stakeholders and Takeovers: Can Contractarianism be Compassionate?
    (1993) Daniels, Ronald J.
    The issue of what, if any, purchase non-shareholder corporate constituencies (that is, employees, creditors, suppliers, customers, and communities) should have on the discretionary decisions of corporate management has proved to be one of the most durable, if not vexing, issues in modern corporate scholarship. Most recently, the issue has resurfaced in the context of the takeover wave of the 1980s, particularly during the latter part of the decade when control transactions became associated with high levels of leverage. At core, stakeholder advocates were riveted by the asymmetries involved in change-of-control transactions. While target shareholders earned consistent and sizeable returns from these transactions, stakeholders were left in the cold. Indeed, in some cases, control transactions were thought to be capable of inflicting highly focused losses on stakeholders. So severe were these losses that some commentators, were led to conclude it was the gains from opportunistic breaching of stakeholder contracts that motivated the transactions in the first place. As in the past, participants in the stakeholder and takeover debate generally array themselves into two distinct camps: one, which views any judicial or legislative attempt to protect stakeholders from harms not explicitly prohibited by corporate contracts as anathema ('non-protectionists'), and the other, which regards corporate responsibility for stakeholder harms as an innate and natural feature of the system of modern corporate governance ('protectionists'). In a perceptive article, Romano attributes part of the differences among scholars on divisive issues of corporate law to the starkly divergent normative beliefs that underlie each side. For non-protectionists, the underlying normative framework is individualistic liberalism, whereas for protectionists, it is usually communitarianism. Given the gulf that divides these underlying normative views, the hope for a principled and durable resolution to the stakeholder debate is indeed dim.
  • Publication
    Reforming the Reform Process: Privatization in Central and Eastern Europe
    (1992) Daniels, Ronald J.; Howse, Robert
    As communist regimes throughout Central and Eastern Europe have fallen one by one under the weight of economic failure and popular discontent, the task of transforming these countries into stable and vibrant liberal democratic societies has commanded the attention of many Western governments and international organizations. Given the rapid and extremely destabilizing deterioration in the levels of production and employment in each of the Newly Liberalizing Economies (NLCs), economic renewal has become an urgent priority of the transformation process. Initially, the greatest importance was attached to reforms involving stabilization and liberalization of prices, lowering of trade barriers, fiscal restraint, and currency convertibility. Nevertheless, at a relatively early point in the reform enterprise, it became strikingly apparent that extensive micro-economic reforms would also be necessary for the transformation process to succeed. At the core of these micro-economic reforms stands privatization - the policy aimed at "reducing the role of government, or increasing the role of the private sector, in an activity or in the ownership of assets." However, unlike the relatively straight-forward adoption of many of the measures aimed at macro-economic reform, the pace of privatization programs in the NLCs, as measured by the amount of existing assets transferred from the state to the private sector, has been extremely disappointing. In Czechoslovakia, Hungary, and Poland, for instance, there have been very few large-scale privatizations, although recently there have been some impressive results obtained with respect to small-scale privatization. In attempting to identify the sources of delay in the process, Western commentators have attributed the lion's share of responsibility to policy-makers in the NLCs. This line of attack implicitly assumes that the programs devised by Western policy analysts (largely economists) are fundamentally sound, and that it is only the lack of commitment to, or intellectual appreciation of, the rather unassailable case for radical privatization policies that has impeded successful policy implementation. If this assessment is accurate, then the possibilities for hastening the pace of privatization programs are extremely limited. In this article, we advance a rather different explanation for the debilitating delays and uncertainty that have plagued privatization in Central and Eastern Europe. Instead of focusing on implementation difficulties, we argue that the source of the faltering pace of privatization in the NLCs lies within the basic architecture of the programs themselves.