Law and CapitalismWhat Corporate Crises Reveal about Legal Systems and Economic Development around the World

Law and CapitalismWhat Corporate Crises Reveal about Legal Systems and Economic Development around the World

Curtis J. Milhaupt and Katharina Pistor

Print publication date: 2013

ISBN: 9780226525273

Publisher: University of Chicago Press

Abstract

Recent high-profile corporate scandals—such as those involving Enron in the United States, Yukos in Russia, and Livedoor in Japan—demonstrate challenges to legal regulation of business practices in capitalist economies. Setting forth a new analytic framework for understanding these problems, this book examines such contemporary corporate governance crises in six countries, to shed light on the interaction of legal systems and economic change. It debunks the simplistic view of law's instrumental function for financial market development and economic growth. Using comparative case studies that address the United States, China, Germany, Japan, Korea, and Russia, the book argues that a disparate blend of legal and non-legal mechanisms have supported economic growth around the world. It shows that law and markets evolve together in a “rolling relationship,” and legal systems, including those of the most successful economies, therefore differ significantly in their organizational characteristics.