Institutionalizing Creative Destruction: Predictable and Transparent Bankruptcy Law in the Wake of the East Asian Financial Crisis

The Typical Tools for the Job: Research Strategies in Institutional Analysis

“…The first may be characterized as an "imputed effects" strategy that accommodates the troubling fact that most data available to political sociologists are collected at the national level. Consequently, this strategy combines demonstrations of no association between national policies and national-level economic, political, or social factors with the findings of parallel policy developments or convergence across nations (e.g., ; see also Ramirez and Ventresca 1992:56; but see Campbell 2004;Carruthers and Halliday forthcoming). The "imputed effects" strategy builds on a claim about world history: as the world polity has become more elaborated, institutional effects should increase and the explanatory power of national characteristics should decrease.…”

The Challenges of Bankruptcy Reform

“…Policymakers have drawn important lessons from the 1997 East Asia Financial Crisis in which several countries reformed their corporate insolvency laws when existing bankruptcy systems did not allow the corporate sector to rehabilitate during the long term economic recession (Armour and Deakin 2001). When illiquidity spread across the region, South Korea, Malaysia, and Thailand were forced to modify their laws to favor the reorganization of distressed firms, as an alternative to liquidation, including provisions to the laws that added incentives for creditors and debtors to negotiate (Carruthers and Halliday 2007). Indonesia and Thailand also introduced specialized courts to implement bankruptcy procedures (Claessens, Djankov, and Xu 2000).…”

The Construction of a Global Profession: The Transnationalization of Economics

“…This explains why the diffusion metaphor is often insufficient to describe the process of professional transnationalization: market penetration involves not only territorial expansion, but also forces a deep transformation of the local way to do business itself, which may reinforce the foreign professionals' advantage. For instance, if economic laws in East Asia, under International Monetary Fund (IMF) influence (or some other international economic influence, such as large foreign corporations), are being transformed in a way that is consistent with U.S. antitrust or bankruptcy law, American legal firms will obviously have the upper hand in the legal competition that opposes them to European firms for the capture of these local markets, and American law schools will become the natural place where lawyers from the region will look for training (Carruthers and Halliday 2006;Kelemen and Sibbitt 2004). In the example cited above, the American legal profession will have gained its local influence not by competing directly with entrenched local professional elites, but by engaging in what Schumpeter (1975, pp.…”