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41. Smart Regulation in a Post-COVID-19 Economy

Author:
Committee for Economic Development of the Conference Board
Publication Date:
04-2020
Content Type:
Policy Brief
Institution:
The Conference Board
Abstract:
The COVID-19 pandemic has put regulation issues front and center in every American’s life. Within a few short weeks, 41 out of 50 states have issued stay-at-home orders,1 and regulations governing many other aspects of all Americans’ public lives are now imposed because of COVID-19. Among a long list of constraints, nonessential businesses, many of them small businesses, have been required to cease or sharply curtail their services. Schools have been closed, access to parks and outdoor spaces has been restricted, and other staples of all Americans’ public lives, including large gatherings, have been restricted. On the other hand, and more than ever before, Americans have seen other regulations lifted rapidly, particularly in the heavily regulated health care sector. Constraints on testing, laboratories, out-of-state health care workers, vaccine R&D, telemedicine, ventilator production, and infrastructure expansion have been relaxed. Even more extensive relief has addressed the unprecedented havoc that COVID-19 has unleashed on American society, public health, and the economy. Restrictions on work at home, online courses at colleges and universities, the transport of food and alcohol, and hours truck drivers can be on the road are all being lifted or relaxed to meet the demands of the crisis. Restrictions on the production of hand sanitizer and the amount that the Transportation Security Administration (TSA) allows passengers to carry on airplanes have also been relaxed.
Topic:
Regulation, Economy, Business, and COVID-19
Political Geography:
North America and United States of America

42. Land Title Insurance in India: Lessons from U.S. Regulatory Approaches

Author:
Anirudh Burman
Publication Date:
08-2020
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
India’s insurance market for land titles is still in the early stages of development. Borrowing from the U.S. model, here’s what Indian insurers and officials alike can do to keep the market flourishing and protect consumers. The poor quality of land title records in India is a significant impediment for growth and urbanization. Bad land title records result in excessive litigation, property disputes, and cases of fraud. This in turn affects the cost and certainty of transactions that involve land and real estate. While the Indian government has been operating a land record modernization program for over a decade, progress has been slow. This paper accordingly proposes that land title insurance be encouraged to reduce losses in land transactions. Title insurance will also provide buyers of land and real estate a mechanism for mitigating the risks that arise from such transactions. Insurance products cannot be launched in India without prior registration with the insurance regulator, the Insurance Regulatory and Development Authority of India (IRDAI). So far, IRDAI has registered some title insurance products, and it is now in the process of developing a general regulatory framework for the product. Once in place, this regulatory framework will determine the development of the title insurance market and consequently its ability to solve issues related to land transactions. Therefore, it is important that the regulatory framework adopted be suitably tailored to the unique characteristics of land title insurance as a product. In addition, the regulatory framework must give due regard to the incipient nature of the market in India. While title insurance is a new product in India, it is widely used in the United States. India’s regulatory framework can therefore be better informed by an examination of title insurance regulation in the United States. This is especially so given that insurance in the United States is determined at the state level, so different states follow different models of regulation. This diversity provides an opportunity to better understand how title insurance should be regulated given the local environment.
Topic:
Urbanization, Regulation, Land, and Insurance
Political Geography:
South Asia, India, North America, and United States of America

43. Driving Growth and Innovation in the Food Industry: Lessons from the Automobile Industry’s CAFE Standards

Author:
Hank Cardello
Publication Date:
12-2019
Content Type:
Working Paper
Institution:
Hudson Institute
Abstract:
Poor dietary patterns are the leading cause of noncommunicable disease in the U.S., and they are creating a significant burden on the economy and on quality of life. Diet-related disease is having a large impact on health outcomes among children and adults, leading to increasing healthcare costs, which has led to a focus on regulatory measures to curb the rising tide. Regulation has largely focused on the U.S. food system, as it provides low-cost, calorie-dense foods, which have been linked to a substantial increase in calories in the food supply and excessive calorie consumption. Substandard eating habits are linked to a number of health conditions, such as diabetes and obesity. Diabetes rates in the U.S. have more than tripled since 1970, and nearly 40 percent of adults are categorized as having obesity. The cost to the healthcare system is significant, and a myriad of health issues are linked to its pervasive spread in the country. Particularly concerning are increasing obesity rates among children, amidst continued public health interventions at the local, state, and national levels. Public health officials continue to advocate for additional regulation to shift dietary patterns. Policy efforts have ranged from voluntary commitments by the food industry to government-driven regulations such as taxes on sugar-sweetened beverages and package-labeling provisions. Most of the government regulatory approaches to date have been piecemeal, typically led by local government bodies and focusing on a specific type of food or beverage for taxation, or tending to address a particular component, such as food package labeling. For example, Berkeley, CA passed a sugar-sweetened beverage tax in 2014, and the FDA has mandated changes to food labels to increase transparency about calories and added sugars. This paper seeks to open the discussion on a broader policy approach to reduce excessive consumption of calories, sugars, saturated fats, and sodium, which are linked to conditions such as diabetes, obesity, cardiovascular disease, and certain cancers. It will do this by exploring Corporate Average Fuel Economy (CAFE) standards, an automobile industry “cap and trade” regulatory model.
Topic:
Economics, Food, Governance, Culture, Regulation, Economic Growth, Innovation, Public Health, Society, and Obesity
Political Geography:
North America and United States of America

44. New risks to global financial stability

Author:
Hung Tran
Publication Date:
10-2019
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The post-2008 financial regulatory reform has strengthened the banking system, bringing the bank-generated liquidity expansion under control. However, central-bank liquidity has been growing significantly for more than a decade, and financial mediation has moved from banks to non-bank financial institutions, and from lending to capital-market transactions. This new system has created new financial imbalances and distortions and pose new areas of vulnerability that require appropriate policy responses. In “New Risks to Global Financial Stability” author Hung Tran, a nonresident senior fellow at the Atlantic Council’s Global Business & Economics program, assesses the global financial system weaknesses and outlines steps to promote financial stability. Tran updates a framework, first developed by the Committee on the Global Financial System, to recommend policy responses along three lines of defense: prevention of excess liquidity; strengthening domestic policy measures; and cooperative provision of central-bank liquidity.
Topic:
Regulation, Finance, Economy, Business, and Macroeconomics
Political Geography:
Canada, North America, and United States of America

45. Too Big to Fail U.S. Banks’ Regulatory Alchemy: Converting an Obscure Agency Footnote into an “At Will” Nullification of Dodd-Frank’s Regulation of the Multi-Trillion Dollar Financial Swaps Market

Author:
Michael Greenberger
Publication Date:
06-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
The multi-trillion dollar market for, what was at that time wholly unregulated, over-thecounter derivatives (“swaps”) is widely viewed as a principal cause of the 2008 worldwide financial meltdown. The Dodd-Frank Act, signed into law on July 21, 2010, was expressly considered by Congress as a remedy for the deregulatory problems, in that market, that led to the crash. The legislation required the swaps market, subject to U.S. regulation, to comply with a host of business conduct and anti-competitive protections, including that the swaps market be fully transparent to U.S. financial regulators, collateralized, and capitalized. The statute also expressly provides that it would cover foreign subsidiaries of big U.S. financial institutions if their swaps trading could adversely impact the U.S. economy or represent an attempt to “evade” Dodd-Frank.
Topic:
Regulation, Finance, Banks, Commodities, and Derivatives
Political Geography:
North America and United States of America

46. The Subversion of Shareholder Democracy and the Rise of Hedge-Fund Activism

Author:
Jang-Sup Shin
Publication Date:
07-2018
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
This paper explains how hedge-fund activists are exerting power over corporate resource allocation far in excess of the actual voting power of their shareholdings. The power of these “minority-shareholding corporate raiders” derives from misguided regulatory “reforms” carried out in the 1980s and 1990s in the name of “shareholder democracy”. Sanctioned and overseen by the Department of Labor (DOL) and the Securities and Exchange Commission (SEC), these reforms include the introduction of compulsory voting by institutional investors and proxyvoting rule changes that greatly facilitated hedge-fund activists’ aggregation of the proxy votes of institutional investors. In addition, the introduction of the 1996 National Securities Markets Improvement Act (NSMIA) that allowed hedge funds to draw funds from institutional investors effectively with no limit also played an important role in the rise of hedge-fund activism. The paper concludes with policy proposals to rebalance value creation and value extraction by rebuilding the engagement and proxy voting system including (1) making it mandatory for shareholders to submit justifications in shareholder proposals on value creation or capital formation of corporations concerned; (2) removing voting as a fiduciary duty of institutional investors; (3) introducing differentiated voting rights that favor long-term shareholders; and (4) making it mandatory for both shareholders and management to reveal to the public what they discussed in engagement sessions.
Topic:
Economics, Regulation, Finance, Investment, Shareholder Democracy, Hedge Funds, and Value Extraction
Political Geography:
North America and United States of America

47. Accountability for Armed Contractors

Author:
Ian M. Ralby
Publication Date:
01-2015
Content Type:
Journal Article
Journal:
Fletcher Security Review
Institution:
The Fletcher School, Tufts University
Abstract:
On 16 September 2007, the accountability of private armed contractors became a global concern. A team of armed guards from the US company Blackwater Worldwide, operating on a US State Department contract, opened fire that day in Baghdad’s Nisor Square, killing seventeen Iraqi civilians and injuring an additional twenty. It took more than seven years before four of the individuals responsible were ultimately convicted of either first degree murder or voluntary manslaughter by a jury in a U.S. Federal District Court. A fifth member of the Blackwater team had previously pleaded guilty to manslaughter.[1] The initial lack of consequences and the slow speed of justice provided the watchful world with strong evidence that armed contractors operate in a zone of legal twilight, devoid of accountability. ​ The rise of private armed contracting was one of the most distinctive operational developments of the wars in Iraq and Afghanistan. Erik Prince, founder of Blackwater, famously stated: “Our corporate goal is to do for the national security apparatus what FedEx did to the postal service.”[2] Throughout both conflicts, the hiring policies of several Western governments, particularly those of the United States, helped Blackwater and numerous other companies move toward that goal. By December 2008, for example, 69% of the United States’ total force in Afghanistan was comprised of private contractors, roughly 15% of which were armed.[3] While there are no reliable statistics on the size of the global private armed security industry, there is little doubt that it has grown and contracted with the surge and decline of Western engagement in armed conflict. New conflicts on the horizon, however, suggest the possibility of a resurgence of the industry, reigniting concerns about accountability. The proliferation of private armed security companies has coincided with a proliferation of initiatives aimed at developing accountability for the industry. Numerous codes, standards, mechanisms and proposals – developed by governments, international organizations, civil society groups, private companies, trade associations, individuals, academics and multi-stakeholder bodies – have sought to address different issues surrounding armed contractors. Most of them, however, have been developed in response to incidents that already occurred. This reactive approach to accountability, while useful for addressing past problems, may leave the industry exposed to future problems. In other words, a code, standard or mechanism set up to prevent another Nisor Square incident may be very effective in doing so, but may fail to prevent a different and even more worrying incident in the future. This article begins with a brief overview of the most credible accountability initiatives, suggesting that the resulting collection forms a patchwork, rather than a framework for governing the conduct of armed contractors. The analysis then focuses on the process of selecting contractors, with a particular emphasis on the US Government. While cost has been a key factor in determining selection, the various initiatives discussed have made it possible for accountability and quality to be added as essential metrics. Ultimately, however, the failure of the accountability initiatives to remain current, much less forward-looking, means that the objective determinants of ‘accountability and quality’ may not be fit for purpose as the US and other Western powers begin to engage the services of armed contractors for assistance in new conflicts...
Topic:
Security, War, Governance, Military Affairs, Regulation, and Accountability
Political Geography:
Afghanistan, Iraq, Middle East, and United States of America

48. Internet Freedom and Human Rights

Author:
Daniel Joyce
Publication Date:
04-2015
Content Type:
Journal Article
Abstract:
This article considers whether the Internet has become so significant, for the provision of, and access to, information and in the formation of political community and associated questions of participation, that it requires further human rights protection beyond freedom of expression. In short, should Internet freedom be configured as a human right? The article begins by considering the ubiquity of the Internet and its significance. A wider historical view is then taken to understand Internet freedom in terms of its lineage and development from earlier debates over freedom of expression and the right to communicate, through to the recognition of the significance of an information society and the need for Internet regulation on the international plane. The current debate over Internet freedom is then analysed with particular focus given to Hillary Clinton’s speech on Internet freedom and its subsequent articulation by Special Rapporteur Frank La Rue. The concluding part introduces the critical work of Evgeny Morozov and Jaron Lanier to an international law audience in order to deepen the debate over Internet freedom and to point to the concept’s limitations and dangers. It is too early to say whether a ‘right to Internet freedom’ has achieved universal recognition, but this article makes the case that it is worth taking seriously and that Internet freedom may need its own category of protection beyond freedom of expression.
Topic:
Human Rights, International Law, History, Regulation, Internet, and Freedom of Expression
Political Geography:
Europe, Global Focus, and United States of America

49. Transnational Civil Society and the Consumer-friendly Turn in Financial Regulation

Author:
Lisa Kastner
Publication Date:
08-2013
Content Type:
Working Paper
Institution:
Max Planck Sciences Po Center on Coping with Instability in Market Societies (MaxPo)
Abstract:
The literature on financial regulation has typically emphasized the role of the powerful financial industry in shaping regulatory outcomes. However, capture theories cannot explain the prominence of financial consumer protection in post-crisis reform agendas. By contrast, this paper argues that, despite their collective action disadvantage, a polymorphous network of civil society organizations was able to gain momentum after the financial crisis and to influence the financial reform process. In this policy window, where decision-makers were looking out for an alternative source of expertise, a transnationally connected civil society network successfully raised the issue of consumer protection on reform agendas in tandem with public entrepreneurs and on the back of a popular backlash against big finance. This argument will be explored through a comparative study of the impact of transnational pressures on policy-makers in Europe and the US in the immediate aftermath of the crisis. In the conclusion, the paper discusses the substance of the financial reforms that have been undertaken.
Topic:
Civil Society, Economics, Regulation, and Finance
Political Geography:
Europe and United States of America

50. International Evidence on Government Support and Risk Taking in the Banking Sector

Author:
Luis Brandao-Marques, Ricardo Correa, and Horacio Sapriza
Publication Date:
08-2013
Content Type:
Working Paper
Institution:
Board of Governors of the Federal Reserve System
Abstract:
Government support to banks through the provision of explicit or implicit guarantees affects the willingness of banks to take on risk by reducing market discipline or by increasing charter value. We use an international sample of rated banks and find that government support is associated with more risk taking by banks, especially prior and during the 2008-2009 financial crisis. We also find that restricting banks range of activities ameliorates the link between government support and bank risk taking. We conclude that strengthening market discipline by reducing bank complexity is needed to address this moral hazard problem.
Topic:
Governance, Regulation, Risk, and Banking
Political Geography:
North America and United States of America