The System of Influence in Making Corporate Bankruptcy Law - Essay Example

Outline/Paper Topic General Topic: The System of Influence in Making Corporate Bankruptcy Law Subtopics: I. Theories of Financial Law-Making A. Professional Dominance B. Party Dominance C. State Dominance D. Financial Dominance II. The Advocate of Reforms A. Influential Professional Groups B. Government Agencies III. Contour of Influence Conclusions Abstract This essay discusses several major theories in social sciences that aim to determine and clarify which players have the greatest chance of dominating, and which political efforts are most probable to prevail on the route to legislative endorsement. The essay concludes with a conceptual perspective on theories and systems of influence in corporate bankruptcy lawmaking. Student’s Name Course Title Name of Professor Date of Submission The System of Influence in Making Corporate Bankruptcy Law Introduction Lawmaking has a political makeup: it builds up political actors in a manner that limit or widen the array and kinds of concerns raised to bear on matters in politics. The political makeup arises from compromises among actors who aim for involvement in the process of decision-making, among private groups, policymakers, government units, public officials, and between actors that have overlapping or opposing motives (Carruthers & Halliday 1998, 63). The authority to shape such political motives considerably establishes the outcomes’ shape and composition. This essay discusses the influence of political structures in the making of corporate bankruptcy law. Theories of Financial Lawmaking Social scientists and political analysts have formed four main theories pertinent to financial lawmaking, namely, professional dominance, state dominance, party dominance, and financial dominance (Carruthers & Halliday 1998, 88). According to Feran (1999), totally, or openly, each of these penetrates a certain political actor group against the other and assumes that the results of lawmaking trigger that actor’s authority. Professional Dominance Procedural lawmaking in law and financial has features favorable to professional dominance. The authority of professions will be at its peak under several conditions. Professions wield larger authority when they can achieve special procedural influence. By persuading legislators that a subject matter should be categorized as the suitable area of a specific expert, conflicting critical plans are controlled (Pomerleano & Shaw 2005, 23). Moreover, professions will gain more influence when they can work out actual policy concerns into a technical language. At this point the task is to persuade legislators that policy reforms are actually a procedural concern that must not bother political interest bodies (Pomerleano & Shaw 2005, 23-24). It is an issue of translating an actual concern into a technical issue. In addition, professions could strengthen their control when they can convince political officials that professional suggestions represent core cultural ideals (Carruthers & Halliday 1998, 90). As stated by Carruthers and Halliday (1998), ideals of economic development, life preservation, liberty, and competence—all give professions a certain level of ideological protection from excessive inspection or cynical assessment. Professions also wield more power when states have insufficient resources and are vulnerable, or when states have only private specialists as the expert units on which to rely on. Given that making of bankruptcy law is occasional, apparently non-ideological, and very procedural (Ferran 1999, 172) it seems to be an area specifically favorable to professional dominance. Party Dominance Contrary to concepts of an unseen financial force steering political decisions is the notion that political ideology, directed and organized through political parties, will triumph in a legislation that is non-technical in nature (Ferran 1999, 188). The party dominance theory states that a strong party principle, with firm electoral backing, and practicing several of the major components of financial legislation, will determine the results (Carruthers & Halliday 1998, 92). Without a party principle, or its significance to the conditions of a draft bill, the dominance trend will rest somewhere else. State Dominance Current state theories challenge the notion that government agencies and bureaucrats create policies because of duty to their political superiors or put into effect policies without concern for either the bureaucrats’ interests, or the vital needs of the organizations and departments wherein they work. State authorities and organizations have their own concerns (Pomerleano & Shaw 2005, 27). These may overlap with the interests of external interest groups, political parties, and policymakers, but such is usually rare. If party ideology implies economizing state organizations or state privatization, government units and civil servants have strong reasons to challenge, amend, and even stop proposals that will require failure of civil service occupations, government functions, or position (Pomerleano & Shaw 2005, 27-29). Hence, it should be expected that financial lawmaking that intimidates public authorities or government units, or that offer grand prospects, will create active involvement and organization of state authorities. Financial Dominance According to Carruthers and Halliday (1998), just as corporate control premises differentiate between bank control, wherein banks interfere frequently and invasively into the operations of the company, and financial dominance, where in banks wield a remote influence that only becomes obvious in periods of emergency, so too financial legislation premises differentiate between the ultimate, direct, and general control of finance assets over reform procedures and more distant participation on instances of utmost risk to financial groups. Each of these four financial legislation theories puts emphasis on the influence of a specific actor or groups of actors. Each fresh point of political argument sets off hidden conflicts in order for old enemies to once more go to combat along familiar routes employing tattered methods. The Advocate of Reforms As stated by Carruthers and Halliday (1998), the major actors who formed and refined the Bankruptcy Code of 1978 are the influential professional groups and government agencies. Influential Professional Groups Professionals saturated every aspect and phase of the reform efforts. They took part in three key functions (Carruthers & Halliday 1998, 94): (1) as members of formal bodies, such as the Commission or the legislative subcommittees; (2) as members of professional societies or associations; and as experts at large. Three major bodies led the participation of professionals in the ratification of the 1976 Code, namely, the Commercial Law League, the National Conference of Bankruptcy Referees, and the National Bankruptcy Conference (Carruthers & Halliday 1998, 94). Government Agencies The state has an immediate concern for bankruptcy law. First, bankruptcy law influences economic progress, the extent of commercial risk-taking, and the credibility of the credit economy. Second, the state has a limited economic concern for bankruptcy since it normally carries a great concern for social security fees and taxes that have not been accomplished by a bankrupt firm (Pomerleano & Shaw 2005, 44). Furthermore, according to Ferran (1999), government bodies can also question work areas. Contour of Influence The textual discussion of the main actors in bankruptcy reforms maintains the argument that there were two differing contours of influence. First, professional experts saturated every phase and every component of the reforms. Represented by the National Bankruptcy Conference, bankruptcy scholars, judges, and legal representatives created a quite exclusive body of roughly twenty people, diversely embodying their professional affiliations and their selves (Carruthers & Halliday 1998, 98). Second, there were non-professional bodies that took part actively, most particularly, the financial sector. They, as well, were involved quite extensively and through a number of stages of the process (Carruthers & Halliday 1998, 98). It was not the debtor that prevailed, but the creditor benefit. The gap between political players with international against specific forms of participation in legislative reforms shapes up disparities in the political form either can carry out. International actors have greater opportunity for compromise, or levels of autonomy, on any particular subject matter, for they have a ‘list’ of numerous concerns among which they can carry out exchanges (Ferran 1999, 260). Specific and single-sided actors, on the contrary, have no kind of autonomy. They could have several narrow means of packaging several separable components of their limited motives, yet they are much more limited in the choices they possess for reciprocal exchange. Unavoidably they seem more inflexible and perhaps they more rapidly have route to crude political influence, pressured vetoes, and so on. Habitually they seem unfair and inflexible (Ferran 1999, 260). Since global actors can give in or compromise on specific instances, they can bargain with more flexibility and hence appear more sensible. Conclusions This essay has shown substantiations that the political and market influence of players in corporate bankruptcy legislation are not the same. Influential players in the market, like those in the financial sector, could not consistently convert market hegemony into political outcomes. Paradoxically, power in the market can set off a political reaction. On the surface, weak points in the market can be balanced by political power. Two Suggested Areas of Further Research This discussion of the theories of and main actors in corporate bankruptcy lawmaking is very limited in terms of their actual applications and functions. Hence the author suggests these two following issues for further research: (1) the macro-economic setting that establishes the array of alternatives accessible to legislators; and (2) the patterns of dominance and form of influence in the United States. Bibliography Carruthers, Bruce & Terence Halliday. Rescuing Business: The Making of Corporate Bankruptcy Law. Oxford: Oxford University, 1998 (pp. 63-149). Print. Pomerleano, Michael & William Shaw. Corporate Restructuring: Lessons from Experience. Washington, DC: World Bank, 2005 (pp. 11-58). Print. Ferran, Eilis. Company Law and Corporate Finance. Oxford: Oxford University Press, 1999 (pp. 154-275). Print. Read More