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Congress' Temptation to Defect: A Political and Economic Theory of Legislative Resolutions to Financial Common Pool Problems

Abstract

In this Article, Professor Block-Lieb describes the political process for enactment, repeal, and revision of the federal bankruptcy laws. The predominant metaphor in bankruptcy scholarship compares the creditors of a financially distressed debtor to fishers in a pond they own in common, and justifies the Bankruptcy Code as legislation needed to resolve this common pool problem. The Article combines game theory with public choice and interest group theories in a model of legislative resolutions to common pool problems. It identifies the weaknesses inherent when rules of liability are enacted to resolve common pool problems, generally, and financial common pool problems, specifically; and distinguishes the pressure for their enactment or repeal from the pressure for their revision. The Article concludes by reviewing the legislative history of the federal bankruptcy laws from 1800 to date, and finds that, to a large extent, this experience supports the proposed model.

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39 Ariz. L. Rev. 801 (1997)

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Authors

Susan Block-Lieb (Seton Hall University)

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