Hostname: page-component-745bb68f8f-v2bm5 Total loading time: 0 Render date: 2025-01-20T21:51:36.513Z Has data issue: false hasContentIssue false
  • English
  • Français

The role of path dependence in the development of US bankruptcy law, 1880–1938

Published online by Cambridge University Press:  01 August 2007

BRADLEY A. HANSEN  and
MARY ESCHELBACH HANSEN
BRADLEY A. HANSEN
Affiliation:
Department of Economics, University of Mary Washington, Virginia, USA. Email: [email protected]
MARY ESCHELBACH HANSEN
Affiliation:
Department of Economics, American University, District of Columbia, USA
Get access Rights & Permissions [Opens in a new window]

Abstract:

We illustrate mechanisms that can give rise to path dependence in legislation. Specifically, we show how debtor-friendly bankruptcy law arose in the United States as a result of a path dependent process. The 1898 Bankruptcy Act was not regarded as debtor-friendly at the time of its enactment, but the enactment of the law gave rise to changes in interest groups, changes in beliefs about the purpose of bankruptcy law, and changes in the Democratic Party's position on bankruptcy that set the United States on a path to debtor-friendly bankruptcy law. An analysis of the path dependence of bankruptcy law produces an interpretation that is more consistent with the evidence than the conventional interpretation that debtor-friendliness in bankruptcy law began with political compromises to obtain the 1898 Bankruptcy Act.

Type
Research Article
Information
Journal of Institutional Economics , Volume 3 , Issue 2 , August 2007 , pp. 203 - 225
Copyright
Copyright © The JOIE Foundation 2007

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Alexander, Gerald 2001, ‘Institutions, Path Dependence, and Democratic Consolidation’, Journal of Theoretical Politics, 13: 249–270.CrossRefGoogle Scholar
Bebchuk, Lucien and Mark, Roe 1999, ‘A Theory of Path Dependence in Corporate Ownership and Governance’, Stanford Law Review, 52: 127–170.CrossRefGoogle Scholar
Bensel, Richard 2000, The Political Economy of American Industrialization, 1877–1900, New York: Cambridge.CrossRefGoogle Scholar
Boshkoff, Douglas G. 1982, ‘Limited, Conditional and Suspended Discharges in Anglo American Bankruptcy Proceedings’, Pennsylvania Law Review, 69: 69–125.CrossRefGoogle Scholar
Brewster, Stanley F. 1924, Legal Aspects of Credits and Collections, New York: The Ronald Press.Google Scholar
Bridges, Amy 2000, ‘Path Dependence, Sequence, History, Theory’, Studies in American Political Development, 14: 109–112.CrossRefGoogle Scholar
Calder, Lendol 2000, Financing The American Dream: A Cultural History of Consumer Credit, Princeton: Princeton University Press.Google Scholar
Cover, John 1933, Business and Personal Failure and Readjustment in Chicago, Chicago: University of Chicago Press.Google Scholar
Crouch, Colin and Henry, Farrell 2004, ‘Breaking the Path of Institutional Development? Alternatives to the New Determinism’, Rationality and Society, 16: 5–43.CrossRefGoogle Scholar
David, Paul A. 1994, ‘Why Are Institutions the Carriers of History?: Path Dependence and the Evolution of Conventions, Organizations and Institutions’, Structural Change and Economic Dynamics, 5: 205–20.CrossRefGoogle Scholar
David, Paul A. 2001, ‘Path Dependence, its Critics, and the Quest for “Historical Economics”’, Pierre, Garrouste and Stavros, Ioannides (eds), Evolution and Path Dependence in Economic Ideas: Past and Present, Cheltenham: Edward Elgar, pp. 15–40.CrossRefGoogle Scholar
Davis, Lance E. and North, Douglass C. 1971, Institutional Change and American Economic Growth, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Demsetz, Harold 1967, ‘Toward a Theory of Property Rights’, American Economic Review, 57: 347–359.Google Scholar
Donovan, William J. 1931, Administration of Bankruptcy Estates, Washington, DC: GPO.Google Scholar
Douglas, William O. 1933, ‘Wage Earner Bankruptcies: State vs. Federal Control’, Yale Law Journal, 42: 591–642.CrossRefGoogle Scholar
Douglas, William O. and Marshall, J. Howard 1932, ‘A Factual Study of Bankruptcy Administration’, Columbia Law Review, 32: 25–59.CrossRefGoogle Scholar
WhitneyDunscomb, S. Dunscomb, S. 1893, Bankruptcy: A Study in Comparative Legislation, New York: Columbia College.Google Scholar
Fortas, A. 1933, ‘Wage Assignments in Chicago. State Street Furniture Co. v. Armour & Co’, The Yale Law Journal, 42: 526–560.CrossRefGoogle Scholar
Grief, Avner and David, Laitan (forthcoming), ‘A Theory of Endogenous Institutional Change’, American Political Science Review.Google Scholar
Hansen, Bradley 1997, ‘The Political Economy of Bankruptcy Legislation’, Essays in Economic and Business History, 15: 155–171.Google Scholar
Hansen, Bradley 1998, ‘Commercial Associations and the Creation of a National Economy: The Demand for a Federal Bankruptcy Act’, Business History Review, 72: 84–113.CrossRefGoogle Scholar
Hathaway, Oona A. 2001, ‘Path Dependence in the Law: The Course and Pattern of Legal Change in a Common Law System’, Iowa Law Review, 86: 601–665.Google Scholar
Liebowitz, S. J. and Margolis, Stephen E. 1990, ‘The Fable of the Keys’, Journal of Law and Economics, 33: 1–25.CrossRefGoogle Scholar
Liebowitz, S. J. and Margolis, Stephen E. 1995, ‘Path Dependence, Lock-In, and History’, Journal of Law, Economics, and Organization, 11: 204–226.Google Scholar
Lowell, John 1899, ‘Bankruptcy’, in Lalor, John J. (ed.), Cyclopedia of Political Science, Political Economy and the Political History of the United States, New York: Maynard, Merill and Co.Google Scholar
Mahoney, James 2001, The Legacies of Liberalism: Path Dependence and Political Regimes in Central America, Baltimore: John Hopkins University Press.Google Scholar
Meech, S. P. 1928, ‘Economic Aspects of Installment Selling’, The Journal of Business of the University of Chicago, 1: 60–82.CrossRefGoogle Scholar
Moss, David A. 2002, When All Else Fails: Government as the Ultimate Risk Manager, Cambridge, MA: Harvard University Press.Google Scholar
National Association of Credit Men (various years), Credit Manual of Commercial Laws, New York: National Association of Credit Men.Google Scholar
National Convention of Representatives of Commercial Bodies 1889, Second Session of the National Convention of Representatives of Commercial Bodies, St. Louis: Nixon Jones.Google Scholar
Nehemikis, Peter R. 1933, ‘The Boston Poor Debtor Court: A Study In Collection Procedure’, Yale Law Journal, 42: 561–590.CrossRefGoogle Scholar
RegisNoel, F. Noel, F. 1925, “The Bankruptcy Law As It Effects Credit’, Georgetown Law Journal, 13: 131–155.Google Scholar
North, Douglass C. 1990, Institutions, Institutional Change and Economic Performance, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
North, Douglass C. 2005, Understanding the Process of Economic Change, Princeton, NJ: Princeton University Press.CrossRefGoogle Scholar
North, Douglass C. and Thomas, Robert 1973, The Rise of the Western World: A New Economic History, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Olmstead, James Monroe 1902, ‘Bankruptcy A Commercial Regulation’, Harvard Law Review, 15: 829–843.CrossRefGoogle Scholar
Olney, Martha 1991, Buy Now, Pay Later: Advertising, Credit, and Consumer Durables in the 1920, Chapel Hill: University of North Carolina Press.Google Scholar
Palmer, J. P. 1917, ‘A Poor Man's Receivership. Discussing a New Nebraska Statute’, The Central Law Journal, 83: 99–100.Google Scholar
Pierson, Paul 2000, ‘Increasing Returns, Path Dependence, and the Study of Politics’, American Political Science Review, 94: 251–267.CrossRefGoogle Scholar
Prendergast, William A. 1905, ‘An Enduring National Bankruptcy System the Inherent Ally of Commerce’, Bankers Magazine, September: 380–387.Google Scholar
Sadd, Victor and Williams, Robert 1933, Causes of Bankruptcies among Consumers, Washington, DC: GPO.Google Scholar
Sadd, Victor and Williams, Robert 1932, Causes of Commercial Bankruptcies, Washington, DC: GPO.Google Scholar
Skeel, David 1998, ‘Bankruptcy Lawyers and the Shape of American Bankruptcy Lawyer’, Fordham Law Review, 67: 497–522.Google Scholar
Skeel, David 1999, ’The Genius of the 1898 Bankruptcy Act’, Bankruptcy Developments Journal, 15: 321–341.Google Scholar
Skeel, David 2001, Debt's Dominion: A History of Bankruptcy Law in America, Princeton: Princeton University Press.CrossRefGoogle Scholar
Tabb, Charles Jordan 1991, ‘The Historical Evolution of Bankruptcy Discharge’, American Bankruptcy Law Journal, 65: 325–371.Google Scholar
Tabb, Charles Jordan 1995, ‘The History of Bankruptcy Laws In the United States’, American Bankruptcy Law Review, 3: 5–41.Google Scholar
Tabb, Charles Jordan 1999, ‘A Century of Progress or Regress: A Political History of Bankruptcy Legislation’, Bankruptcy Developments Journal, 15: 343–381.Google Scholar
US Department of Justice (various years), Annual Report of the Attorney General of the United States, Washington, DC: GPO.Google Scholar
US Bureau of the Census 1997, Historical Statistics of the United States, Colonial Times to 1970, Electronic edition edited by Carter, Susan B. et al. [machine-readable data file], Cambridge: Cambridge University Press.Google Scholar
US Bureau of the Census (various years), Statistical Abstract of the United States, Washington, DC: GPO.Google Scholar
US Bureau of Foreign and Domestic Commerce 1931, Domestic Commerce Series No. 54, Causes of Business Failures and Bankruptcies of Individuals in New Jersey in 1929–30, Washington, DC: GPO.Google Scholar
US Senate 1932, Strengthening of Procedure in the Judicial System, Sen. Doc. No. 65, 72nd Congress, 1st Session, Washington DC: GPO. (Also known as the Thatcher Report.)Google Scholar
Veblen, Thorstein 1973, The Theory of the Leisure Class, Boston: Houghton Mifflin.Google Scholar
Veblen, Thorstein 1968, Imperial Germany and the Industrial Revolution, Ann Arbor: University of Michigan Press.Google Scholar