Nov 2, 2026 Rosalind Dixon
Julius Yam’s Judging for Democracy: Principles and Strategies in Hybrid Regimes is a deeply impressive book by a scholar taken far too soon from his family and the global constitutional community. Re-reading the book in its final published form, I was again struck by the intellect, energy and optimism of our late friend Julius Yam; and of the importance of his work and ideas. His analysis is deeply clear eyed and realistic, and yet still fundamentally optimistic. (Pp. 7-8; 73-87.) His account of constitutional judicial review in hybrid regimes is also bound to inform debates on the question for years to come, and in ways that suggest the possibility of a more democratic future for at least some regimes of this kind.
Judging for Democracy explores the role of constitutional courts in protecting and promoting democracy in the distinctive context of a hybrid regime – or a regime that is neither fully democratic nor authoritarian. Specifically, it outlines 5 potential roles courts can play in this context: a referee role, participatory role, quasi-representative role, representation-reinforcing role and educative role. (Pp. 114-26.)
In doing so, the book contributes to a growing body of comparative constitutional scholarship on the role of courts in democratic representation-reinforcement: Stephen Gardbaum calls this the rise of “comparative political process theory” (‘CPPT’); I label it “comparative representation-reinforcing theory” (‘CRRT’). But as Yam himself noted, there is a large gap in the CPPT/CRRT literature on the role of courts in hybrid or authoritarian regimes. (Pp. 4-9.) I explicitly noted this in my own work on Responsive Judicial Review (‘RJR’) and called for scholarship of just the kind Yam provides in the book. (Pp. 18-19.)
Moreover, the book strikes both a balanced and optimistic tone about the role of courts in these settings. Courts, Yam argued, may not always, but can be (to some degree) independent in such settings. (Pp. 4-6, 46-53.) They can also deploy a range of strategies that allow them to maximize the chances of successful democratic protection and promotion, including strategies that adjust the breadth, timing, tone and narrative arc of their decisions, to the relevant political context. (Pp. 173-90.) Notably, Yam argues that courts should make these decisions with both democratic and authoritarian audiences, and considerations of principle and prudence in mind. For Yam, this means reasoning in an orthodox legalist manner, but then asking whether the political risks of a decision favour some form of prudential softening or adjustment – in order (to use a phrase that Sam Issacharoff and I have used in this context) for a court and the democratic constitutional order “to fight another day” (Pp. 158-72.)
The book provides a highly skilled and nuanced summary of these techniques which add to works by Erin Delaney, Yvonne Tew, David Landau and myself on this topic. That existing work, however, is focused on consolidated and fragile democracies rather than hybrid regimes; and for this reason alone, Yam’s analysis of judicial strategy is valuable for those interested in CPPT/CRRT.
Yam also canvases strategies that courts may be able to use – beyond their decisions – to promote their perceived legitimacy among both democratic and authoritarian audiences (chapter 7). This is an extremely valuable contribution that lays the foundation for the next generation of work on this topic, such as that currently being undertaken by Dr. Daniel Bogea at UNSW.
My only wish is that Julius could have been around to see the the interest and appreciation his book has generated. We owe his supervisors and colleagues, Nicholas Barber and Cora Chan, a great debt for bringing us the opportunity to read the final manuscript in print.
Had Julius been here, I would also have liked to ask him three questions – in the interests of building the kind of robust CPPT/CRRT for hybrid regimes, which he so fervently sought to develop.
First, can a theory of this kind really rest on the relatively thin definition of democracy he adopts, following Tom Ginsburg and Aziz Huq? That definition emphasises: “periodic free and fair elections; the protection of first-generation or liberal rights such as freedom of speech, assembly and association; and the rule of law”. (P. 18) It is, in this sense, similar to David Landau and my concept of “democratic minimum core”, which holds that at minimum, democracy consists in a commitment to: (i) regular, free and fair multi-party elections, (ii) political rights and freedoms, and (iii) a set of institutional checks and balances capable of upholding (i) and (ii).
But I wonder: is that definition sufficient to sustain the kind of educative and participation-enhancing role that Yam envisages for courts? Or do we need at least a somewhat thicker – more deliberative, participatory or rights-based – account of democracy? This kind of account is a necessary part of a more comprehensive understanding of democracy that scholars like Roverto Gargarella believe could benefit from a more robust CRRT theory that emphasizes democratic participation.
Second, I wanted to ask Julius more about his approach to case selection, and what informed the choices of Hong Kong SAR, Pakistan and Uganda as his focus. They are all hybrid regimes, but some seem more authoritarian than others. Was this deliberate? In other words, are they an application of what I call a semi-diverse cases principle? It seems that the answer Yam gives is yes (Pp. 10-14), but I wanted to hear more about this thinking in this context.
For instance, they are all jurisdictions influenced by the common law tradition. Does that matter in any way? Does it, for example, provide judges with a way in which to reconcile a democracy-protection role with accepted modes of legalist or formalist reasoning focused on the protection of common law rights and freedoms? And what does that mean for the relevance of the theory to civil law countries in the hybrid regime category?
Third, I wondered if Julius had any further thoughts on the factors most likely to drive the success of democracy protection in hybrid regimes, beyond the factors that the court itself can control (i.e., its strategic choices)? He is deliberately cautious about making overly strong claims about empirical success. His focus is on showing the possibility of democracy promotion in hybrid regimes, and on providing normative guidance to courts and other actors seeking to achieve this goal. (Pp. 9-10.) But he clearly has some intuitions about the factors likely to inform success.
In some cases, for instance, a hybrid regime may affirmatively support a court’s semi-representative role, as a means of shoring up support among a particular powerful or economic interest group. Members of the regime may also have personal or policy interests that mean they support a court upholding certain forms of constitutional “insurance” as part of a referee role.
But there will also be instances where judicial review goes against a regime’s narrow short-term and broader long-term interests, and hence where it is simply a question of whether the decision is within the “tolerance interval” of the regime. (P. 154.) In these cases, then we might ask, what affects that interval? In democracies, scholars generally point to the fragmentation of political power, among branches of government or within parties, or else divisions between elite and popular attitudes.
But what about in hybrid regimes, where the freedom of voters and informal institutional actors to disagree is much less? Is the tolerance interval for judicial review, in this context, related (either positively or inversely) to the strength of the political opposition? Or does it depend on how much a regime relies on foreign capital, or international lenders, and hence the degree of external support for constitutional constraints? There is interesting work on these questions in political science, but more to be done connecting those lessons to CRRT; and refining our answers to account for the full range of comparative experiences in this area.
Yam’s book invites and sets the scene for these questions. And it provides the sense of possibility we all need to have the courage and willingness to answer them. For that, and the ideas it offers, we owe Yam (and of course also Barber and Chan) a great debt of gratitude.
Oct 7, 2026 Hoi Kong
David Dyzenhaus’s The War Against Law: What’s Wrong with Common Good Constitutionalism (hereinafter, The War Against Law) is essential reading for anyone concerned about the state of the rule of law in liberal democracies. Dyzenhaus is one of the world’s most perceptive analysts of how illiberal theories, when implemented by governments, can contribute to breakdowns in the rule of law. In The War Against Law, he argues that the consequences for the rule of law are grave when governments in liberal democracies put into action the theory of common good constitutionalism.
The United Kingdom’s 2024 Rwanda Act (since repealed), and the debates surrounding it, provide the material for the case study that grounds Dyzenhaus’s analysis. He describes the Act as “a statute that removed the judges’ authority to review the executive’s implementation of a statute on the basis of the UK’s legal commitments to international human rights law, commitments that had been firmly embedded in domestic law by Parliament in legislation.” (P. 4.) According to Dyzenhaus, arguments that proponents of common good constitutionalism advanced in favor of the legislation had the effect of “subvert[ing] the rule of law while claiming to serve its ideal.” (P. 5.)
The War Against Law is a sprawling work. At times, Dyzenhaus engages in sweeping historical, political and philosophical analyses. At other times, he undertakes line-by-line exegeses of academic, political, and legal texts. A brief book review cannot pretend to adjudicate the charges that Dyzenhaus lays against common good constitutionalism nor can it delve into the details of his case study. Instead, this review will lay out the core of Dyzenhaus’s normative case against common good constitutionalism. Dyzenhaus argues that the theory’s proponents seek to transform political orders in which “government is by law” into orders “where government is by unlimited executive power.” (p. 4.) Part I of this review will set out Dyzenhaus’s conception of the rule of law. Part II will explain why he believes that common good constitutionalism’s ideas are anathema to this conception.
I. The Rule of Law According to Dyzenhaus
Dyzenhaus draws on Albert Venn Dicey’s Introduction to the Study of the Law of the Constitution (hereinafter Law of the Constitution) to develop a particular conception of the rule of law and to articulate a specific understanding of the role that courts play in states that abide by the rule of law.
Dyzenhaus summarizes Dicey’s understanding of two foundational principles of the UK constitution: parliamentary sovereignty and the rule of law. According to Dicey, parliamentary sovereignty means that the UK Parliament has the “right to make or unmake any law whatever; and further, that no person or body is recognized by the law of England as having a right to override or set aside the legislation of Parliament.” (P. 58 (quoting Dicey, Law of the Constitution 3–4 (1915)). Moreover, Dicey identified aspects of the rule of law in the UK, two of which are significant for present purposes. The first is that no individual can be punished or “made to suffer in body or goods except for a distinct breach of law, established in the ordinary legal manner before the ordinary Courts of the land.” (P. 65 (quoting Dicey, Law of the Constitution 110 (1915)). The second aspect underscores the role played by UK courts in developing constitutional principles that are essential to maintaining the rule of law. Dicey described this aspect of the rule of law in the following terms: “We may say that the Constitution is pervaded by the rule of law on the ground that the general principles of the Constitution … are with us the result of judicial decisions determining the rights of private persons in particular cases brought before the Courts.” Id.
After laying out the contents of the rule of law and parliamentary sovereignty, Dyzenhaus delineates the relationship between these principles in Dicey’s text. In Dyzenhaus’s reading, Dicey argued that the rule of law structures Parliament’s role as “the ultimate source of law” (P. 64) in the UK constitutional order. To support this interpretation, Dyzenhaus cites to passages in which Dicey claimed that rule of law principles influence how Parliament exercises its law-making powers. One example comes at the end of a discussion of the relationship between the principles of Parliamentary sovereignty and the rule of law. Dicey concluded “that Parliamentary sovereignty has favoured the rule of law, and that the supremacy of the law of the land both calls forth the exertion of Parliamentary sovereignty, and leads to its being exercised in a spirit of legality.” (P. 179 (quoting Dicey, Law of the Constitution 273 (1915)).
Based on his interpretation of Dicey, Dyzenhaus argues that the rule of law includes certain principles that mandate respect for rights, including an individual’s right to demand judicial oversight of executive branch decision-making. Dyzenhaus argues that since the rule of law requires that an official only punish an individual or deprive them of a legal interest for “a distinct breach of law” (P. 65), courts must be able to assess whether, in a given instance, an official acted “on the basis of an authority grounded in law.” (P. 168.) In Dyzenhaus’s view, the individual’s right to demand this kind of judicial assessment is “presupposed by commitments intrinsic to the legal order, a right without which one could not claim that there was either legal order or the rule of law.” (P. 168.) Dyzenhaus further notes that for Dicey, the courts’ interpretive role in a rule of law state is institutionally unique. Because, as Dicey notes, courts interpret laws in light of general principles, they adopt “a mode which would not commend itself to a body of officials, or to the Houses of Parliament, if the Houses were called upon to interpret their own enactments.” (P. 179 (quoting Dicey, Law of the Constitution 273 (1915)). In Dyzenhaus’s account, the relevant principles include “both the principles of the rule of law that will be found in any state committed to governing in accordance with law and the particular principles that the state has committed to over time.” (P. 183.) Dyzenhaus claims that in modern liberal states, the latter kind of principles include protections for fundamental human rights. (P. 66.)
II. Common Good Constitutionalism and the Rule of Law
Dyzenhaus argues that proponents of common good constitutionalism subvert the above conception of the rule of law when they seek to remove from courts the power to assess whether executive action is authorized by law and when those proponents support exercises of executive power that “disapplied principled commitments embedded in the law.” (P. 94.) Dyzenhaus supports his argument with references to texts that articulate common good constitutionalism’s central ideas.
Some passages quoted by Dyzenhaus aver that courts have a closely circumscribed role in the UK’s constitutional order. For example, the website of the Judicial Power Project (which Dyzenhaus associates with proponents of common good constitutionalism) states: “The British constitutional tradition has […] long centred on a disciplined account of the proper scope of judicial authority, which has been rightly subject to the legislature’s final authority to choose the content of the law and not to undermine the executive’s constitutional responsibility to choose how best to act within the scope of its lawful powers.” ( P. 230 (quoting About the Judicial Power Project online: Judicial Power Project)). In Dyzenhaus’s view, common good constitutionalism’s exponents expressed this vision of a circumscribed judicial role when they argued in favor of provisions in the Rwanda Act that removed from courts the power to review executive action.
Dyzenhaus quotes other texts to substantiate his claim that prominent common good constitutionalists advocate for a “legally unlimited executive.” (P. 243.) For instance, he cites to a passage from “Myths of Common Good Constitutionalism” (an article co-written by Conor Casey and Adrian Vermeule), where the authors express a preference for “an executive-led separation of powers … [because] hierarchical bureaucracies with very wide regulatory reach, when commanded by an energetic and motivated political executive, are better suited [when compared with legislatures and courts] to promoting the integration of substantive and moral precepts into legal ordinances.” (P. 204 (quoting Connor Casey & Adrian Vermeule, Myths of Common Good Constitutionalism, 45 Harv. J.L. & Pub Pol’y 103 at 134 (2022)). Dyzenhaus argues that an executive vested with this kind of expansive power “stands outside the legal order with the legitimacy to act at will against the law.” (P. 244.) Here, Dyzenhaus includes in the scope of the term “law” protections for human rights that, as we have seen, are among the legal principles that he believes to be fundamental in modern liberal democracies. Dyzenhaus further argues that some of the “substantive and moral precepts” referred to by common good constitutionalists are inconsistent with these fundamental legal principles. As a consequence, policy proposals that aim to give effect to those precepts (including proposals relating to the Rwanda Act) are contrary to Dyzenhaus’s conception of the rule of law and amount, in his words, to “taking a wrecking ball … to the very tradition of constitutional government.” (P. 187.)
The War Against Law is an ambitious treatise on the rule of law. It would be folly to attempt to condense its far-ranging arguments and observations into the space of a very brief review, and so I have done my best to capture only the essential elements of the book’s theoretical argument. Yet Dyzenhaus has done more than write a work of legal theory. He has sounded a warning that rings perhaps most clearly when he describes the book as “a case study of one country’s part in the drift to authoritarian rule in liberal democracies.” (P. 5.) I leave it to readers to delve into this expansive work and decide for themselves whether the warning needs to be heeded.
Sep 9, 2026 Kathleen Claussen
International standards are ubiquitous in our everyday lives, but the legal literature spends little time analyzing them. The design of USB cables and chargers is a good example, as are paper size, Wi-Fi and Bluetooth specifications, credit card shape, and barcode geometry. Each of these is regulated by an international standard that countries and businesses have adopted across the global marketplace. International travelers sometimes bemoan the lack of an international standard: if your trip takes you to the United Kingdom, France, and Switzerland, you need three types of adapters for your electronics, despite not having traveled all that far.
Although the proliferation of electrical outlet types may not pose immense geopolitical strife, the race to design new standards and get them adopted is different. In their forthcoming work, Soft Power, Hard Standards: How strong is the ‘Brussels Effect’ in international standards?, Lucian Cernat and Hannah Preuss bring new data to analyze who is winning.
Cernat and Preuss’s article is the first to collect and analyze notifications made by governments to the World Trade Organization (WTO) Technical Barriers to Trade (TBT) Committee. Article 2.4 of the WTO TBT Agreement obliges WTO members to adopt into their domestic law international standards except when such standards “would be an ineffective or inappropriate means for the fulfilment of the legitimate objectives pursued.” International standards for purposes of the TBT Agreement are rules, guidelines, or characteristics such as terminology, symbols, packaging, marking or labelling requirements as they apply to a product, process, or production method. Where a WTO member government departs from an international standard in its domestic regulations, it must notify the other WTO members. Cernat and Preuss investigate these notifications to determine who is prevailing in the global arms race to control the metrics and means of everyday life.
The article focuses on what the authors present as a contest for regulatory dominance between the European Union and China and those governments’ interests in Africa. It takes up two sectors of standards as case studies: those that apply to telecommunications equipment and to construction materials. The authors examine all the notifications by African countries in these categories. They find that, with respect to telecom, African countries appear to employ variations on international standards more than half the time, followed by homegrown African standards in 34 percent of notifications. With respect to construction materials, African countries report an African-developed standard in 42 percent of notifications, with European standards coming in second at 26 percent. From these data, the authors conclude that the EU is performing better than China in capturing Africa’s regulatory universe. Put differently, there is a greater Brussels Effect than a Beijing Effect in these sectors.
While these immediate conclusions are no doubt interesting, the greater contribution of the article is that it offers a foundation for exploring far-reaching scholarly and policy questions on international regulatory cooperation—an understudied realm of cross-border lawmaking that fits uneasily into traditional domestic or international law boxes. I offer two such questions for contemplation.
First, Cernat and Preuss’s excavation of these data should force a re-examination as to what ingredients contribute to leadership in global governance, particularly when it comes to transnational commerce. The baseline assumption of the article is that influence can be measured by countries’ adoption of other countries’ standards because national standards, as compared to international ones, are barriers to cross-border trade. Putting this in concrete (or electrical?) terms: It is harder for a company to make a widget in three versions, such as with European, British, or Swiss plugs, than if there were just one universal outlet shape. So, the theory goes, the more countries that adopt a particular plug, the more likely it is that a company will just forego doing business elsewhere and make a widget with that dominant, widespread plug. Now extend this example across all requirements on goods and services that governments put in place.
Consider the global regulatory race in the context of the Trump Administration’s America First Trade Policy. Commentators lament the Administration’s protectionist approach through its imposition of tariffs on global imports. These moves are seen as diminishing the place of the United States as a leader in international commercial governance. But how does the impact of those tariffs compare to international regulatory protectionism that may be present elsewhere? In their presentation of dispersed national standards, Cernat and Preuss remind us that international commercial governance comes in many forms.
Second, the article draws preliminary conclusions about competition between Beijing and Brussels, but the story it presents forces us to ask whether there is fragmentation across regions more generally. For instance, it seems that African countries are taking a bespoke approach to their domestic standards. Further, on one hand, the data suggest that the United States is largely absent from directing regulatory traffic in Africa. On the other hand, one potential explanation for the absence of U.S. standards in the figures is that U.S. regulators are more active in international standardization bodies such as the International Organization for Standardization, the International Telecommunication Union, and the International Civil Aviation Organization. Thus, it could be that the United States may be more influential inside the regulating bodies than they are in convincing other countries to rely on a purely U.S. approach. The authors acknowledge this prospect in passing, but far more work could be done here. (P. 12.)
Deciphering and tracing where national experts are playing their most important roles in the regulatory landscape remains beyond the reach of any one article. Nevertheless, crucial to understanding both domestic and international commercial lawmaking is discerning whether the major cross-border regulatory drivers are more akin to innovation or personalization, or whether they are based on competition and geopolitics. The early harvest of this article is that the waters are muddier than prior work might have theorized.
Cernat and Preuss seek to apply empirical evidence to longstanding uncertainties about international regulatory geopolitics. Their article makes its most meaningful contribution in drawing attention to the available data that can be mined not just for academic purposes, but also for businesses and for governments to understand one another’s regulatory language. Trade law experts spill considerable ink on international tariff policy and its recent troubles, but this article reinforces that policymakers are still in regular communication in their expert exchanges and their attempts to speak the same technical language.
Cite as: Kathleen Claussen,
International Regulatory Geopolitics, JOTWELL
(September 9, 2026) (reviewing Lucian Cernat & Hannah Preuss,
Soft Power, Hard Standards: How Strong Is the 'Brussels Effect' in International Standards?, __
J. World Trade __ (forthcoming 2026)),
https://intl.jotwell.com/international-regulatory-geopolitics/.
Jul 31, 2026 Jaclyn Neo
There is a renewed wave of scholarship in constitutional law emphasising cooperation and trust rather than conflict and distrust. The latter, associated with American-style constitutionalism, has long dominated our imagination alongside American political and social supremacy, but it now seems to be in decline. Instead, new forms of constitutionalism are being examined and theorised, not as flawed or sub-optimal approaches to constitutional design and practice, but as valid and potentially more effective ways of practising constitutional law. Works such as Aileen Kavanagh’s Collaborative Constitution, Stephen Gardbaum’s New Commonwealth Constitutionalism, and various studies on constitutional dialogue or dialogic constitutionalism stress the importance of studying inter-institutional engagements not only as conflictual but also as productive and consensus-building.
In this regard, Rosalind Dixon’s responsive constitutionalism serves as a crucial point of reference in presenting responsiveness, rather than just constraint of power, as an integral constitutional value. In her article, The New Responsive Constitutionalism, Rosalind Dixon extends her exploration of responsiveness as a constitutional value beyond the narrower canvas of her earlier book on Responsive Judicial Review. In this article, she examines how responsive constitutionalism reinforces institutional pluralism by emphasising overlapping institutional authority, multiple access points for institutions, strong institutional checks and balances, and broad remedial power for relevant institutions, including courts. A responsive constitutional model, Dixon argues, would facilitate dialogue among institutions, including between courts and legislators, to strike a balance between constitutional norms that promote rights-enhancing forms of state action and those that limit state action.
For Dixon, responsive constitutionalism treats constitutional democracy as ensuring “an agreed minimum core set of guarantees and institutions” while also allowing for “a thicker set of commitments to rights and deliberations”. (P. 805.) This democratic minimum core refers to the requirement of “regular, free and fair, multi-party elections”, which, in turn, involves a commitment to electoral forms of government, minimum protections for political rights and freedoms, and institutional checks and balances. (P. 803.) What is distinctive is that this thicker set of commitments is not regarded as fixed guarantees but rather as prior commitments to engage in a democratic process to determine their concrete scope and content. This “two-track understanding of democratic constitutionalism” ensures the responsiveness of government decision-making by adopting constitutional structures and procedures likely to “generate democratic policy responsiveness” and constitutional guarantees that can “encourage broader democratic dialogue and deliberation.” (P. 805.) The commitment in responsive constitutionalism is to take both rights guarantees and democratic deliberation seriously, instead of seeing them as fundamentally opposite to one another.
Dixon’s responsive constitutionalism is to be read alongside her responsive judicial review as the latter provides an important pathway to realise the former. Responsive judicial review constructs a variable, context-sensitive approach to judicial review, in which courts impose weaker or stronger forms of review depending on whether there are perceived threats to the democratic minimum core and, therefore, the need to deter abusive constitutional changes, or otherwise. Thus, where there are serious and potentially irreversible risks to electoral and institutional pluralism, Dixon’s theory not only suggests that courts should engage in strong-form review, but also that it would be legitimate for them to do so. In this regard, responsiveness serves as a legitimating value for courts and other institutions. In contrast, responsiveness also counsels restraint; where constitutional or legislative changes were the result of “reasoned legislative deliberation” made in good faith and without “true blind spots” or what Dixon calls the “burdens of inertia’ it may be treated as part of reasonable democratic disagreement, and therefore courts should exercise judicial restraint. (P. 831.)
Beyond this earlier emphasis on courts and judicial review, Dixon’s responsive constitutionalism should be valued for shedding further light on the importance of institutional pluralism as a core feature. According to her, a responsive approach to constitutionalism requires constitutional designers to “create a range of institutions capable of countering various sources of democratic dysfunction and further, that they should create overlapping jurisdiction among these institutions.” (P. 812.) Such separation of powers, by itself, is not new, but the emphasis on how its diffusion can be productive in building crucial agreement and institutional cooperation by ensuring effective public access is important. Dixon’s conceptualisation of responsiveness as a constitutional value therefore provides fresh evaluative and normative frameworks for constitutional drafters, courts, and other constitutional actors. Responsiveness becomes not only a description of how constitutional actors operate but also an evaluative and normative claim about legitimate approaches within constitutional polities committed to both rights and democracy. It would be interesting to see how responsiveness as a general constitutional value could play out in different constitutional regimes.
May 28, 2026 Erin F. Delaney
Earlier this year, Jimmy Lai, a pro-democracy advocate in Hong Kong and a critic of China, was sentenced to 20 years in prison after being convicted of colluding with foreign forces and publishing seditious material in violation of the Beijing-originated National Security Law of 2020. Attentive observers would have seen the writing on the wall for Lai in 2022, when British lawyer Tim Owen KC was not allowed to join the case in his defense.
In his fascinating article, Globetrotting Advocates: Foreign Barristers in Hong Kong Courts, Trevor T.W. Wan explores the history and practice of ad hoc admissions of foreign barristers to the courts of Hong Kong, and in so doing highlights the way in which the practice, once understood as a benefit to Hong Kong, is now seen as presenting an increasing threat to Beijing’s national security agenda.
After presenting a cogent and readable explanation of the technical aspects of the ad hoc admissions scheme, which is now enshrined in the Basic Law, Wan turns to an analysis of how the practice developed and why it has waxed and waned over time. The move to ad hoc admissions began in the 1960s, even though, as Wan explains, “it sounds rather counterintuitive to refer to English barristers as ‘foreign’ barristers at a time when Hong Kong was still a British dependent territory” (P. 880). There were antecedents under Empire, of course, when English barristers saw Hong Kong as a “layover in their intra-imperial practice” (P. 888), and the barristers practicing under criteria for general admission “barely had a practice in Hong Kong” (P. 889). But by the 1960s, the autochthonous Hong Kong bar had started to establish itself, with the territory’s first law school, at the University of Hong Kong, opening in 1969. The embrace of foreign lawyers was, in part, to “stimulate growth of the local Bar through cross-fertilization and competition” (P. 894), but in a manner that also resonates with Richard Abel’s theory of market control in the legal profession, as Wan makes clear (P. 885). Wan explains that the ad hoc admissions scheme “did not spring from a desire to bring in London silks” (P. 890), but rather to reduce their presence—though only so far as to ensure a workable balance between market control and market demand.
Wan’s historical exegesis helps to dispel the plausible assumption that ad hoc admissions were a late-stage attempt to maintain British engagement after the handover from the United Kingdom to China on July 1, 1997. But his careful empirical data also shows that admissions increased for about a decade after handover, as the Special Administrative Region saw benefits in the “maintenance of Hong Kong’s international reputation” (P. 895). Wan’s explanation for this post-handover shift rests in the claim that the logic of market control shifted to a new frame: the politics of foreignness itself.
As he makes clear, post-handover the politics of foreignness were intertwined with “derivative notions of professionalism, impartiality and independence” (P. 895), qualities which together served to maintain Hong Kong’s international reputation, to expand foreign and comparative law citations in court (and in subsequent judgments), and were thought to benefit the local bar through cross-fertilization and mentorship. In one case, the prosecution brought in British barrister David Perry KC to serve as an external prosecutor in “one of the most high-profile corruption trails in Hong Kong’s history” (P. 901). The Chief Judge of the High Court explained: “[T]he reputation and integrity of the executive branch of the Hong Kong [SAR] and its system of governance are at stake” (P. 901).
But as the shadow of the British empire receded, the looming presence of China cast new shade over Hong Kong. Applications since the 2010s have waned. There are various explanations, and Wan’s datasets show that the reasons for opposing (or denying) an application for ad hoc admission have clustered around the case’s lack of complexity, the presence of available local counsel, and the claim that the case would not have an impact on the development of local jurisprudence (P. 921). In this formulation, the rejection of foreign barristers aligns with some elements of the market control model.
Nevertheless, in his final section, Wan presents arguments that it is in fact a different politics of foreignness that has emerged as a driving force for the withering of the regime. New arguments are being presented that these foreign lawyers are a “colonial vestige” (P. 923) who “colonize” (P. 924) the legal system. Wan is skeptical of these claims, given the limited authority of any lawyer to do more than impact a judge’s thinking. And, a certain disingenuity seems to be at work: the government itself (the Department of Justice) retained a British KC in 2023 to oppose a judicial review challenge.
To return to Lai, the opposition by the government to Tim Owen KC’s application for ad hoc admission followed the traditional rationales listed above. The Chief Judge of the High Court did not agree, and the Secretary of Justice was forced to appeal to the Court of Final Appeal. On appeal, the Secretary raised the argument that any ad hoc admission in a National Security Law case would present a problem due to the barrister’s foreignness—and thus the possibility of external interference. The Court of Final Appeal disagreed. But an interpretation was sought by the government from the Standing Committee of the National People’s Congress (the Chinese legislature). The Standing Committee gave the authority to Hong Kong’s Chief Executive to make determinations on ad hoc admissions in national security cases. Tim Owen was not admitted. In Wan’s telling, “the ad hoc admissions regime is now seen as a potential threat to national security” (P. 928), and the admission of foreign barristers can no longer be left to “professional self-regulation and judicial discretion.” (P. 928)
Wan traces the move from a market perspective on foreign lawyers to a politicized set of assumptions about what foreignness implies. As a matter of broader literature, Wan situates his project in conversation with the burgeoning investigations into foreign judges, led by Anna Dziedzic, among others—an exciting and fruitful new area of scholarship. He also highlights the existence of transnational lawyering in Brunei, Fiji, Malaysia and Singapore, and I look forward to the (hinted-at) cross-jurisdictional study. Of course, questions of judicial cosmopolitanism, foreignness, legal transplants and borrowing have long intrigued legal scholars. In this article, there are many fascinating nuggets that touch on all of those topics – as well as extensive empirical work on the broader ad hoc admissions regime and the lawyers who have been admitted through it. It is a rich scholarly intervention with much to Like Lots!
May 14, 2026 Verity Winship
Mariana Pargendler & Olivia Pasqualeto,
Overcoming Corporate Separateness: The Early Origins of Group Liability for Workers and Beyond,
Am. J. Comp. L. (forthcoming 2026),
available at SSRN (Jan. 22, 2026).
In 2024, the Brazilian Supreme Court froze assets of a Starlink subsidiary because of non-compliance by X (formerly Twitter). What do Starlink and X have in common? The Brazilian Supreme Court’s answer was “Elon Musk.” His control, according to the court, made this a de facto economic group (grupo econômico de fato). In many contexts, that answer wouldn’t make legal sense; X and the Starlink sub were separately organized legal entities, whose boundaries are generally respected. Or are they? Read Overcoming Corporate Separateness to find out.
Multinational corporations are often organized into corporate groups or conglomerates, but these groups are not always formally defined in the law. US corporate law orthodoxy is that respecting the formal boundaries between corporations, parents and subsidiaries, etc. offers risk partitioning, predictability, and ease of compliance. Under this account, it makes sense to respect and even encourage organization of separate entities by jurisdiction, by company, by market.
But this article debunks two basic assumptions in US corporate law and comparative law. The first is the factual assumption that the exceptions are narrow. US corporate law and academic literature sometimes treat the formal boundaries as inviolable. This article presents the Brazilian counterexample. As early as 1937, Brazilian labor law imposed liability on parent companies in the employment context , driven by the structure of multinationals. Multinational parents were foreign; workers were Brazilian (P. 8).
Corporate law tends to be siloed, and US corporate law tends to leave employment and labor law out. The article also broadens the analysis by including labor and employment law and related concepts like the single employer or integrated enterprise. The article’s inclusion and analysis of both is a directional move, using frameworks from a system like Brazil’s to broaden what counts as corporate separateness. It is not just “piercing the corporate veil.”
The second assumption that the article challenges has to do with comparative law. The authors provide a concrete counterexample to assumptions about the direction of legal borrowing. A bias of the literature is that it often treats the Global South as the importer of law. But new conceptions of the corporate group originated in the Global South, predating their use in the Global North. See the driving example here, which is Portugal’s adoption of group liability modeled on Brazilian law. “[H]ow Mexico preceded France in adopting first priority of workers’ claims in insolvency” is another example that Pargendler explores in other work (Legal Heterodoxy in the Global South).
Not every reader will follow every twist and turn – or every variant in every studied country. But that’s okay. Not only is the broad debunking worth a read, but the particulars are interesting. Keep an eye out, for instance, for the Canadian octopus and the principle of reality. In sum, a piece with much to offer and well worth a read.
Cite as: Verity Winship,
Corporate Groups & the Principle of Reality, JOTWELL
(May 14, 2026) (reviewing Mariana Pargendler & Olivia Pasqualeto,
Overcoming Corporate Separateness: The Early Origins of Group Liability for Workers and Beyond,
Am. J. Comp. L. (forthcoming 2026), available at SSRN (Jan. 22, 2026)),
https://intl.jotwell.com/corporate-groups-the-principle-of-reality/.
Mar 31, 2026 Sam F. Halabi
For many of us, Derrick Bell’s Race, Racism, and American Law was a fundamental, devastating revelation about the role of law in constructing, reinforcing, and emboldening social institutions and structures that perpetuate and strengthen racism and de facto apartheid. Bell’s sphere was primarily the domestic United States—although of course it was not possible to completely separate the local from the global in 1973 and certainly is not today. Scholars influenced by Bell applied his lessons to other areas of legal research, including, but not limited to, international law. At its origin and continuing today, international law was anchored in racialized paradigms placing at their apex the “civilized” i.e. white and colonial sovereign powers, partially civilized countries like “Siam” and the Ottoman Empire, and “savage” or “barbarian” states comprised of what Frantz Fanon was later to famously describe as “the wretched of the earth.”
International law represents, therefore, an even more focused study of Bell’s precepts, and I welcome this new volume dedicated to this essential nexus of law and justice, Race, Racism, and International Law edited by Devon Carbado, Kimberle Williams Crenshaw, Justin Desautels-Stein, and Chantal Thomas. Featuring chapters from E. Tendayi Achiume and Aslı Bâli, Aziza Ahmed, Adelle Blackett, Christopher Gevers, Wadie Said, and Matiangai Sirleaf, in addition to the editors, the volume provides scholars of international law and racial justice one of the most important resources to date on how the history, agents, processes, and discourse of international law not only entrenched racial oppression as part of imperial global extraction and exploitation, but now sustain and feed this oppression within international legal rules and institutions. As wielders of these forces, the International Criminal Court is just as culpable as the World Trade Organization.
This book is one I like a lot, and I hope others active in the study and shaping of international law do as well. The book is divided into three sections covering “histories and structures”; “peoples, places, perimeters, and powers”; and “critical race theory and international law.” The editors and contributors cover themes, institutions, and essential concepts that advocate a fundamental reorientation of theory and praxis of international law its widest range of subjects—commerce, crime, health, the major neo-liberal economic institutions—toward the perspective and welfare of those it has historically oppressed.
In addition to providing perhaps the most comprehensive volume on the juxtaposition of international law and racial justice (many scholars including myself analyze the socially beneficial and pernicious effects of specific international legal regimes and organizations, but far fewer characterize them in such a specific way), Carbado, Crenshaw, DeSautels-Stein, Thomas and their contributors have offered a thoughtful critique of how essential concepts in international law—for example sovereignty, universal norms, commerce—thread racial inequality throughout the global order. Indeed, Wadie Said brings this point home in a particularly compelling way in his chapter, Race and Politics in International Criminal Law: Case Studies from the Arab World, on how international criminal law itself has absorbed and regurgitated specialized forms of racial oppression against unpopular Arab regimes largely to the detriment of their innocent populations.
Two examples are illustrative. In Matiangai SIrleaf’s chapter, White Health and International Law, she carefully traces how global health law—itself a vestige of so-called “tropical medicine” developed to address the concerns of American and European colonial administrators and their militaries—entrenches “racialized” disease classification and response, not broadly because those diseases maintain a fundamental biological connection to race (of course some diseases and conditions do), but rather signal race as part of the “political, legal, and social privileging and salience given to ailments thought to touch and concern White people.” (P. 203.) Tendayi Achiume and Asli Bali provide a similarly insightful lesson in Critical Race Theory Meets Third World Approaches to International Law, about how scholars in the tradition of “third world approaches to international law” (TWAIL) and critical race theory share perspectives that 1) the formation and force of international law cannot be separated from its imperial and colonial origins and 2) that empire and colonialism are fundamentally racist endeavors that place the capital-accumulating European class at the apex of a contorted and oppressive system of exploitation and territorial control. These scholars and traditions still have much to learn from one another, and Achiume and Bali set an extraordinary stage for doing so, some of which is then provided in Part III.
Carbado, Crenshaw, DeSautels-Stein, and Thomas have undertaken an extraordinarily valuable exercise in using this volume not only to map the pressure points where racial justice principles may better inform the international legal order, but also to expose the ways in which conventional justifications and practices are vulnerable to their piercing and incisive criticisms. As international law struggles as part of the battle ground between violent, racist, fascist territorial expansion on the one hand and those opposed to it on the other, Carbado, Crenshaw, DeSautels-Stein, and Thomas’s volume, and along with it their contributors, will be a go-to resource for those assessing how to move forward both inside and outside the academy.
Cite as: Sam F. Halabi,
Race, Racism, and International Law—Taking Derrick Bell’s Insights to the Next Level, JOTWELL
(March 31, 2026) (reviewing
Race, Racism, and International Law (Devon Carbado, Kimberlé Williams Crenshaw, Justin Desautels-Stein, & Chantal Thomas eds., 2025)),
https://intl.jotwell.com/race-racism-and-international-law-taking-derrick-bells-insights-to-the-next-level/.
Mar 2, 2026 Mathilde Cohen
Julie C. Suk, The Shadow Court: Rescuing Democracy from the Supreme Court (2026).
Julie Suk’s forthcoming The Shadow Court: Rescuing Democracy from the Supreme Court is an invigorating intervention in the long-standing question of how to align constitutional lawmaking in the United States with democratic ideals. Suk’s book moves beyond familiar critiques of the Supreme Court’s judicial supremacy to propose a bold, institutionally imaginative solution: the Shadow Court. What makes this proposal particularly compelling is its comparative lens, drawing on constitutional designs across the world to offer concrete inspiration for reform. In an era when the Supreme Court increasingly dominates the constitutional landscape, Suk invites readers to imagine what constitutional law might look like if citizens, legislators, and other institutions could exercise more democratic influence over its creation.
At the heart of Suk’s project is the conviction that “[i]n a healthy and legitimate constitutional democracy, ‘We the People’ should have supremacy and control over constitutional lawmaking.” The book diagnoses a democratic crisis rooted in the Supreme Court’s concentration of power, much of it facilitated by the Court itself. Suk observes that the Court’s eighteenth-century design, as an Article III judiciary primarily intended for dispute resolution, is ill-suited to serve as the principal constitutional-lawmaker for a twenty-first-century, demographically complex nation. Against this backdrop, The Shadow Court pivots toward institutional innovation rather than incremental reform: it sketches out a new body capable of exercising real influence without formal coercive power, borrowing lessons from shadow cabinets in parliamentary democracies and constitutional courts abroad.
Suk’s comparative perspective is one of the book’s most original contributions. She draws on examples from Austria, Germany, France, Italy, Spain, Colombia, and South Korea to show how constitutional adjudication can foster democratic legitimacy even when the courts lack traditional binding power. As she emphasizes, “Americans can also reach back to some historic peaks of Congress’s role as a constitutional lawmaker” and look beyond national borders to see how other democracies have updated institutions in ways that strengthen citizen influence over lawmaking. This approach reverses the familiar story in which the United States is treated as the model to emulate—or criticize—from afar. Instead, Suk situates it within a global conversation about constitutional design, offering an antidote to the insularity that has at times characterized U.S. constitutional thought.
One of the anchors of Suk’s proposal is the adaptation of the shadow cabinet principle from parliamentary systems. In Britain and other Westminster-style democracies, the political opposition forms a structured and disciplined body that mirrors the government, providing alternative policies and scrutinizing executive power. Suk emphasizes that “[e]ven though they have no formal legal or political power, the practice of shadowing those who do exercise power creates the productive pressure of a constant concrete alternative and a government in waiting.” Her insight is that the United States can borrow this logic to create a Shadow Court that operates as a loyal opposition to the Supreme Court, offering reasoned alternatives and a democratic check on the nation’s primary constitutional “negative” lawmaker, as Hans Kelsen would have said.
The book’s design for the Shadow Court is admirably flexible. Suk suggests a core of nine Shadow Justices who hear the same constitutional controversies as the Supreme Court and issue thoroughly reasoned opinions: “Imagine a body of nine Shadow Justices who hear arguments on the same constitutional controversies and publish judicial opinions that are thoroughly reasoned, without actual legal power to shape the outcome.” By removing the constraint of formal power, Suk envisions an institution capable of cultivating persuasive constitutional reasoning while engaging directly with Congress, the people, and other political actors. In this way, the Shadow Court functions as a living form for concurrence or dissent, where counterarguments are developed by real thinkers for an audience that includes potential decision-makers.
Suk also demonstrates the breadth of possible institutional models, showing how other countries’ experiments with abstract review, advisory opinions, and nonbinding declarations provide lessons for the United States. The book’s discussion ranges from state supreme courts issuing advisory opinions to the United Kingdom’s Human Rights Act courts, illustrating that the accumulation of influence need not rely on formal binding authority. Suk argues that such mechanisms can cultivate “power through persuasive legal analysis and dialogue with the established, more powerful branches of government,” offering a powerful corrective to the Supreme Court’s “Shadow Docket.”
One of the book’s most appealing features is its refusal to settle prematurely on the minutiae of institutional design. Suk leaves open questions about the exact composition of the Shadow Court, term limits, and the method of appointment, inviting further reflection and debate. She also encourages comparative study of constitutional courts in multiple other countries, highlighting that Americans can learn from a wide variety of institutional experiments. In sum, The Shadow Court is a rare book that combines theoretical rigor, historical sensitivity, and practical imagination. Suk demonstrates that comparative law is not merely an academic exercise but a source of actionable inspiration for democratic reform. Her Shadow Court offers a framework in which dissenting voices and citizen engagement can coexist with existing institutions, creating a more robust and accountable version of constitutionalism. This is a book that will stimulate conversation among scholars, practitioners, and anyone concerned with the survival of American constitutional democracy.
Feb 4, 2026 Martin Gelter
Royhan Akbar, Nathanial Mangunsong, & Dan W. Puchniak,
The Abolition of Independent Directors in Indonesia: Rationally Autochthonous or Foolishly Idiosyncratic, __
Am. J. of Compar. L. __ (forthcoming, 2026), available at
SSRN.
Over the past 30 years, comparative corporate law scholarship has grown into a worldwide industry with a substantial volume of publications. For an English-speaking scholar, it has become easy to follow debates in (mainly Western) Europe, Japan, China, India, and Brazil, just to name a few hotspots of the field. Indonesia is often overlooked in the literature, which is surprising, given that it is the fourth largest country in the world by population and its status as a Member of the G20 and an Upper-Middle-Income economy (in fact, the seventh largest economy by GDP/PPP).
Royhan Akbar, Nathanial Mangunsong, and Dan W. Puchniak’s forthcoming article, The Abolition of Independent Directors in Indonesia: Rationally Autochthonous or Foolishly Idiosyncratic, is one of very few filling this gap. What at first glance seems like a peculiar development—the abolition of the requirement for publicly traded companies to have independent directors—reveals many parallels to other countries upon closer investigation, which allows the authors to make important points that reveal structural features of comparative corporate governance beyond the country.
As the article describes, Indonesian company law has its roots in the Dutch colonial period. The 1994 codification shows some residual influence of this legal origin, as it reaffirmed what some might call a two-tier board structure comprising a board of directors and a separate board of commissioners. Following the Asian financial crisis of the late 1990s, the IMF pushed Indonesia toward corporate governance reforms, which included independent directors. These were enshrined, partly as recommendations and partly as requirements, in the Indonesian Corporate Governance Code and the Jakarta Stock Exchange (JSE)’s listing rules in the early 2000s. After the repayment of the IMF loans, the Corporate Governance Code began to omit the recommendation in 2006, while the JSE’s requirement of a single independent director was abolished in 2018.
The development illustrates several historical patterns in comparative corporate governance. In the early 1990s, Indonesia’s “legal origins” seemed to be its most important driving force. In the late 1990s, under pressure from the IMF, the country’s evolution illustrates the period of convergence in corporate governance, with independent directors being a significant example of the adoption of classic elements of “good” corporate governance from a US and UK perspective. Convergence is soon followed by divergence in the form of reversion to its old patterns.
Another remarkable point is that independent directors were always a legal transplant that did not provide a good fit for the Indonesian corporate governance system, given its economic and legal institutions. First, independent directors emerged in response to the agency problem between managers and shareholders, prevalent under conditions of dispersed ownership in the US and the UK. Here, outsiders not beholden to management may be able to monitor on behalf of outside investors. In a system where controlling shareholders are typical, as in Indonesia (and most countries around the world), any director will find it difficult to assert their independence against a controlling family or government entity that completely dominates corporate affairs. In this situation, the institution may remain an attempt to market a corporate governance system to international investors, or to alleviate outside pressures from an international institution with a problematic one-size-fits-all perspective, such as the IMF or World Bank. For this phenomenon, the article uses the term “halo signaling,” which was coined by Dan Puchniak in earlier work.
The article also highlights that independent directors have all but disappeared from Indonesia since 2018, but that “independent commissioners” remain. In this respect, the authors provide useful comparisons to other “two-tier” systems. Notably, Dutch and German supervisory boards are more powerful than the Indonesian board of commissioners, due to their more strategic role and their authority to elect and remove management board members. Chinese and Japanese boards (in the latter case sometimes called “board of auditors”) have a more limited role focused on specific aspects of monitoring, which is why they are a better comparison for the Indonesian system, where the members of both boards are elected by shareholders. Parts of the literature consider the “board of auditors” model prevailing in Italy, Portugal, and Japan to be a third model besides the classic “one-tier” and “two-tier” ones. By contrast, the Anatomy of Corporate Law describes it as a modified one-tier model. Tellingly, the German discussion on independent directors was always focused on the supervisory board, and the issue of independent members of the management board was never even considered. It would probably be most appropriate to analogize the supervisory board in a two-tier system to the board of directors in the US one-tier system, and the management board to corporate officers.
Akbar et al.’s paper, therefore, leaves a lot of food for thought. In addition to these larger systemic points, it provides a wealth of detail on Indonesian corporate governance on the ground, informed by a set of semi-structured interviews conducted by the authors with independent commissioners. The paper concludes with a set of thoughtful recommendations for possible reforms in Indonesia. These focus on strengthening the representation of minority shareholders, policing related-party transactions, and mitigating the influence of politics.
Overall, the article is a highly rewarding read for anyone interested in comparative corporate governance. It opens a window into a relatively little-discussed part of the world, and at the same time, manages to raise important points of general significance for the field.
Cite as: Martin Gelter,
Finding Familiarity in the Unknown? Independent Directors in Indonesia, JOTWELL
(February 4, 2026) (reviewing Royhan Akbar, Nathanial Mangunsong, & Dan W. Puchniak,
The Abolition of Independent Directors in Indonesia: Rationally Autochthonous or Foolishly Idiosyncratic, __
Am. J. of Compar. L. __ (forthcoming, 2026), available at SSRN),
https://intl.jotwell.com/finding-familiarity-in-the-unknown-independent-directors-in-indonesia/.
Nov 19, 2025 Jedidiah Kroncke
Popular dissatisfaction with economic life has emerged as a growing challenge to countries across the globe. Magnified by growing inequality, this dissatisfaction stems from a sense that dominant economic institutions can no longer be relied upon to provide citizens with predictable and meaningful economic lives. Yet, even as nations have rejected left- and right-wing incumbents alike, there has remained only episodic engagement with one of the longest-standing alternative traditions for governing economic activity with a proactively social vision: cooperatives. In his article Investor Shares in Cooperative Financing: A Comparative Legal Analysis, Ville Pönkä provides a revealing primer on the challenges of promoting cooperatives through an incisive comparative analysis of “investor shares” as a means for cooperatives to raise capital.
For those less familiar with the literature on cooperatives, Pönkä provides a compact and effective introduction while outlining its interface with modern comparative corporate governance scholarship. This linkage is inherently valuable, as the particular nature of cooperatives has often led them to fall outside the analytical focus of both corporate and labor law scholars—although their conceptual and normative concerns significantly overlap with those of cooperative governance. And while, for practical and path-dependent reasons, the study of corporate governance has become one of the richest and most sophisticated areas of comparative legal analysis, it still largely omits cooperatives. As such, Pönkä’s survey of the statutory regimes governing cooperative forms is notable as it draws on diverse national examples—especially valuable given that much of the empirical work on cooperatives focuses on domestic audiences in non-English-speaking countries. Moreover, it does so while bringing the issue into direct conversation with classic and contemporary issues in corporate governance on a global scale.
For many, the term “cooperative” may evoke broad, utopian sentiments. But Investor Shares provides a clear and precise overview of the technical definitions and internal logics by which modern cooperatives are governed and regulated, even given their organizational variability. Pönkä emphasizes the fundamental principle of membership-based ownership in cooperatives—whether of the producer, consumer, financial, or worker variety. What further distinguishes cooperatives is their orientation to “maximize utility instead of profits.” (P. 343.) Here, “utility” is an amalgam of the direct services provided to member-owners and other social values—often open to quite heterogeneous member self-definition.
Pönkä provides this accessible background review to explore the tensions that arise when cooperatives seek capital from non-members. Among his many catholic studies of economic forms, Henry Hansmann noted that most modern companies could be characterized as “capital cooperatives,” whose organizational diversity was driven by their means of managing sources of internal and/or external investments. Pönkä outlines how formal “cooperatives” face similar challenges but are traditionally constrained by their commitment to have members be both the primary contributors of capital and co-equal participants in enterprise decision-making.
Such capital contributions are sometimes referred to as “member shares” but differ in their characteristics from those typically associated with shares of large public companies. Pönkä outlines the distinctive characteristics of traditional cooperative shares, including fixed governance equality among members regardless of capital contribution, free redeemability (but at par value), limited rights to dividends, and restricted transferability. Even here, there is significant intranational and international heterogeneity among cooperative regimes. Pönkä’s comparative expertise is on display as he effectively integrates the governance concerns these characteristics generate across quite different national regulatory frameworks. He also highlights how these attributes have driven innovations among individual cooperatives and the associations dedicated to their promotion. Another virtue of Investor Shares is that Pönkä situates investor share reforms within the longer trajectory of cooperative regulation, whose global and historical scope many may not initially appreciate—even if directly addressed or promoted in many nations’ constitutions.
The divergence of these characteristics with shares in non-cooperative enterprises presents the “capital constraint paradox.” (P. 344.) Cooperatives routinely require capital infusions for the same reasons as non-cooperative enterprises. However, they often face difficulties accessing debt or equity markets, for whom their non-normative organizational differences are off-putting, either due to general unfamiliarity or a lack of predictable returns on investment. It is this “paradox” that has increasingly pushed many countries to enable cooperatives to offer “investor shares” that deviate from traditional cooperative principles. Such investor shares stand out less among the many experiments in varying how cooperative profits are distributed, but do immediately introduce complications regarding how the divergent characteristics of these shares interact with cooperative governance.
The comparative breadth of Investor Shares reveals how diverse investor share reforms have been. Many countries have allowed cooperatives to freely design new governance arrangements on a purely ad hoc basis, such as the adoption of hybridized forms enabled by Limited Cooperative Associations statutes in several U.S. states. Other countries still mandate limits to investors’ governance participation, or outright ban any deviation from traditional cooperative governance, such as in Denmark.
Pönkä provides a more in-depth examination of Finland’s regulation of investor shares, especially probative as the country has one of the highest numbers of cooperatives throughout its economy, even as its government has remained relatively unmotivated to promote cooperative principles. After investor shares were first enabled in 1989, Finland subsequently enacted a series of liberalizing reforms to further encourage the use of investor shares, given their limited uptake. However, these reforms have never achieved significant success, even when cooperatives were allowed to declare profit maximization a priority value and investors were given veto rights over cooperative decision-making.
At this point, no one appears to be satisfied with investor share regimes. More liberalized and flexible regulatory regimes exacerbate the same numerus clausus-like informational issues for outside investors, and proponents of cooperative principles worry that they will incentivize existing trends of “demutualization” by prompting directors to prioritize quantifiable profits in how they interpret their fiduciary duties. (P. 357.)
Beyond its own internal conflicts, what is most provocative about Pönkä’s study is how directly it relates to larger controversies about corporate governance in “capital cooperatives.” In recent decades, stakeholder or stewardship models of corporate governance have taken center stage in global debates, stemming from the same aforementioned dissatisfaction with the social consequences of profit-maximizing and director-primacy models. As academically popular as some of these alternatives have become, their practical application has raised so far intractable parallel doctrinal and institutional questions about how to conceptualize the relevant governing constituencies and how to concretize consideration of the potentially limitless alternative values beyond profit maximization.
These alternative governance models also replicate a core dilemma that cooperatives have long faced—their ability to exist within a larger economic ecology dominated by a different evaluative logic. Historically, the United States was one of the earliest and most prolific sites of 19th– and 20th-century cooperative experiments, as it appeared to provide new and “empty” spaces for entire communities to form around cooperative logics. This phenomenon led to the historical density of mutual insurance, credit unions, and producer cooperatives in the American Midwest that drew Hansmann’s attention. However, modern cooperatives rarely have the luxury of even localized densities and must interface with predominantly non-cooperative institutions while competing in national and international markets. As a result, Pönkä notes that investor shares are just one of many financing innovations that cooperatives have been forced to creatively utilize, ranging from crowdfunding to creating for-profit subsidiaries.
Here again, investor shares in cooperatives are not an idiosyncratic curiosity, but are a sub-species of larger dynamics within corporate governance. Any fixed relationship between ownership, profits, and governance for traditional share investing has been increasingly subject to aggressive customization, beyond critiques of the substantive reality of “shareholder democracy.” Non-voting shares and preferred stock are prominent examples, but almost fully customized regimes are increasingly apparent—notably those in both the United States and China which grant technology founders with minority stakes substantial retained powers, including veto rights. Such contractual modification is even now pervasive among credit unions, where, although the most successful internationalized form of cooperative economics, almost all new members unknowingly assign away proxy rights as they click through digital sign-up pages.
Pönkä’s precise review of the issues provoked by investor shares thus convincingly ends with a call to reconsider the ecological regulatory restraints on cooperatives, specifically in antitrust and tax law, rather than focusing on private legal engineering. Indeed, many non-worker cooperatives have long struggled with how to include non-member employees in their governance structures to promote broader social values—if at all, in the case of producer cooperatives. Here, Pönkä’s insights resonate with my own experience studying Employee Stock Ownership Plans, which similarly seek to reorient capital cooperatives towards worker well-being but centrally struggle with their routine separation of share ownership from governance rights through trust mechanisms. It is not coincidental that the long tradition of promoting “employee ownership” in the United States has experienced an uneasy, if not systemic, sociological split with worker cooperative proponents, precisely over whether the issue of worker empowerment is central to employee ownership promotion.
Methodologically, Pönkä also instructively outlines issues that have, perhaps unavoidably, arisen from the relative academic and political marginalization of cooperative governance. Though he has his own sympathies, Pönkä admits frustration that all too many studies of cooperatives are carried out by those seeking to compensate for this marginalization through less than rigorous comparative legal analysis. This can manifest as a tendency to overgeneralize cooperative successes (again, an inherent challenge for a minority economic practice), but more acutely in a lack of critical comparative analysis that does not take as seriously the very real national and sub-national regulatory variability under which cooperatives of different sorts operate. This is, in itself, the core challenge of comparative legal analysis, and an issue that the proliferation of cross-national comparison has often aggravated, rather than ameliorated.
Pönkä’s sober and comprehensive review thus necessarily generates more questions than answers, much like the current global anxiety over how to reorient economic institutions towards sustainable and meaningful lives for modern citizens. Ultimately, no amount of legal genius will ever be able to fully resolve what are essentially political problems related to the distribution of decision-making power within a given society. Still, the type of integrative comparative work that Investor Shares represents demonstrates how unproductive common framings, such as “socialism” or “capitalism,” can be when attempting to address concrete issues of economic organization that grapple with some of the most inveterate challenges of the human condition.
