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Values Economics And Theology: The Contribution Of Catholic Social Thought And Its Implications For Legal Regulatory Systems, 5(2) Economics, Management, and Financial Markets 17-56 (2010).

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Abstract: The dominant system of global private economic ordering, grounded in classical liberal economic theory and based on robust private markets and a limited state regulatory role, has come under attack. That attack has been sharpened over the last several decades as the development of many poor states has failed to accelerate and as a consequence of the economic crisis of developed states that began to be felt in earnest in 2008. Like legal systems, economic systems grounded solely on rational activity without a foundation in normative value systems, are either incomplete or subject to perversion. This paper focuses on the values of substantive economics developed recently through application of Catholic theology. It focuses on the Catholic critique of consumerism, its understanding of a necessary labor policy and its sense of a just global economics. It will suggest a number of places where socio-economics and theology share common ground, and even something of a common framework of analysis, and that consequentially, there may be some force to arguments that some values may be trans-religious, as well as trans-cultural. The paper starts with a short consideration of the approach of economics in its modern globalized context, and the contribution of socio-economics to that approach. It then briefly suggests the contours of an economic critique of that modern approach, using as a foil for that purpose Fidel Castro’s attacks on economic globalization in favor of Marxist alternative global economic models. It then considers Catholic social thought as an alternative to both. For that purpose the paper focuses on Catholic social thought as it touches on the issues raised by global economic activity in three respects: materialism, labor rights and globalization. It ends with a consideration of an important criticism of conventional economics in Catholic social thought: that the dominant system is likely to fail because it lacks a legitimate ethical framework. For that purpose, the paper considers a recent revival of an article written by Benedict XVI in the 1980s when, as Cardinal Ratzinger, he suggested that the current dominant system would collapse for lack of a legitimate moral base, a base that could only be provided by Religion.

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Symposium Issue: A Constitutional Court for China Within the Chinese Communist Party?: Scientific Development and a Reconsideration of the Institutional Role of the CCP, 43(3) Suffolk Law Review 593-624 (2010).

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Abstract: One of the great current debates in Chinese constitutional law is the role of constitutional review within the Chinese legal-political system. This paper looks at the recent work of Chinese constitutional scholars to analyze the thrust of that debate. It suggests that this modern scholarship rightly focuses on the institutionalization and bureaucratization of politics as a hallmark of the scientific development of rule of law notions within China’s political system. This bureaucratization and institutionalization has important ramifications for institutionalizing constitutional interpretation as a viable legitimating tool within this developing Chinese constitutionalism. However, the paper criticizes the current approaches because they tend to focus on state institutions, principally the National People’s Congress, as the place from where the constitutional interpretation function ought to be exercised – whether implemented in the form of a court or some other collective. The paper proposes a different focus. Reading modern Chinese constitutionalism holistically supports the idea that the constitutional interpretation function ought to be exercised from the highest level of political authority in China. The Chinese Constitutional framework provides an important insight, one that is worth emphasizing – under the Chinese Constitutional system, the CCP is and ought to be recognized as the authoritative institutional interpreter of the constitution and the constitutional order over which it presides and under which it is bound. The highest institutional body within the Chinese constitutional system is the Chinese Communist Party rather than the state institutions, like the NPC, that have been the object of the current debate. As the institutional embodiment of the highest political authority in the nation, the CCP may be best suited for the role of authoritative interpreter of the constitution. An institutionalization of that function in the form of a constitutional court or similar collective organization within the CCP may thus represent the most appropriate way of further legitimating constitutionalism within the Chinese legal order.

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Cuba And The Construction Of Alternative Global Trade Systems: ALBA And Free Trade In The Americas, 31(3) University of Pennsylvania Journal of International Law 679-752 (2010) (with Augusto Molina Roman).

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Abstract: The Alternativa (now Alianza) Bolivariana para los Pueblos de Nuestra América (ALBA), the command economy alternative to the free trade model of globalization, is one of the greatest and least understood contributions of Cuba to the current conversation about globalization and economic harmonization. Originally conceived as a means for forging a unified front against the United States by Cuba and Venezuela, the organization now includes Nicaragua, Honduras, Dominica, and Bolivia. ALBA is grounded in the notion that globalization cannot be left to the private sector but must be overseen by the state in order to maximize the welfare of its citizens. The purpose of this paper is to carefully examine ALBA as both a system of free trade and as a nexus point for legal and political resistance to economic globalization and legal internationalism sponsored by developed states. The paper starts with an examination of ALBA’s ideology and institutionalization. It then examines ALBA as both trade organization and as political vehicle for confronting the power of developed states in the trade context within which it operates. ALBA remains embedded in a large web of trade arrangements among its member states that bind them in different ways under different arrangements. That context highlights differences, especially in relation to MERCOSUR and the abandoned FTAA. It also produces both cooperation and challenge. This is most acutely felt in ALBA’s relationships with CARICOM and in the rising network of bilateral investment treaties among regional states. Taken together, for the moment, at least, ALBA’s greatest contribution might well be its ideology. Its mere existence serves as a basis for challenging assumptions in the creation and implementation of methods of integration. It provides a base through which this distinctive ideological voice can be leveraged by its state parties in Hemispheric integration debates. It seeks to balance the tensions between post colonial nationalism, internationalism and state sector dominance by substituting for private markets and private actors, state actors and tightly controlled markets. It is no longer focused on eliminating borders for the production and management of private capital; instead it is focused on using borders as a site for the assertion of public authority to control all aspects of social, political, cultural, and economic activity. Understood as an ideological joint venture among its participants, ALBA represents a space within which a consensus on alternatives to the existing preeminent economic model of globalization might be constructed. As such, it may represent one of Cuba’s greatest triumphs and also its greatest challenge to the normative tenets of the current framework of economic globalization. Thus contextualized, ALBA serves as a nexus for six great points of tension and connection within both modern trade theory practice and the construction of state system frameworks in Latin America. ALBA implicates tensions between integration and nationalism; between public and private models of integration; and between internal and external regional trade norms. It also highlights connections between the current form of trade frameworks and the construction of alternative forms of trade arrangements; between anti-Americanism and integration; and between conventional frameworks of Latin American trade and it challengers. These are summarized in the conclusion.

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Sovereign Wealth Funds as Regulatory Chameleons: The Norwegian Sovereign Wealth Funds and Public Global Governance Through Private Global Investment, 41(2) Georgetown Journal of International Law 425-500 (2010).

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Abstract: The character of global regulation has changed dramatically over the last decade. Today, multinational corporations sometimes assert substantial regulatory power across borders, and states sometimes enter markets as participants rather than as regulators – especially when they engage in economic activity outside their borders through sovereign wealth funds (SWFs). In both cases the current transnational ordering has settled on voluntary principles based approaches to regulation. SWFs are controlled by states but seek to participate in private markets in the same way as private investment vehicles. But the difficulty has been the need to overcome the inherent sovereign character of state investment, central to the definition of SWFs. SWFs thus proceed from definition to conundrum. If SWFs are grounded in the reality of their formal connection to states, and if states are deemed sovereign in their actions, then it might be reasonable to assume that such funds could not be treated like private investment funds. To bridge that gap, it was necessary to find a way to disconnect SWFs from the state and sovereign activity, and to model private activity in a way that made it possible to construct a set of behavior principles that might produce an equivalence between SWFs and private investment vehicles. The first was accomplished by creating a functional distinction between state and SWF, a distinction unnecessary for traditional sovereign investment. The second was grounded in the presumption that there is a way of distilling the essence of private investment behaviors sufficiently precisely to distinguish those behaviors from sovereign conduct. Both are nicely captured in the Santiago Principles. Both are problematic either as concept or in application. This paper looks closely at one example of this rising phenomenon – the socially responsible sovereign wealth fund. It focuses on a close review of one of the most influential funds, the Norwegian Government Pension Fund – Global (Statens pensjonsfond – Utland). It is among the largest and most influential SWF in the world, and the largest in Europe. The Norwegian SWF provides a particularly useful case study of the issues that are now at the center of reconceptualizations of the relationships between state and corporation, between economic and political regulation, between national and transnational legal frameworks, and between public and private legal regimes. The paper first describes conceptual and regulatory frameworks on which current policy discussions of sovereign wealth funds are undertaken. It then turns to the Norwegian funds, focusing on the history of the Norwegian fund, its legal structure and the development of its investment principles. It then looks to the way those principles were used in two distinct areas – the creation of incentives to produce changes in the behavior and culture of corporations and the response to the global financial crisis of 2008. The paper suggests the political character of these activities. It then examines these actions in light of investment behaviors of socially responsible private funds, on which the Santiago Principles framework are grounded. These entities operate in ways that would be considered political, and suspect under the Santiago Principles, were they sovereign rather than private investment vehicles. Thus, problem is not that the Norwegian SWF advances political agendas through interventions in private markets, but rather that private investors engage in substantially similar conduct. The Norwegian SWF suggests that the emerging framework of SWF governance, grounded on an assumption that a state organization formally public but functionally private, acting like an idealized private investor does not work either for private investors who seek to use investment for political ends or state investment entities that purport to refrain from that sort of activity.

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Sovereign Investing in Times of Crisis: Global Regulation of Sovereign Wealth Funds, State Owned Enterprises and the Chinese Experience, 19(1) Transnational Law & Contemporary Problems 3-144 (2010).

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Abstract: The financial crisis that started in 2007 has brought into sharper focus a set of rising global financial actor – the sovereign investor. In the form of sovereign wealth funds (SWFs), sovereigns have become an important player in global financial markets and its stability. Over the last decade they have become more visible and more aggressive in the scope and form of their interventions in global finance. In the form of state owned enterprises, sovereigns have begun to operate indirectly through subordinate legal persons that operate like privately held multinational corporations. In that form, sovereigns are becoming a more significant presence in global markets as owners as well as investors. More importantly, sovereign owners have begun to coordinate their economic activities for economic and sovereign goals. Consequentially, crisis has produced a dynamic element in the evolution of the global economic system. The Chinese efforts to coordinate sovereign investing directly by the China Investment Corporation and its principal subsidiaries, and indirectly through its subsidiaries and supported SOEs investing abroad, suggest the more complex organization of sovereign investing in which profit maximization is blended with a pronounced set of political objectives, grounded in development goals. This presents a potentially substantial advance in the integration of programs of sovereign investing, public policy and private markets. A responsive regulatory framework has not followed. The rise of sovereign market participatory entities, operating as both sovereign and private actors, will require a responsive regulatory framework substantially different from those currently in gestation. The Chinese experience suggests that while there is fundamentally little to fear from well operating public-private constructs, that model requires a different regulatory approach, and one that recognizes and rethinks the relationship of public and private sectors and the limitations of the state’s role in both in the context of protecting the integrity of global markets and the free movement of capital and economic activity. This essay examines these fundamental issues of sovereign investing. Section I contextualizes the problem as a function of the character and control of large aggregations of wealth, Section II focuses on sovereign wealth funds as projections of public economic power in private form. It focuses on issues of the conceptual dissonance in the definition and operation of sovereign wealth funds. The section ends by connecting those issues to policy debates about sovereign investing, especially in the form of sovereign wealth fund activity. Section III then considers the expression of the conceptual dissonance of sovereign investment regulation. It considers national and supra national approaches to regulation and regulatory reform. Section IV considers state owned enterprises as another vehicle for sovereign investment abroad. It considers state owned enterprises (SOEs) as a fundamental component of innovative multi-vehicle deployments of sovereign wealth outside the national territory as part of the implementation of coordinated national development goals. Section V critically examines these issues in context. It considers the approach of China in the use of its state wealth through SWFs and SOEs.

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