The Law and Economics of Hedge Fund Regulation: A Comparison between the U.S. and the EU

This doctoral dissertation seeks to assess and address the potential contribution of the hedge fund industry to financial instability. In so doing, the dissertation investigates three main questions. What are the contributions of hedge funds to financial instability? What is the optimal regulatory strategy to address the potential contribution of hedge funds to financial instability? And do new regulations in the U.S. and the EU address the contribution of hedge funds to financial instability? With respect to financial stability concerns, it is argued that despite their benefits, hedge funds can contribute to financial instability. Hedge funds’ size and leverage, their interconnectedness with Large Complex Financial Institutions (LCFIs), and the likelihood of herding behavior in the industry can potentially undermine financial stability. Nonetheless, the data on hedge funds’ size and leverage suggest that these features are far from being systemically important. In contrast, the empirical evidence on the interconnectedness of hedge funds with LCFIs and their herding behavior is mixed. Based on these findings, the thesis focuses on one particular aspect of hedge fund regulation: direct vs. indirect regulation. In this respect, a major contribution of the thesis to the literature consists in the explicit discussion of the relationships between hedge funds and other market participants. Specifically, the thesis locates the domain of the indirect regulation in the inter-linkages between hedge funds and prime brokers. Accordingly, the thesis argues that the indirect regulation is likely to address the contribution of hedge funds to systemic risk without compromising their benefits to financial markets. The thesis further conducts a comparative study of the regulatory responses to the potential contribution of hedge funds to financial instability through studying the EU Directive on Alternative Investment Fund Managers (AIFMD) and the hedge fund-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

A Law and Economics Analysis of Lobbying Regulation Towards an optimal structure through the Cost Indicator Index

This research primarily represents a contribution to the lobbying regulation research arena. It introduces an index which for the first time attempts to measure the direct compliance costs of lobbying regulation. The Cost Indicator Index (CII) offers a brand new platform for qualitative and quantitative assessment of adopted lobbying laws and proposals of those laws, both in the comparative and the sui generis dimension. The CII is not just the only new tool introduced in the last decade, but it is the only tool available for comparative assessments of the costs of lobbying regulations. Beside the qualitative contribution, the research introduces an additional theoretical framework for complementary qualitative analysis of the lobbying laws. The Ninefold theory allows a more structured assessment and classification of lobbying regulations, both by indication of benefits and costs. Lastly, this research introduces the Cost-Benefit Labels (CBL). These labels might improve an ex-ante lobbying regulation impact assessment procedure, primarily in the sui generis perspective. In its final part, the research focuses on four South East European countries (Slovenia, Serbia, Montenegro and Macedonia), and for the first time brings them into the discussion and calculates their CPI and CII scores. The special focus of the application was on Serbia, whose proposal on the Law on Lobbying has been extensively analysed in qualitative and quantitative terms, taking into consideration specific political and economic circumstances of the country. Although the obtained results are of an indicative nature, the CII will probably find its place within the academic and policymaking arena, and will hopefully contribute to a better understanding of lobbying regulations worldwide.

Judges and Mass Litigation - a (Behavioural) Law and Economics Perspective

Judicial duties have for decades extended far beyond the scope of traditional adjudication, judges being progressively called upon to occupy the role of social engineers. Meanwhile, contexts in which judges evolve have transformed: mass damage nowadays tends to multiply and create new challenges not only for legal actors, but also for society at large. In spring 2011, the replies received by the European Commission to its public consultation on collective redress indicated European stakeholders’ strong interest in seeing judiciaries play prominent and leading roles in the supervision and monitoring of procedures which enable groups of claimants to seek together compensation for damage caused by mass events. Judges are thus expected to be neutral and robust agents while assuming heavy responsibilities under a considerable burden. Insights from social sciences however invite us to revisit policymakers expectations and may shed new light on current debates about mass litigation.

Challenges for Participatory Conservation in Times of Global Change: Lessons from a Comparative Analysis and New Developments

Participatory approaches to conservation have been applied worldwide by governments and non-governmental organisations. However, results from a comparative analysis of the impacts of global change on management issues in 13 protected areas in Africa, Latin America, Asia, and Europe show that in many cases the involvement of local people has remained limited, and economic gains for local livelihoods have been limited or non-existent. Viewed from a ‘new institutionalist’ perspective and focusing on power relations and ideologies, the results of this study carried out within the framework of the Swiss National Centre of Competence in Research (NCCR) North-South show that in African cases local people do not feel part of the process and, therefore, become disengaged. In Asia, and even more so in Latin America, local indigenous peoples and their leaders support protected areas as a means to gain political rights over areas threatened by immigration. The European (Swiss) case is the only one where political rights and economic incentives present a context in which participation is of direct interest to local people. Meanwhile, recent debates on new global conservation developments in the context of climate change policy indicate a growing tendency to treat conservation as a commodity. We argue that this can have problematical effects on efforts to devolve power to the local level in the context of conservation.

How Do We Teach Economics?

The teaching of economics in Hungary has changed fundamentally since the 1980s for two main reasons. Firstly, the transformation towards a market economy has changed the needs of students, and secondly, there has been a move to harmonise Hungarian methods of teaching with Western ones. The number of institutions involved in economics education has increased substantially to meet new demand and these institutions offer a wide range of programs, though the topics covered tend to be more practically based than previously. A survey of students set out to evaluate economics as a profession by investigating social esteem, financial compensation, career prospects, and mobility within the profession. Amongst full-time students there was a strong correlation between the parents' background and the students' career prospects. Full-time students were more optimistic than part-time students, although the latter had a higher opinion of the academic level of their educational establishments. A second survey, this time of economics teachers, revealed the disturbing fact that teachers rated themselves in the last but one position according to social esteem and felt that society had a poor opinion of them. Fifty percent expressed a desire to leave the profession and 70% supplemented their income with work outside their school, rarely within the domain of economics. The final part of the research analysed the situation in private educational institutions, nothing that unemployment retraining grants offered by the Ministry of Labour have created an incentive for private entrepreneurs to organise courses and that the quality of these courses varies considerably.

A New Symbiosis: Municipalities, Private Contractors and Non-Governmental Organisations for the Provision of Local Public Services"

This project considered the second stage of transforming local administration and public service management to reflect democratic forms of government. In Hungary in the second half of the 1990s more and more public functions delegated to local governments have been handed over to the private or civil sectors. This has led to a relative decrease of municipal functions but not of local governments' responsibilities, requiring them to change their orientation and approach to their work so as to be effective in their new roles of managing these processes rather than traditional bureaucratic administration. Horvath analysed the Anglo-Saxon, French and German models of self-government, identifying the differing aspects emphasised in increasing the private sector's role in the provision of public services, and the influence that this process has on the system of public administration. He then highlighted linkages between actors and local governments in Hungary, concluding that the next necessary step is to develop institutional mechanisms, financial incentives and managerial practices to utilise the full potential of this process. Equally important is the need for conscious avoidance of restrictive barriers and unintended consequences, and for local governments to confront the social conflicts that have emerged in parallel with privatisation. A further aspect considered was a widening of the role of functional governance at local level in the field of human services. A number of different special purpose bodies have been set up in Hungary, but the results of their work are unclear and Horvath feels that this institutionalisation of symbiosis is not the right path in Hungary today. He believes that the change from local government to local governance will require the formulation of specific public policy, the relevance of which can be proven by processes supported with actions.

The Institutional Framework around Successful Art Forms in Communist Czechoslovakia

Mr. Michl posed the question of how the institutional framework that the former communist regime set up around art production contributed to the success of Czech applied arts. In his theoretical review of the question he discussed the reasons for the lack of success of socialist industrial design as opposed to what he terms pre-industrial arts (such as art glass), and also for the current lack of interest into art institutions of the past regime. His findings in the second, historical section of his work were based largely on interviews with artists and other insiders, as an initial attempt to use questionnaires was unsuccessful. His original assumption that the institutional framework was imposed on artists against their will in fact proved mistaken, as it turned out to have been proposed by the artists themselves. The basic blueprint for communist art institutions was the Memorandum document published on behalf of Czechoslovak visual artists in March 1947, i.e. before the communist coup of February 1948. Thus, while the communist state provided a beneficial institutional framework for artists' work, it was the artists themselves who designed this framework. Mr. Michl concludes that the text of the memorandum appealed to the general left-wing and anti-market sentiments of the immediate post-war period and by this and by later working through the administrative channels of the new state, the artists succeeded in gaining all of their demands over the next 15 years. The one exception was artistic freedom, although this they came to enjoy, if only by default and for a short time, during the ideological thaw of the 1960s. Mr. Michl also examined the art-related legislative framework in detail and looked at the main features of key art institutions in the field, such as the Czech Fund for Visual Arts and the 1960s art export enterprise Art Centrum, which opened the doors into foreign markets for artists.

Sustainable land management: A new approach to soil and water conservation in Ethiopia

Many efforts have been made in Ethiopia to mitigate land degradation, particularly soil erosion, through both local and newly introduced soil and water conservation (SWC) practices. However, the strict focus on soil erosion and conservation does not necessarily lead to satisfactory results. If SWC is effective in reducing erosion but is at the same time too costly and unacceptable to land users, sooner or later it will disappear and its positive effects will also be lost. This book therefore suggests to follow the broader approach of Sustainable Land Management (SLM), which aims at ecological soundness, economic viability and social acceptability, and thus places SWC in a more holistic framework that is closer to farmers’ reality.

Incidence and correlates of drug-eluting stent thrombosis in routine clinical practice. 4-year results from a large 2-institutional cohort study

OBJECTIVES: We sought to determine the risk of late stent thrombosis (ST) during long-term follow-up beyond 3 years, searched for predictors, and assessed the impact of ST on overall mortality. BACKGROUND: Late ST was reported to occur at an annual rate of 0.6% up to 3 years after drug-eluting stent (DES) implantation. METHODS: A total of 8,146 patients underwent percutaneous coronary intervention with a sirolimus-eluting stent (SES) (n=3,823) or paclitaxel-eluting stent (PES) (n=4,323) and were followed up to 4 years after stent implantation. Dual antiplatelet treatment was prescribed for 6 to 12 months. RESULTS: Definite ST occurred in 192 of 8,146 patients with an incidence density of 1.0/100 patient-years and a cumulative incidence of 3.3% at 4 years. The hazard of ST continued at a steady rate of 0.53% (95% confidence interval [CI]: 0.44 to 0.64) between 30 days and 4 years. Diabetes was an independent predictor of early ST (hazard ratio [HR]: 1.96; 95% CI: 1.18 to 3.28), and acute coronary syndrome (HR: 2.21; 95% CI: 1.39 to 3.51), younger age (HR: 0.97; 95% CI: 0.95 to 0.99), and use of PES (HR: 1.67; 95% CI: 1.08 to 2.56) were independent predictors of late ST. Rates of death and myocardial infarction at 4 years were 10.6% and 4.6%, respectively. CONCLUSIONS: Late ST occurs steadily at an annual rate of 0.4% to 0.6% for up to 4 years. Diabetes is an independent predictor of early ST, whereas acute coronary syndrome, younger age, and PES implantation are associated with late ST.