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Universidade Federal Do Rio Grande Do Sul Programa De Pós-Graduação Em Direito Universidade Federal do Rio Grande do Sul Programa de Pós-Graduação em Direito THE GLOBAL EVOLUTION OF CORPORATE LAW: LESSONS FROM BRAZIL Mariana Pargendler Tese apresentada como requisito parcial para obtenção do título de Doutor em Direito pela Faculdade de Direito da Universidade Federal do Rio Grande do Sul, em co-tutela com a Yale Law School. Orientadores: Carlos Klein Zanini (Universidade Federal do Rio Grande do Sul) Henry Hansmann (Yale University) Porto Alegre, 2011 © 2011 by Mariana Pargendler All rights reserved. 2 To my parents, Maria Isabel and Ari, and to Carlos. ACKNOWLEDGMENTS This dissertation is the product of the collaboration between two law faculties in different hemispheres: the Yale Law School in the United States and the School of Law of the Federal University of Rio Grande do Sul (UFRGS) in Brazil. Professors Judith Martins-Costa, Carlos Klein Zanini, and Henry Hansmann have supported this joint enterprise since its inception, and for that I am most appreciative. The present work has benefited enormously from the resulting dialogue between these different legal cultures and styles of legal scholarship. I owe my deepest gratitude to my supervisor, Professor Henry Hansmann, who has been the most inspiring, dedicated, and generous academic mentor possible. I am deeply honored and humbled for the privilege of both receiving his invaluable guidance throughout the elaboration of this thesis and collaborating on other academic projects during my doctoral studies. I am also extremely grateful to my co-supervisor, Professor Carlos Klein Zanini. To him I owe not only the completion of this dissertation but also, as my first Business Organizations professor, my interest in corporate law that has accompanied me ever since. I am, once again, profoundly indebted to Professor Judith Martins-Costa, my eternal advisor, whose example and generosity have spurred and shaped my academic trajectory ever since my undergraduate legal studies in Porto Alegre. This dissertation is yet another fruit of the lasting academic relationship and personal friendship that has been one of the highlights of my intellectual life. The contributions of the readers of my dissertation committee at Yale and of my prequalification committee at UFRGS have also greatly enriched this work. Professor James Whitman’s thoughtful comments have not only helped strengthen my arguments, but also prompted me to pursue new and unforeseen (but ultimately fruitful) lines of inquiry. Professor Ian Ayres has also offered insightful and detailed feedback. Professors Cesar Viterbo Matos Santolim, Ronald Otto Hilbrecht, and Vera Maria Jacob de Fradera provided invaluable comments and suggestions during my prequalification exam. I am also grateful to Professors Ronald Gilson, Claire Priest, and Alan Schwartz for stimulating discussions. I would also like to thank my current and former colleagues at Yale Law School for their friendship, support, and intellectual engagement during this process. For those within this group, I extend special thanks to Diego Arguelhes, Catarina Barbieri, Miguel de Figueiredo, Daniela Gabbay, George Georgiev, Mickey Hyman, John Morley, Fernando Muñoz, Jaclyn Neo, Thomaz Pereira, and Natasha Salinas. Finally, I dedicate this dissertation to my family. My father Ari and my mother Maria Isabel have always been the most loving and supportive parents, as well as the best role models one could ever hope for. I owe everything to them. I am also deeply grateful to Carlos, my love and partner in life, without whose patience, collaboration, and constant encouragement this work would not have been possible. v TABLE OF CONTENTS Abstract ............................................................................................................................................ x Resumo ........................................................................................................................................... xi Chapter I Introduction Introduction ...................................................................................................................................... 1 Chapter II Politics in the Origins: The Making of Corporate Law in Nineteenth-Century Brazil I. Background: The State of the Law-and-Finance Debate ............................................................ 12 II. Origins of Brazilian Commercial Law (1808-1850) ................................................................. 25 III. Adopting a Commercial Code (1850) ...................................................................................... 36 IV. New Hurdles to Financial Development (1851-1881) ............................................................. 51 V. Boom, Bust and the Day After (1882 – 1900) ......................................................................... 67 VI. Selective Transplants in the Twentieth Century ..................................................................... 77 VII. Evaluating Early Transplants ................................................................................................ 87 VIII. Conclusion ............................................................................................................................ 97 Chapter III The Rise and Decline of Legal Families I. Introduction .............................................................................................................................. 103 II. Legal Family Taxonomies in Historical Perspective ............................................................. 113 III. From Comparative Legislation to Comparative Law............................................................ 133 IV. Self-Image and Legal Transplants in the Nineteenth Century .............................................. 147 A. Continental Influence in Early-Nineteenth-Century English and U.S. Law .................... 149 i. England ........................................................................................................................ 149 ii. United States ................................................................................................................ 152 B. Cross-fertilization in Company Law ................................................................................ 154 C. Legal Bricolage in Latin America .................................................................................... 157 V. Conclusion ............................................................................................................ …………..160 Chapter IV The Brazilian State as Shareholder I. Introduction: State Intervention in Nineteenth-Century Brazil ............................................... 162 II. The Rise of Mixed Enterprise ................................................................................................. 167 III. The Corporate Law Implications of Privatizations in Brazil ................................................. 197 IV. Corporate Governance under Continued State Ownership .................................................... 212 Chapter V The Political Economy of State Ownership in Comparative Perspective I. Introduction .............................................................................................................................. 223 II. The State as Shareholder in Comparative Perspective ............................................................ 236 A. United States ................................................................................................................ 236 B. China ............................................................................................................................ 251 C. Continental Europe ...................................................................................................... 259 i. Italy .............................................................................................................................. 262 ii. France ........................................................................................................................... 270 iii. Germany ....................................................................................................................... 274 III. Corporate Governance after the Wave of Privatizations ........................................................ 278 IV. Addressing Conflicts of Interest ............................................................................................ 284 A) Ownership Strategies ....................................................................................................... 285 vii i. Privatization ................................................................................................................. 286 ii. Whole ownership of SOEs ........................................................................................... 287 iii. The State as minority shareholder ................................................................................ 293 B) Legal Strategies ................................................................................................................ 296 i. Dual regulatory regimes ............................................................................................... 296 ii. Dual regulatory authorities........................................................................................... 307 V. Conclusion ............................................................................................................................. 315 Chapter VI Conclusion Conclusion ..................................................................................................................................
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