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The Demise of the Reputational Model in Capital Markets: The Problem of the “Last Period Parasites,” 60 Syracuse Law Review 427 (2010)


One of the most vexing questions facing economists is why it is so hard for poor countries to develop workable strategies for escaping the pernicious and chronic cycles of poverty, corruption and structural unemployment with which they are plagued. Clearly, a large part of the answer is that nations' prosperity is dependent on open and functional markets for products, services, and capital. These markets, in turn, depend on the ability of people to trade (contract) with one another with a reasonable degree of confidence. The ability to trade and to contract requires some sort of system that allows people both to: (a) establish recognized and stable property rights and (b) enter into reliable (predictably enforceable) contractual commitments with their counterparties, including customers, suppliers, employees and other constituents.

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