Strong Managers, Weak Owners: The Political Roots of American Corporate Finance

by Mark J. Roe

Overview

In this major reinterpretation of the evolution of the American corporation, Mark Roe convincingly demonstrates that the ownership structure of large U.S. firms owes its distinctive character as much to politics as to economics and technology. His provocative examination addresses essential issues facing American businesses today as they compete in the new international marketplace.

Product Details

ISBN-13:	9780691026312
Publisher:	Princeton University Press
Publication date:	03/24/1996
Edition description:	REPRINT
Pages:	342
Product dimensions:	7.75(w) x 10.00(h) x (d)

About the Author

Mark J. Roe is a professor at Columbia Law School.

Table of Contents

Preface
Introduction
Pt. I	The Economic Paradigm	1
Ch. 1	Diffuse Ownership as Natural Economic Evolution	3
Ch. 2	Fragmentation's Costs	9
Pt. II	The Political Paradigm	19
Ch. 3	Diffuse Ownership as Political Product	21
Ch. 4	A Political Theory	26
Pt. III	The Historical Evidence	51
Ch. 5	Banks	54
Ch. 6	Insurers	60
Ch. 7	Banks Again	94
Ch. 8	Mutual Funds	102
Ch. 9	Pension Funds	124
Pt. IV	The Contemporary and Comparative Evidence	147
Ch. 10	Takeovers	151
Ch. 11	Corporate Ownership in Germany and Japan	169
Ch. 12	A Small Comparative Test of the Political Theory	187
Ch. 13	Counterpoint I	198
Ch. 14	Political Evolution in Germany and Japan?	210
Ch. 15	Trends in the United States	222
Ch. 16	An American Crossroads	226
Pt. V	Policy Recommendations	231
Ch. 17	Managers as the Problem?	235
Ch. 18	Short-Term Finance as the Problem?	240
Ch. 19	Industrial Organization as the Problem?	248
Ch. 20	Counterpoint II	254
Ch. 21	Changing the American Ownership Structure?	263
Conclusion	283
Bibliography	289
Acknowledgments	309
Index	311

What People are Saying About This

From the Publisher

"No one before has ever written a comprehensive poltical history of the fragmentation of stock ownership nor demonstrated the critical role that this fragmentation has played in shaping the power of managers in the American business system. Roe has provided a powerful and original explanation of the emergence and persistence of managerial autonomy in the United States."—David Vogel, University of California, Berkeley

"A seminal work that should become [a] mainstay for years to come."—Peter H. Aranson, Emory University

David Vogel

No one before has ever written a comprehensive poltical history of the fragmentation of stock ownership nor demonstrated the critical role that this fragmentation has played in shaping the power of managers in the American business system. Roe has provided a powerful and original explanation of the emergence and persistence of managerial autonomy in the United States.
— David Vogel, University of California, Berkeley

Aranson

A seminal work that should become [a] mainstay for years to come.
— Peter H. Aranson, Emory University

Editorial Reviews

"Economic theory appeared to predict that the American version [of capitalism, in which firms feed on a huge and liquid stockmarket] should be the most efficient. This view stemmed from [Berle and Means] in The Modern Corporation and Private Property ... [and] held sway for the next fifty years.... Roe ... takes this debate a giant step forward. Far from being the inevitable winner of a Darwinian struggle, argues Roe, the Berle-Means corporation owes its existence to American politics, and in particular to a deeply ingrained popular mistrust of concentrated financial power."

The Economist

"Roe ... argues persuasively that old-fashioned politics ... play[s] the key role in building a structure of corporate finance.... Strong Managers, Weak Owners does for corporate governance what Alfred Chandler's The Visible Hand did for the corporation: makes history essential to understanding current practice and policy."—-Robert Teitelman, Institutional Investor

From the Publisher

Roe ... argues persuasively that old-fashioned politics ... play[s] the key role in building a structure of corporate finance.... Strong Managers, Weak Owners does for corporate governance what Alfred Chandler's The Visible Hand did for the corporation: makes history essential to understanding current practice and policy.

Institutional Investor - Robert Teitelman

Roe ... argues persuasively that old-fashioned politics ... play[s] the key role in building a structure of corporate finance.... Strong Managers, Weak Owners does for corporate governance what Alfred Chandler's The Visible Hand did for the corporation: makes history essential to understanding current practice and policy.
— Robert Teitelman

Institutional Investor