Bouncing along a dusty road in Ghana, I had an eye-opening conversation with a colleague who was supervising a survey we were doing. It turns out he had been offered a more prestigious job, with a significantly higher salary, elsewhere in Ghana. But he was turning it down.
A common notion in public policy is that policy-making and implementation are divorced from each other, in the sense that politics surrounds decision-making activities (to be carried out by the elected political leadership) while implementation is an administrative activity (to be handled by bureaucracies). However, researchers have found that such distinctions are not helpful in understanding policy implementation in developing countries.
Did the bailout of Chrysler by the U.S. government overturn bankruptcy law in the United States?
Almost two years ago, the outgoing Bush and incoming Obama administrations announced a series of steps to assist Chrysler, the struggling automaker, in an extraordinary intervention into private industry. The federal government intervened in Chrysler’s reorganization in a manner that, according to many analysts, subordinated the senior secured claims of Chrysler’s lenders to the unsecured claims of the auto union UAW. As one participant interpreted the intervention, the assets of retired Indiana policemen (which were invested in Chrysler’s secured debt) were given to retired Michigan autoworkers.
Critics claim that the bailout turned bankruptcy law upside down, and predicted that businesses would suffer an increase in their cost of debt as a result of the risk that organized labor might leap-frog them in bankruptcy. A long-standing principal of bankruptcy law requires that a debtor’s secured creditors be repaid, in full, before its unsecured creditors receive anything.