Barry Adler’s scientific contributions

Municipalities in fiscal distress may seek to adjust debts under Chapter 9 of the Bankruptcy Code either because they are truly destitute or because they lack the political will to adopt difficult resource adjustments. Local officials of municipalities that enter bankruptcy proceedings nevertheless retain political authority over municipal fiscal affairs. The decision to enter bankruptcy, however, may have significant financial consequences for other municipalities or for more centralized levels of government. Those externalities induce central governments to consider bailouts for distressed municipalities. In order to avoid moral hazard problems, central governments typically impose harsh restrictions on local officials as a condition of bailout. This dual system of rescue for distressed municipalities—bailouts and bankruptcy—permits local officials to threaten to file under Chapter 9 and thus to impose costs on central governments, unless the latter modify the conditions of bailouts. In this Article, I suggest that allowing bankruptcy courts to impose resource adjustments serves to neutralize the strategic behavior of local officials and thus encourages localities to internalize the costs of their activities in a manner more consistent with the tenets of fiscal federalism.

The American Law Institute's new "Principles of the Law of Software Contracts" aim to improve online contracting practices. Instead of regulating terms directly to reduce the possibility of unfair or biased terms, the Principles emphasize increased contract disclosure to encourage readership and comparison shopping. I test whether increasing disclosure in the proposed manner is likely to increase readership in the setting of End User License Agreements of software sold online. I follow the clickstreams of 47,399 households to 81 Internet software retailers and find that EULAs are approximately 0.36% more likely to be viewed when they are presented as clickwraps that explicitly require assent, as suggested by the Principles, than when they are presented as browsewraps. The results indicate that mandating disclosure will not by itself change readership or contracting practices to a meaningful degree. I briefly review other approaches to reform that may be more effective but come with their own limitations. for helpful comments. Mangesh Kulkarni provided excellent research assistance.