May 09, 2010
Supply and Demand in Financial Regulation Scholarship: Gramm Leach Bliley vs. SOX
Posted by Erik Gerding

In an idle moment last week, I decided to do a little amateur empirical research into a question that been nagging me, “Why does it seem there were vastly more articles on the effects (particularly the supposed ill effects) of Sarbanes Oxley than Gramm Leach Bliley (and the repeal of Glass Steagall)?”

Before delving into the hypothesis, I wanted to make sure my perception was reality. So I did a quick Lexis/Nexis search of U.S. law reviews for the first five full years after those two acts passed. I looked only for titles in which the name of the act appeared ((Gramm or GLB or Steagall) compared to (Sarb! or SOX)).

I came up with a list of 34 articles for Gramm, Leach, Bliley/Glass Steagall versus 354 articles for SOX.

What accounts for the greater SOX appeal? One possible explanation is that Sarbanes Oxley affected vastly more companies and occupied a greater number of lawyers.

What I’d like to test is a second hypothesis, that Sarbanes Oxley was seen as more momentous for the U.S. economy. Which I think is a very interesting contention itself. Just eyeballing the two lists of titles, the portion of the Sarbanes articles that appear on their face to be critical of that act seems larger than the portion of the facially critical GLB articles.

Now before you jump ahead and call scholarly conspiracy (or think that I am looking to identify one), let me be clear about the dynamic I think is worth exploring. I think it is worth asking whether the SOX, which imposed new requirements on industry, generated a lot more political heat, to which legal scholars responded – including with a lot of very good empirical studies. GLB, by contrast, removed a lot of big regulatory barriers – so there was less heat from industry and therefore less demand for scholarship.

Have I proven this? Not al all – this is just the just the beginning.

Empirical Legal Studies, Financial Crisis, Law Schools/Lawyering, Legal Scholarship | Bookmark

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