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A detailed historical description of the evolution of corporate governance and stock markets in Brazil in the late nineteenth and twentieth centuries.
List of contents
1. Introduction; 2. Financial development in Brazil in the nineteenth century; 3. The stock exchange and the early industrialization of Brazil, 1882-1930; 4. The foundations of financial democracy: disclosure laws and shareholder protections in corporate bylaws; 5. Voting rights, government guarantees, and ownership concentration, 1890-1950; 6. Directors, corporate governance, and executive compensation in Brazil, c.1909; 7. Bond markets and creditor rights in Brazil, 1850-1945; 8. Were bankers acting as market makers?; 9. What went wrong after World War I?; 10. The rise of concentrated ownership in the twentieth century; 11. Conclusion.
About the author
Aldo Musacchio is an Assistant Professor in the Business, Government, and International Economy Unit of Harvard Business School and a Research Fellow of the National Bureau of Economic Research, Cambridge, Massachusetts. Before joining Harvard in 2004, Professor Musacchio was a Fellow of the Center for Democracy, Development, and the Rule of Law at Stanford University and a Fellow of the Institute for Humane Studies at George Mason University. His primary fields of expertise are the business and economic history of Latin America, corporate governance, the political economy of development, and new institutional economics. Professor Musacchio's current research explores the role of property rights and the legal environment for long-run economic development, including the ways in which firms adapt to adverse economic conditions. His paper 'Can Civil Law Countries Get Good Institutions? Lessons from the History of Creditor Rights and Bond Markets in Brazil' won the Arthur H. Cole Prize for best paper in the Journal of Economic History, 2007–8. Professor Musacchio received his Ph.D. in the economic history of Latin America from Stanford University.
Summary
This book provides a detailed historical description of the evolution of corporate governance and stock markets in Brazil in the late nineteenth and twentieth centuries. In particular, it covers the rights that shareholders had to restrict the actions of managers, and how that shaped different approaches to corporate finance over time.
Additional text
'If you thought that the dismal state of corporate governance in Latin America is a direct product of its colonial or civil law heritage, Experiments in Financial Democracy will make you think again. Based on painstaking archival work, Aldo Musacchio demonstrates that in the late nineteenth century, investors in Brazilian corporations were better protected than they were in the late twentieth century. The law secured the claims of bondholders while many firms protected minority shareholders in their corporate charters. The work convincingly demonstrates that even poor countries can create and implement institutions favorable to capital markets. This optimistic historical finding is fully relevant to our troubled financial times.' Jean-Laurent Rosenthal, California Institute of Technology
