The role of law in entrepreneurship policies and institutions: a socio-legal view on multiple regimes of property rights

Abstract

Business ownership has been in deep transformation since the paradigmatic socio-legal study by Berle and Means on corporations. Not only in traditional manufacturing, but also in sectors such as education, health, culture and media the models of property are changing beyond the options of pure private capital (as in joint-stock companies), self-managed firms (cooperative societies) or state-owned enterprises. Therefore, studies on inequality have pointed out the great challenge that is to develop new forms of property, changing the primary distribution of social resources and opportunities. The state roles of guaranteeing private rights, of direct entrepreneurship, of sectoral and antitrust regulation and of compensatory policy-making stay in large measure in operation and observation. Although, a fifth role in economic policy - that of innovating, expanding or creating the market - remains in the shadow. This is the target of entrepreneurship policies, turned to democratize the market economy on the supply side. 'Disaggregated property' is a heuristic legal concept that can describe promising institutional forms for these policies. It identifies, besides the unified property right (be it public, private or cooperative), arrangements of ownership constituted of multiple and superimposed claims, maybe conditional or temporary ones, on behalf of diverse kinds of right-holders (governments, entrepreneurs, communities), over a certain set of assets. My analytical proposal is to unfold the concept of disaggregated property in three dimensions. The first one is the material dimension, and it refers to the extent of rights on a set of assets: their disaggregation can occur in the form of substituting the unified property by fragmentary rights in rem or intellectual rights; by the constitution of different species and classes of shares (in the corporate level); or by the funding through different funds of venture capital, impact investing or private equity. The second dimension of disaggregation is the temporal one: it refers to temporary or conditional rights; as in the case of funds of seed capital and venture capital, with investment and disinvestment schedules aligned with business maturation. Finally, there is a social dimension of disaggregation: it refers to the variety of owners of productive and financial assets.These forms of ownership can be seen in action in many examples, such as: (i) in public venture capital funds that work as investors in private funds, as in many OECD countries; (ii) in the Chinese experience of township-village enterprises; (iii) in the proposal for a mixed economy coming out of the privatization of Russia state-owned enterprises, through the constitution of overlapping holding companies with minority stakes, each holding company involving private investors, public agencies and employees; (iv) in the Brazilian experiences of public-private-community partnerships (PPCP's), which include as co-owners private investors, public development agencies and banks, and local communities organized though cooperatives. Therefore, the focus of this study is on the analysis and comparison of policies and institutions governing these kinds of arrangements of disaggregated property rights. This includes reviewing literature on democratic perspectives about property , on the contractual forms of business networks and on the experimentalist governance of intermediary organizations and agencies that have a mixed status (both public and private) and coordinate entrepreneurs' demands with a decentralized state policy and monitoring. To scrutinize the legal details of these mixed ownership models can bring a better view on the varieties, risks and functions of diverse regimes of productive property now at work in contemporary economy. (AU)