In India, revenues from taxes and fees typically accrue to the central government with little left for state governments and rural and urban local bodies (RULBs). Therefore, these two levels of government are fiscally constrained. Moreover, RULBs and state governments have very little authority to levy new taxes. In fact, local sources of revenue have steadily shrunk. For example, the recent implementation of GST necessitated local governments to discontinue octroi and local body tax. The abolishment of octroi led to a 35 percent reduction in the revenue of the Municipal Corporation of Greater Mumbai (MCGM), one of India’s largest municipal corporations (Mankikar 2018). Furthermore, the total government liabilities (sum of all government debt and liabilities) are over two-thirds (68.6 percent) of the country’s GDP (GoI 2020b), which restricts the amount of urban development funds the central government can award to the state governments and RULBs.

Moreover, due to underdeveloped municipal bond markets, local governments are unable to access private capital markets for raising debt to fund urban development. To date, only eight municipalities have raised a meager INR 33.9 billion (Das 2019) or USD 474 million. This amount is just 0.1 percent of the municipal bond issuances of USD 426 billion in the US in 2019 alone (SIFMA 2020). Finally, residents resist traditional local revenue sources, such as property taxes. In such a scenario, India’s local governments urgently need additional local revenue sources to fund urban development projects, especially due to their rapidly urbanizing populace. For example, between 2014 and 2050, India’s urban population will increase by 404 million, far exceeding the next two countries—China and Nigeria—that will witness increases of 292 million and 212 million, respectively (United Nations 2014). Development charges are a key potential revenue source (Chary and Prasad 2014; Civil Society 2018).

Starting in the 1980s and spurred by the balance of payment crisis of the 1990s, India initiated fiscal and economic reforms at the national level and started paying increased attention to neoliberal market-based solutions and revenue sources, such as development charges (Vidyarthi, Mathur, and Agrawal 2017). Other Global South countries are also exploring such solutions, which are being popularized by multilateral aid and lending organizations such as the World Bank and UN-HABITAT. Indeed, in 2016 UN-HABITAT published a reader for developing countries that provides an overview of such financing tools (UN-HABITAT 2016).

In this chapter the focus is on corporate governance developments in countries where the two-tier board system is used. The number of EU member states with different corporate law systems makes corporate governance harmonisation quite difficult, but also leads to very interesting and dynamic discussion within the EU. The G20/OECD Principles of Corporate Governance cover board structures. Germany has a two-tier board structure with employee representatives forming part of the supervisory board. Elements of the German corporate governance model influenced the original Japanese corporate governance model, but Anglo-American influence emerged after World War II. China has a unique corporate governance model because Chinese corporations were traditionally state-owned and many major corporations are still either state-owned or state-controlled. Nevertheless, elements of both the German model and the Anglo-American model, especially as far as independent, non-executive directors for listed companies are concerned, have influenced the Chinese corporate governance model.

This chapter argues that countries, and especially emerging economies, should facilitate the choice of insolvency forum. Ideally, this choice of insolvency forum should be allowed ex ante. Thus, in addition to providing debtors and creditors with the possibility of having access to more attractive insolvency systems in the hypothetical event of financial distress, the ex ante choice of insolvency forum can promote predictability, access to finance and economic growth. Alternatively, if the insolvency forum cannot be chosen ex ante, at least it should be facilitated ex post. Regardless of the solution eventually adopted, this chapter explains that various safeguards need to be adopted to prevent the opportunistic choice or change of insolvency forum. It also argues that this new approach for the choice of insolvency forum requires certain changes to the rules governing cross-border insolvency and particularly those established in the UNCITRAL Model Law on Cross-Border Insolvency.

This chapter explains why the promotion of workouts and hybrid procedures can be particularly desirable in emerging economies, and more generally in countries with inefficient insolvency systems and companies with concentrated debt structures. Nonetheless, informal workouts are subject to certain limitations. For that reason, in addition to implementing several strategies to actively promote informal workouts, this chapter argues that emerging economies should adopt enhanced workouts where the support of certain norms or actors can facilitate a successful out-of-court restructuring. Finally, it is suggested that emerging economies should also implement hybrid procedures equipped with several tools existing in formal reorganization procedures. Yet, while hybrid procedures generally require miminal court involvement, it is argued that the design of these procedures in emerging economies should limit the involvement of the judiciary even further. This chapter explains how this goal can be achieved while simultaneously increasing the protection of creditors against the potential opportunism of debtors.

Micro- and small enterprises (MSEs) represent the majority of businesses in most countries around the world. Despite the economic relevance of MSEs, most jurisdictions do not provide a suitable insolvency framework for MSEs. This chapter starts by analyzing the particular features of MSEs as well as the need to provide them with a simplified insolvency framework. It then discusses the solutions and policy recommendations that the academic literature and various international organizations have suggested for the design of a simplified insolvency regime for MSEs. This chapter concludes by proposing several pillars for the design of an efficient insolvency framework for MSEs in the context of emerging economies.

This chapter examines the market and institutional environments existing in emerging economies. Therefore, it provides the basis for the understanding of the insolvency framework for emerging economies suggested in this book. Despite the divergences existing across jurisdictions, this chapter shows that most emerging economies share some common features, including the existence of an institutional environment that generally comprises an inefficient judicial system, high levels of corruption, low levels of protection of property rights, and a weak rule of law. Other features commonly found in emerging economies include the existence of underdeveloped financial systems and the prevalence of micro- and small enterprises and large controlled firms. This chapter concludes by highlighting the fact that some features generally existing in emerging economies are also found in many advanced economies. Therefore, it will be argued that various policy recommendations suggested for the improvement of insolvency law in emerging economies can also be suitable for advanced economies.

This chapter seeks provide a general overview of insolvency systems around the world, including examples and references from more than 50 jurisdictions from Asia and the Pacific, Africa, Europe, the Americas and the Middle East. Due to a variety of legal, economic and historical reasons, it will be shown that insolvency laws in advanced economies and emerging markets and developing economies (EMDEs) share many similarities. It will be argued that the adoption of "international best practices" and undesirable legal transplants have also contributed to these similarities. Interestingly, the divergences generally found in the design of insolvency law in advanced economies and EMDE do not seem to respond to their different market and institutional environments. Instead, they are usually explained by other factors such as legal origins, the different motivation and political economy of insolvency reforms, or the moment in which a particular insolvency legislation was enacted. It will be argued that the lack of an insolvency law tailored to the market and institutional environment existing in EMDEs has contributed to the failure of their insolvency law.