scholarly journals COVID-19 and inequalities: the need for inclusive policy response

2021 ◽  
Vol 43 (3) ◽  
Author(s):  
Farah Naz ◽  
Muhammad Ahmad ◽  
Asad Umair
2008 ◽  
pp. 107 ◽  
Author(s):  
Alice Woolley

Access to justice is an integral component of the legal system. However, the question of upon whose shoulders the obligation of ensuring this access should fall has been widely debated. In particular, do lawyers, as part ofthe legalprofession, have a special obligation to foster access to justice? In this article, the author explores the legitimacy of various arguments with respect to whether lawyers should carry this obligation to a greater extent than other members of society. The author begins by critiquing the traditional arguments related to imposing such an obligation on lawyers — for instance, the refined monopoly arguments. She then goes on to critically consider an alternative argument: that imperfections in the marketfor legal services justify the existence of a special obligation for lawyers. An examination of the limitations of this justification follows. Overall, the author concludes that while the arguments arising from imperfections in the legal market offer the best justification for seeing lawyers have a special obligation to ensure access tojustice, the claims from the argument are modest ones, and any policy response in furtherance of such an obligation should be similarly modest.


Author(s):  
Julian Oliver Dörr ◽  
Georg Licht ◽  
Simona Murmann

AbstractCOVID-19 placed a special role on fiscal policy in rescuing companies short of liquidity from insolvency. In the first months of the crisis, SMEs as the backbone of Germany’s economy benefited from large and mainly indiscriminate aid measures. Avoiding business failures in a whatever-it-takes fashion contrasts, however, with the cleansing mechanism of economic crises: a mechanism which forces unviable firms out of the market, thereby reallocating resources efficiently. By focusing on firms’ pre-crisis financial standing, we estimate the extent to which the policy response induced an insolvency gap and analyze whether the gap is characterized by firms which were already struggling before the pandemic. With the policy measures being focused on smaller firms, we also examine whether this insolvency gap differs with respect to firm size. Our results show that the COVID-19 policy response in Germany has triggered a backlog of insolvencies that is particularly pronounced among financially weak, small firms, having potential long-term implications on entrepreneurship and economic recovery.Plain English Summary This study analyzes the extent to which the strong policy support to companies in the early phase of the COVID-19 crisis has prevented a large wave of corporate insolvencies. Using data of about 1.5 million German companies, it is shown that it was mainly smaller firms that experienced strong financial distress and would have gone bankrupt without policy assistance. In times of crises, insolvencies usually allow for a reallocation of employees and capital to more efficient firms. However, the analysis reveals that this ‘cleansing effect’ is hampered in the current crisis as the largely indiscriminate granting of liquidity subsidies and the temporary suspension of the duty to file for insolvency have caused an insolvency gap that is driven by firms which were already in a weak financial position before the crisis. Overall, the insolvency gap is estimated to affect around 25,000 companies, a substantial number compared to the around 16,300 actual insolvencies in 2020. In the ongoing crisis, policy makers should prefer instruments favoring entrepreneurs who respond innovatively to the pandemic instead of prolonging the survival of near-insolvent firms.


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