The Institutional Dynamics Of Transition Relief

Whether and how to provide transition relief from a change in legal regime is a question of critical importance. Legislatures and agencies effect changes to the law constantly, and affected private actors often seek relief from those changes, at least in the short term. Scholarship on transition relief therefore has focused almost entirely on examining when transition relief might be justified and now recognizes that there may be settings where relief from legal transitions is appropriate. Yet largely absent from these treatments is an answer to the question of which institutional actor is best positioned to decide when legal transition relief is appropriate and what form it should assume. In this Article, we address this issue in two parts: Can the private market develop adequate risk-spreading devices such that government relief is unnecessary? If government relief is warranted, what government actors are best suited to provide relief? We find that private markets will be unable to provide adequate transition insurance due to insurmountable pricing difficulties, and that the task must thus fall to governmental actors. We then analyze the available governmental actors and conclude that, in many cases, an independent agency will be best positioned to make reliable and welfare-enhancing decisions regarding transition relief.