December 14, 2004
Stanford Law School receives $3 million from John M. Olin Foundation
The John M. Olin Foundation has awarded Stanford Law School a final $3 million gift, capping off a total of $8.3 million the school has received from the foundation for its John M. Olin Program in Law and Economics.
"It would be difficult to overstate the importance of what the John M. Olin Foundation has done for Stanford," said Larry Kramer, the Richard E. Lang Professor and Dean of Stanford Law School. "With its support, we have built one of the finest programs in the country in law and economics."
Kathleen M. Sullivan, who served as the Stanley Morrison Professor of Law and school dean from 1999 to 2004, and A. Mitchell Polinsky, the Josephine Scott Crocker Professor of Law and Economics and the Olin Program director, jointly worked with the foundation to obtain the final gift. "The foundation's generosity to Stanford has furthered both the mission of the foundation to establish the field of law and economics and the academic goals of the school," Sullivan said.
Since its inception in 1987, the John M. Olin Program has provided students and faculty with a keener understanding of the economic impacts of the law. One hundred thirty-five distinguished scholars from the United States and abroad have given presentations at the Law and Economics Seminar, and faculty have produced 296 working papers, most of which have been published in premier journals of law and economics.
Recent papers have examined, for example, mandated disclosure in securities markets, antitrust policy in China, the choice between fines and imprisonment as sanctions, the role of food taxes in developed economies and the liability risk of outside directors.
In addition, the school has awarded 369 faculty and student research grants, which have supported wide-ranging studies on topics such as the effect of corporate governance on firms' market values, the growth of employment discrimination cases in the 1990s, an evaluation of coupon settlements in antitrust cases and the role of institutional investors in opposing anti-takeover provisions in initial public offerings.
One of the measures of the success of Stanford's program is the number of students who have gone on to academic careers focused on the economic analysis of law. Graduates now teach in the economics departments or law or business schools at Columbia, Cornell, Emory, Harvard, London School of Economics, Minnesota, Northwestern, Pennsylvania, Stanford, Texas, University of California-Berkeley, University of Southern California and Wisconsin.
"The John M. Olin Foundation is really the organization that has caused this to happen," Polinsky said. "Understanding the relationship between law and economics helps lawyers and policymakers think more clearly about the problems they work on. It helps them avoid designing laws that are inefficient and lower the welfare of society."
Stanford's program recently expanded to include more postdoctoral training and to focus on empirical research—the collection of statistical information on the results of law and legal practices. Three new faculty appointments reflect this emphasis: Robert Daines in corporate law, Mark Lemley in intellectual property law and Alison Morantz in employment law. In addition, Professor Daniel Kessler of the Stanford Graduate School of Business has become a professor, by courtesy, at the Law School, teaching antitrust law. All four are accomplished empirical researchers.
The $3 million gift from the foundation has a 2-to-1 matching requirement, meaning that for every dollar provided by the foundation, the Law School must raise two dollars. This arrangement is intended to help the Law School secure other sources of funding for the program.
The John M. Olin Foundation, launched in 1953 by the late inventor and industrialist, encourages research on public policy in social and economic fields. It is spending itself out of existence and is expected to cease operations in 2005.