[Kadens 2010] The last bankrupt hanged: balancing incentives in the development of bankruptcy law

Note: As a layperson in the extreme, I expect not to be offended in the least by mods editing the category of this or any other post if it would, in their judgment, get in the way of technical development of the protocol. I do not write parallelized software that needs to be compiled and executed on silicon; moreover, obviously, how reasonable you find my request to read at least a few pages of the paper before recategorizing in this particular instance is a matter ultimately at your discretion. However, at least just this once (read: without ruling out the possibility of categorizing bankruptcy-related topics as “multiparty computation” with similar emphasis in the future), I would respectfully request that extra expenditure of attention in reviewing such an operation. -P

ABSTRACT: This Article frames the history of the Anglo-American bankruptcy tradition as a search for solutions to the basic problem that has from the first underlain the bankruptcy process: how to obtain the assistance of a debtor in his financial dismantling. The pivotal moment in this story came in the years 1705 and 1706, when the English Parliament drafted a bill making the bankrupt’s refusal to cooperate with the commissioners running his bankruptcy a capital crime. Almost as an afterthought, they also introduced discharge of debt. Incentivizing cooperation with discharge would have a fruitful future. Coercing the debtor to be honest, however, proved a failure. Fraud flourished, and few perpetrators were executed, in part because creditors and jurors found putting bankrupts to death a bit excessive. And yet, despite the failure of the English experiment with harsh penalties, the desire to punish debtors has remained a part of the culture of bankruptcy to this day.

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1446818