This study examines how priority of workers’ claims vis-à-vis secured claims in
insolvency varies across jurisdictions and over time as a window into the shifting
treatment of distributional or social justice considerations in private law. The
comparative literature has traditionally focused on the extent to which laws in the
Global South are legal transplants from European countries belonging to the same
legal family or have more recently adhered to “neoliberal” prescriptions from the
United States or international organizations. At the same time, recent scholarship
on legal heterodoxy suggests that Global South jurisdictions have innovated in
incorporating broader distributional or public policy objectives in private law. Our
findings provide evidence of legal heterodoxy and highlight the limits of dominant
views by documenting (i) Global South-driven legal innovation and diffusion, with
Mexico’s 1917 constitution granting workers’ claims priority over secured claims
nearly two decades before comparable French legislation was enacted, and (ii)
significant persistence—and, in some cases, growing recognition—of priority
for workers’ claims across jurisdictions, despite strong contrary pressures from
international organizations such as the World Bank and UNCITRAL. We also
explore the role of state capacity in explaining legal heterodoxy in the Global
South and describe the emergence of sub rosa legal reforms that circumvent
workers’ priority in bankruptcy through new categories of insolvency-proof security
interests