Hostname: page-component-76fb5796d-5g6vh Total loading time: 0 Render date: 2024-04-26T21:36:31.877Z Has data issue: false hasContentIssue false
  • English
  • Français

Public-Private Governance Initiatives and Corporate Responses to Stakeholder Complaints

Published online by Cambridge University Press:  28 April 2021

Calvin Thrall
Get access

Abstract

Multinational firms operate in multiple national jurisdictions, making them difficult for any one government to regulate. For this reason the firms themselves are often in charge of their own regulation, increasingly in conjunction with international organizations by way of public-private governance initiatives. Prior research has claimed that such initiatives are too weak to meaningfully change firms’ behavior. Can public-private governance initiatives help firms self-regulate, even if they lack strong monitoring or enforcement mechanisms? I take two steps toward answering this question. First, I introduce a new measure of firms’ performance on ESG (environmental, social, and governance) issues: the extent to which the firms issue public responses to claims of misconduct from civil society actors. Second, I argue that public-private governance initiatives allow firms to benefit from the legitimacy of their public partners, lowering the reputational cost of transparent response. Employing novel data on firm responses to human rights allegations from the Business and Human Rights Resource Center, I find that membership in the largest and most prominent initiative, the United Nations Global Compact, significantly increases firms’ propensity to respond transparently to stakeholder allegations. These results suggest a limited but important role for public-private initiatives in global governance.

Keywords

International political economypublic-private governancemultinational corporationsESGcorporate social responsibilityhuman rights
Type
Research Article
Information
International Organization , Volume 75 , Issue 3 , Summer 2021 , pp. 803 - 836
Copyright
Copyright © The IO Foundation 2021

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Abbott, Kenneth W., Genschel, Philipp, Snidal, Duncan, and Zangl, Bernhard. 2015. Orchestration: Global Governance Through Intermediaries. In International Organizations as Orchestrators, edited by Abbott, Kenneth W., Genschel, Philipp, Snidal, Duncan, and Zangl, Bernhard, 3–36. Cambridge University Press.Google Scholar
Abbott, Kenneth W., Green, Jessica F., and Keohane, Robert O.. 2016. Organizational Ecology and Institutional Change in Global Governance. International Organization 70 (2):247–77.CrossRefGoogle Scholar
Ahlquist, John S., and Mosley, Layna. 2021. Firm Participation in Voluntary Regulatory Initiatives: The Accord, Alliance, and US Garment Importers from Bangladesh. The Review of International Organizations 16 (2):317–43.CrossRefGoogle Scholar
Alves, Amanda M. 2020. Corporate Political Strategies in Europe: The Determinants of Firms’ Access to the European Commission. Business and Politics 22 (2):307–38.CrossRefGoogle Scholar
Angrist, Joshua D., and Krueger, Alan B.. 2001. Instrumental Variables and the Search for Identification: From Supply and Demand to Natural Experiments. Journal of Economic Perspectives 15 (4):69–85.CrossRefGoogle Scholar
Angrist, Joshua D., and Pischke, Jörn-Steffen. 2009. Mostly Harmless Econometrics. Princeton University Press.CrossRefGoogle Scholar
Bäckstrand, Karin, and Kuyper, Jonathan W.. 2017. The Democratic Legitimacy of Orchestration: The UNFCCC, Non-state Actors, and Transnational Climate Governance. Environmental Politics 26 (4):764–88.CrossRefGoogle Scholar
Barnett, Michael N. 1997. Bringing in the New World Order: Liberalism, Legitimacy, and the United Nations. World Politics 49 (4):526–51.CrossRefGoogle Scholar
Barrientos, Stephanie, and Smith, Sally. 2007. Do Workers Benefit from Ethical Trade? Assessing Codes of Labour Practice in Global Production Systems. Third World Quarterly 28 (4):713–29.CrossRefGoogle Scholar
Bartley, Tim. 2018. Rules without Rights: Land, Labor, and Private Authority in the Global Economy. Oxford University Press.CrossRefGoogle Scholar
Bartley, Tim, and Child, Curtis. 2014. Shaming the Corporation: The Social Production of Targets and the Anti-sweatshop Movement. American Sociological Review 79 (4):653–79.CrossRefGoogle Scholar
Beck, Nathaniel. 2018. Estimating Grouped Data Models with a Binary Dependent Variable and Fixed Effects: What Are the Issues? Working paper.Google Scholar
Bennie, Lynn, Bernhagen, Patrick, and Mitchell, Neil J.. 2007. The Logic of Transnational Action: The Good Corporation and the Global Compact. Political Studies 55 (4):733–53.CrossRefGoogle Scholar
Berliner, Daniel, and Prakash, Aseem. 2012. From Norms to Programs: The United Nations Global Compact and Global Governance. Regulation and Governance 6 (2):149–66.CrossRefGoogle Scholar
Berliner, Daniel, and Prakash, Aseem. 2015. “Bluewashing” the Firm? Voluntary Regulations, Program Design, and Member Compliance with the United Nations Global Compact. Policy Studies Journal 43 (1):115–38.CrossRefGoogle Scholar
Bernhagen, Patrick, and Mitchell, Neil J.. 2010. The Private Provision of Public Goods: Corporate Commitments and the United Nations Global Compact. International Studies Quarterly 54 (4):1175–87.CrossRefGoogle Scholar
Carnegie, Allison, and Carson, Austin. 2018. The Spotlight's Harsh Glare: Rethinking Publicity and International Order. International Organization 72 (3):627–57.CrossRefGoogle Scholar
Carnegie, Allison, and Carson, Austin. 2019. The Disclosure Dilemma: Nuclear Intelligence and International Organizations. American Journal of Political Science 63 (2):269–85.CrossRefGoogle Scholar
Claude Inis, L. Jr. 1966. Collective Legitimization As a Political Function of the United Nations. International Organization 20 (3):367–79.CrossRefGoogle Scholar
Coppedge, Michael, Gerring, John, Knutsen, Carl Henrik, Lindberg, Staffan I., Skaaning, Svend-Erik, Teorell, Jan, Altman, David, et al. 2018. V-Dem Country-Year Dataset v8.Google Scholar
Dellmuth, Lisa Maria, and Tallberg, Jonas. 2015. The Social Legitimacy of International Organisations: Interest Representation, Institutional Performance, and Confidence Extrapolation in the United Nations. Review of International Studies 41 (3):451–75.CrossRefGoogle Scholar
DiMaggio, Paul J., and Powell, Walter W.. 1983. The Iron Cage Revisited: Institutional Isomorphism and Collective Rationality in Organizational Fields. American Sociological Review 48 (2):147–60.CrossRefGoogle Scholar
Distelhorst, Greg, and Locke, Richard M.. 2018. Does Compliance Pay? Firm-Level Trade and Social Institutions. American Journal of Political Science 62 (3):695–711.CrossRefGoogle Scholar
Distelhorst, Greg, Locke, Richard M., and Samel, Hiram. 2015. Production Goes Global, Compliance Stays Local: Private Regulation in the Global Electronics Industry. Regulation and Governance 9:224–42.CrossRefGoogle Scholar
Dobbin, Frank, Simmons, Beth, and Garrett, Geoffrey. 2007. The Global Diffusion of Public Policies: Social Construction, Coercion, Competition, or Learning? Annual Review of Sociology 33 (1):449–72.CrossRefGoogle Scholar
Dorobantu, Sinziana, Aguilera, Ruth V., Luo, Jiao, and Milliken, Frances J.. 2018. Introduction: Contemplating the Connections Between Sustainability, Stakeholder Governance, and Corporate Social Responsibility. In Sustainability, Stakeholder Governance, and Corporate Social Responsibility, edited by Dorobantu, Sinziana, Aguilera, Ruth V., Luo, Jiao, and Milliken, Frances J., 1–17. Emerald Publishing.CrossRefGoogle Scholar
Downs, George W., Rocke, David M., and Barsoom, Peter N.. 1996. Is the Good News About Compliance Good News About Cooperation? International Organization 50 (3):379–406.CrossRefGoogle Scholar
Duflo, Esther, Greenstone, Michael, Pande, Rohini, and Ryan, Nicholas. 2013. Truth-Telling by Third-Party Auditors and the Response of Polluting Firms: Experimental Evidence from India. Quarterly Journal of Economics 128 (4):1499–545.CrossRefGoogle Scholar
Evans, Alice. 2020. Overcoming the Global Despondency Trap: Strengthening Corporate Accountability in Supply Chains. Review of International Political Economy 27 (3):658–85.CrossRefGoogle Scholar
Fearon, James D. 1994. Domestic Political Audiences and the Escalation of International Disputes. The American Political Science Review 88 (3):577–92.CrossRefGoogle Scholar
Finnemore, Martha, and Sikkink, Kathryn. 1998. International Norm Dynamics and Political Change. International Organization 52 (4):887–917.CrossRefGoogle Scholar
Goodman-Bacon, Andrew. 2019. Difference-in-Differences with Variation in Treatment Timing. Working paper.CrossRefGoogle Scholar
Hainmueller, Jens, and Hangartner, Dominik. 2013. Who Gets a Swiss Passport? A Natural Experiment in Immigrant Discrimination. American Political Science Review 107 (1):159–87.CrossRefGoogle Scholar
Hainmueller, Jens, Hiscox, Michael J., and Sequeira, Sandra. 2014. Consumer Demand for Fair Trade: Evidence from a Multistore Field Experiment. Review of Economics and Statistics 96 (4):638–47.Google Scholar
Hassel, Anke. 2008. The Evolution of a Global Labor Governance Regime. Governance 21 (2):231–51.CrossRefGoogle Scholar
Haufler, Virginia. 2010. Disclosure as Governance: The Extractive Industries Transparency Initiative and Resource Management in the Developing World. Global Environmental Politics 10 (3):53–73.CrossRefGoogle Scholar
Hurd, Ian. 1999. Legitimacy and Authority in International Politics. International Organization 53 (2):379–408.CrossRefGoogle Scholar
Imai, Kosuke, and Kim, In Song. 2020. On the Use of Two-way Fixed Effects Regression Models for Causal Inference with Panel Data. Political Analysis, 1–11. doi:10.1017/pan.2020.33.Google Scholar
Jensen, Nathan M., and Malesky, Edmund J.. 2018. Nonstate Actors and Compliance with International Agreements: An Empirical Analysis of the OECD Anti-Bribery Convention. International Organization 72 (1):33–69.CrossRefGoogle Scholar
Johnson, Tana. 2014. Organizational Progeny. Oxford University Press.CrossRefGoogle Scholar
Kamenica, Emir, and Brad, Louisa Egan. 2014. Voters, Dictators, and Peons: Expressive Voting and Pivotality. Public Choice 159 (1/2):159–76.CrossRefGoogle Scholar
Katz, Ethan. 2001. Bias in Conditional and Unconditional Fixed Effects Logit Estimation. Political Analysis 9 (4):379–84.CrossRefGoogle Scholar
Koremenos, Barbara, Lipson, Charles, and Snidal, Duncan. 2001. The Rational Design of International Institutions. International Organization 55 (4):761–99.CrossRefGoogle Scholar
Lenz, Gabriel, and Sahn, Alexander. 2020. Achieving Statistical Significance with Control Variables and without Transparency. Political Analysis, 1–14. doi:10.1017/pan.2020.31.Google Scholar
Levy, David L., and Prakash, Aseem. 2003. Bargains Old and New: Multinational Corporations in Global Governance. Business and Politics 5 (2):131–50.CrossRefGoogle Scholar
Lim, Alwyn, and Tsutsui, Kiyoteru. 2012. Globalization and Commitment in Corporate Social Responsibility: Cross-national Analyses of Institutional and Political-economy Effects. American Sociological Review 77 (1):69–98.CrossRefGoogle Scholar
Malesky, Edmund J., and Mosley, Layna. 2018. Chains of Love? Global Production and the Firm-Level Diffusion of Labor Standards. American Journal of Political Science 62 (3):712–28.CrossRefGoogle Scholar
Malhotra, Neil, Monin, Benoît, and Tomz, Michael. 2019. Does Private Regulation Preempt Public Regulation? American Political Science Review 113 (1):19–37.CrossRefGoogle Scholar
Milner, Helen. 1991. The Assumption of Anarchy in International Relations Theory: A Critique. Review of International Studies 17 (1):67–85.CrossRefGoogle Scholar
Mwangi, Wagaki, Rieth, Lothar, and Schmitz, Hans Peter. 2013. Encouraging Greater Compliance: Local Networks and the United Nations Global Compact. In The Persistent Power of Human Rights: From Commitment to Compliance, edited by Risse, Thomas, Ropp, Stephen C., and Sikkink, Kathryn, 203–21. Cambridge University Press.CrossRefGoogle Scholar
Perkins, Richard, and Neumayer, Eric. 2010. Geographic Variations in the Early Diffusion of Corporate Voluntary Standards: Comparing ISO 14001 and the Global Compact. Environment and Planning A 42 (2):347–65.CrossRefGoogle Scholar
Potoski, Matthew, and Prakash, Aseem. 2005. Green Clubs and Voluntary Governance: ISO 14001 and Firms’ Regulatory Compliance. American Journal of Political Science 49 (2):235–48.CrossRefGoogle Scholar
Prakash, Aseem, and Potoski, Matthew. 2014. Global Private Regimes, Domestic Public Law: ISO 14001 and Pollution Reduction. Comparative Political Studies 47 (3):369–94.CrossRefGoogle Scholar
Ruggie, John Gerard. 1982. International Regimes, Transactions, and Change: Embedded Liberalism in the Postwar Economic Order. International Organization 36 (2):379–415.CrossRefGoogle Scholar
Ruggie, John Gerard. 2002. The Theory and Practice of Learning Networks. Journal of Corporate Citizenship 5 (Spring):27–36.CrossRefGoogle Scholar
Ruggie, John Gerard. 2013. Just Business: Multinational Corporations and Human Rights. Norton.Google Scholar
Short, Jodi L., Toffel, Michael W., and Hugill, Andrea R.. 2016. Monitoring Global Supply Chains. Strategic Management Journal 37:1878–97.CrossRefGoogle Scholar
Sovey, Allison J., and Green, Donald P.. 2011. Instrumental Variables Estimation in Political Science: A Readers’ Guide. American Journal of Political Science 55 (1):188–200.CrossRefGoogle Scholar
Tangled Up In Blue: Corporate Partnerships at the United Nations. 2000. Technical report September. TRAC—Transnational Resource and Action Center.Google Scholar
Westerwinter, Oliver. 2021. Transnational Public-private Governance Initiatives in World Politics: Introducing a New Dataset. Review of International Organizations 16:137–74.CrossRefGoogle Scholar
Supplementary material: PDF

Thrall supplementary material

Thrall supplementary material

Download Thrall supplementary material(PDF)
PDF 156.5 KB
Supplementary material: Link

Thrall Dataset

Dataset

https://doi.org/10.7910/DVN/YNVYO2
Link