Article

Public Authority and Private Rules: How Domestic Regulatory Institutions Shape the Adoption of Global Private Regimes

Authors:
To read the full-text of this research, you can request a copy directly from the authors.

Abstract

How might domestic regulatory institutions influence the adoption of global private regimes? We focus on the ISO 9001 and 14001 certification standards, which obligate firms to establish quality and environmental management systems. Previous research highlights the roles of international commercial audiences and national regulatory pressures as unconditional drivers of adoption. However, we argue that domestic regulatory institutions condition their effects—in opposite directions. Where regulatory institutions function well, firms facing high levels of regulatory pressure are more likely to seek ISO certification, but firms facing pressures from international audiences are less likely to do so. In contrast, weak regulatory institutions make export-oriented and foreign-owned firms more likely to seek ISO certification, but render firms facing high levels of regulatory pressure less likely to do so. We find support for our claims using firm-level data from 10,000 firms in 30 countries in Eastern Europe and Central Asia.

No full-text available

Request Full-text Paper PDF

To read the full-text of this research,
you can request a copy directly from the authors.

... On one hand, the creation of transnational initiatives like private certification, public-private partnerships, or city networks often responds to the environmental and social failures of global markets or the insufficiency of hierarchical public institutions (Andonova, Betsill, and Bulkeley 2009;Cashore, Auld, and Newsom 2004;Hoffmann 2011). On the other hand, the adoption of transnational initiatives is closely interdependent with the capacity of regional and domestic public institutions to create favorable environments for private self-regulation (Andonova 2014;Andonova, Hale, and Roger 2017;Bartley 2018;Berliner and Prakash 2014;Büthe and Mattli 2011). Thus Farrell and Newman (2014) speak of "new interdependence" of institutions, while Bartley (2011) refers to the "layering" of public and private regulations. ...
... While the voluntary carbon market itself could present incentives to invest in VCOs for profit, the actual opportunities to engage in transnational markets and certification imply the need to overcome a range of asymmetries in access to information, capacity, available technical skills, and capital (Clapp 1998;Hamilton et al. 2009;Schröder 2012). For certification in other sectors, it has been shown that public institutions and societal associations can have an important role in reducing such asymmetries (Espach 2006;Rivera 2004; van Kooten, Nelson, and Vertinsky 2005) and mediating incentives associated with transnational markets (Bartley 2011;Berliner and Prakash 2014). Our framework develops further this line of inquiry by specifying how international institutions as well as linkages to domestic concerns and public policies are likely to influence the adoption of VCO programs in developing countries. ...
... The comparative literature on the layering of public and private rules suggests, however, that the politics of private regulation in the developing world is more dynamic. It highlights the interplay between transnational rules and domestic policies and institutions in shaping different motivations and ability to engage in transnational regulation (Andonova 2014;Auld, Betsill, and VanDeveer 2018;Berliner and Prakash 2014;Cashore et al. 2006;Espach 2006;Rivera 2004). ...
Article
In the Paris Agreement era of climate governance, private market-based initiatives are expected to play a catalytic role in achieving global commitments. However, the literature has been largely silent on the political causes of the variable and often limited uptake of such initiatives in the Global South. This article uses original project-level data to investigate the participation in voluntary carbon offset (VCO) programs across developing countries. We argue that, paradoxically, access to formal international institutions and linkages with domestic priorities are key factors for participation in voluntary carbon markets, reducing asymmetries in information, capacity, and interest in developing contexts. Our statistical analysis finds that institutions such as the Clean Development Mechanism and targeted foreign aid, as well as domestic concerns such as climate vulnerability and advancing renewable energy, shape in important ways the variable engagement in VCO projects. Our analysis also suggests that the design of private regulations can be fine-tuned to better capture synergies between local concerns and transnational climate action.
... Nongovernmental, or private, actors-such as trade associations, professional bodies, technical organizations, and activist groups-have increasingly established private governance institutions to coordinate their activities (Auld, Bernstein, & Cashore, 2008;Bernstein & Cashore, 2007;Buthe & Mattli, 2011;Cashore, 2002;Chan, Falkner, Goldberg, & van Asselt, 2016;Cutler, Haufler, & Porter, 1999;Eisner, 2004;Newman & Bach, 2004;Pattberg, 2005;Renckens, 2015;Ronit & Schneider, 1999;Tsutsui & Lim, 2015;Vogel, 2008). Despite this, recent scholars have attempted to "bring the state back in"-albeit in nuanced ways-in their study of private authority regimes in environmental governance Bartley, 2014Bartley, , 2018bBerliner & Prakash, 2014;Hysing, 2009;. This article aims to contribute to this broader discussion about the role of nonstate and private actors in transnational private governance. ...
... With notable exceptions (e.g., Berliner & Prakash, 2014;Hsueh, 2017), most previous research on private governance has examined "country" as its unit of analysis and typically explored the unconditional effects of domestic and international regulatory pressures. Instead, this article shines the spotlight on firms-global businesses in particular-as strategic actors and nodes of decision making. ...
... Private authority has proliferated, particularly in the climate governance area (Bulkeley et al., 2014;Green, 2010Green, , 2013Roger et al., 2017). A key driver of corporations' willingness to undertake nontrivial costs to participate in private governance regimes is firms' relationships with regulators and regulatory institutions (Berliner & Prakash, 2014;Hsueh, 2017;Hsueh & Prakash, 2012;Prakash & Potoski, 2006, 2014. 2 The state remains an important structural force in influencing private governance modes. Andonova et al. (2017) emphasize the dynamic relationship between national policies and transnational private governance in their study of the aggregated uptakes of transnational climate initiatives across countries. ...
... The impact that globalization and increased international trade has on the natural environment and sustainability of business practices has been much debated in academic and practitioner circles (Kolk, 2016). Proponents of the view that trade enhances environmental performance appeal to a process whereby the regulatory standards and norms of highly regulated jurisdictions get transmitted to suppliers in less regulated jurisdictions (Berliner & Prakash, 2014;Christmann & Taylor, 2001;Cole, Elliott, & Shimamoto, 2006;Prakash & Potoski, 2014). This is sometimes referred to as the "California effect" (Vogel, 1997). ...
... Depending upon where a firm primarily operates, ISO 14001 accreditation may provide it with reputational and goodwill gains across the range of stakeholders including customers, suppliers, employees, local communities, NGOs (nongovernmental organizations), investors, and regulators (Berliner & Prakash, 2015). In particular, ISO 14001 provides a credible signal of environmental stewardship to commercial audiences that transcends national borders (Berliner & Prakash, 2014;Christmann & Taylor, 2001;Prakash & Potoski, 2006). Accordingly, business scholars examining the determinants of ISO 14001 adoption have routinely included whether the firm "export" as an independent variable in regressions seeking to explaining ISO adoption. ...
... Contributors to the literature sometimes omit detailed discussion of the theoretical foundations for the variables contained in the regressions that they report, though the compilation of variables suggests that both incentive and norm-based approaches are considered in this literature. The inclusion of institutional descriptors capturing the networks, industry sector, and the wider environment in which the firm operates is accounted for by many authors reflecting assumptions that external commercial audiences and domestic regulatory and stakeholder pressures influence certification in potentially different ways (Berliner & Prakash, 2014). Some implicitly recognize that exporting firms operate in both a home and at least one foreign country and are thus subject to different norms and rules that are internalized through mimetic, normative, and coercive processes (Hauser & Hogenacker, 2014;Kostova, 1999;Kostova & Zaheer, 1999). ...
Article
Does the export orientation of a firm affect the likelihood that it adopts an environmental management certification? We use meta-regression methods to analyze systematically the corpus of published research on export-led adoption of the largest and most prominent certification, ISO 14001. We show that the explanatory variables authors choose to include in their models reflect the tenets of stakeholder and institutional theories. We also find that the literature suffers from substantial publication bias but that, once this is accounted for appropriately, a genuine effect remains. The evidence from 20 years of published studies taken as a whole is that export does incentivize the adoption of the standard as often hypothesized by proponents of voluntary approaches and self-regulation.
... Companies want to achieve their commitments in an efficient way and thus engage in TCG initiatives once nationallevel mitigation policy instruments have been established. Similar arguments about complementarities are made in the general literature on TCG initiatives (Berliner and Prakash 2014;Potoski and Prakash 2005) and by some of the articles in this issue. TCG initiatives may also influence government regulation, such as private carbon market standards that lead to an improvement in mandatory carbon market regulation (Hoffmann 2011). ...
... In this case, the firms can reduce transaction costs of the verification process. This obviously hinges on the seriousness of the national verification process, including the absence of corruption (Berliner and Prakash 2014). ...
... Companies want to achieve their commitments in an efficient way and thus engage in TCG initiatives once nationallevel mitigation policy instruments have been established. Similar arguments about complementarities are made in the general literature on TCG initiatives (Berliner and Prakash 2014;Potoski and Prakash 2005) and by some of the articles in this issue. TCG initiatives may also influence government regulation, such as private carbon market standards that lead to an improvement in mandatory carbon market regulation (Hoffmann 2011). ...
... In this case, the firms can reduce transaction costs of the verification process. This obviously hinges on the seriousness of the national verification process, including the absence of corruption (Berliner and Prakash 2014). ...
Article
The Paris Agreement of December 2015 set a highly ambitious target for global climate change mitigation, but it remains unclear how it will be reached and the individual countries’ pledges do not add up to the overall target. Can transnational climate governance initiatives be expected to fill the gap? We assess 109 such initiatives based on four design criteria: existence of mitigation targets, incentives for mitigation, definition of a baseline, and existence of a monitoring, reporting and verification procedure. About half of the initiatives do not meet any of these criteria and not even 15% satisfy three or more. Many initiatives were created only for the purpose of networking. Orchestration by national governments and international organizations increases the number of criteria met. On average, the mitigation focus of new initiatives was highest during the “heyday” of the international climate policy regime between 2005 and 2010. While mitigation-oriented entrepreneurial initiatives are generally started only in response to existing regulation, sub-national governments and NGOs show some attempts to go beyond that and compensate for insufficient regulation at the national and international level. Yet, given the low overall quality assessment, transnational climate governance initiatives cannot be expected to fill the “mitigation gap”.
... The existing literature on transnational private governance has mainly focused on North-South (Berliner & Prakash, 2014;Espach, 2009;Prakash & Potoski, 2006) or North-North trade relationships (Cashore, Auld, & Newsom, 2004). This literature has produced a rich set of findings. ...
... Third, private governance does not exist in a vacuum, but interacts with public actors and institutions in complex ways (Berliner & Prakash, 2014;Green, 2014;Gulbrandsen, 2014). With respect to the state and its agents, we identify two groups of actors that can play an important role in the diffusion of private governance. ...
Article
Full-text available
Private governance programs are now an important source of regulation in global value chains – particularly in context of North–South trade. But can these programs play a similar role in the value chains feeding into fast-growing emerging markets like China and India? Most scholars doing research on the topic draw a pessimistic picture. They argue that the scope conditions for private sustainability governance are not yet present in these markets. Our analysis of the Roundtable on Sustainable Palm Oil – a leading non-state certification program – in China and India partially confirms this view. At the same time, however, we find that emerging markets are not a unified category. We observe that sustainable palm oil is beginning to gain momentum in China, whereas uptake in India remains much weaker. We trace this back to a number of key market conditions, which we show are more favorable in China. In addition, our analysis highlights the role of the Chinese state in creating awareness of and shaping firms’ interests in sustainable palm oil.
... These private governance initiatives allowed firms, NGOs and developed country governments to address some of the negative consequences of economic integration, without significantly limiting its scope (Bartley 2007;Fransen 2011;Knudsen and Moon 2017). 1 Some brands, including Knights Apparel, Apple, Levi Strauss & Co. and Nike, sought to define themselves as leaders in responsible production (Bartley et al. 2015;Berliner et al. 2015b). Firms based in developing countries used participation in global voluntary schemes to signal commitments to protecting workers and the environment (Berliner and Prakash 2014;Cao and Prakash 2011;Potoski and Prakash 2009). Indeed, Distelhorst and Locke (2018) find that manufacturing firms' compliance with labor and environmental standards is associated with a significant increase in purchases by supply-chain partners (also see Görg et al. 2016). 2 Research on effectiveness of these voluntary private governance schemes typically finds that they fall short in protecting workers, for a variety of reasons (Applebaum and Lichtenstein 2016, Berliner and Prakash 2015). ...
... On environmental governance, some consider how country-level factors, including public sector regulatory quality as well as levels of participation among trade and investment partners, affect national participation rates in voluntary environmental schemes (e.g. Berliner and Prakash 2014;Prakash and Potoski 2006;Prakash and Potoski 2007). Other analyses account for firms' selection into voluntary programs, but they address firm selection to avoid bias in their assessment of program outcomes, rather than treating selection as of direct theoretical interest (e.g. ...
Article
Full-text available
Most research on private governance examines the design and negotiation of particular initiatives or their operation and effectiveness once established, with relatively little work on why firms join in the first place. We contribute to this literature by exploring firms’ willingness to participate in two recent, high-profile private initiatives established in the aftermath of the Rana Plaza disaster in the Bangladesh ready-made garment (RMG) sector: the Accord on Building and Fire Safety and the Alliance for Worker Safety in Bangladesh. Using novel shipment-level data from U.S. customs declarations, we generate a set of firms that were “eligible” to join these remediation initiatives. We are able to positively attribute only a minority of US RMG imports from Bangladesh to Accord and Alliance signatories. Firms with consumer-facing brands, publicly-traded firms, and those importing more RMG product from Bangladesh were more likely to sign up for the Accord and Alliance. Firms headquartered in the USA were much less likely to sign onto remediation plans, especially the Accord.
... Existing scholarship on why individual actors engage in transnational governance has emphasized transnational "diffusion" processes, such as advocacy pressures and commodity chains, through which social and material pressures are transmitted (Bartley 2010;Dauvergne and Lister 2010;García-Johnson 2000;Perkins and Neumayer 2010;Prakash and Potoski 2006;Vogel 1995Vogel , 2005Vogel , 2008Vogel , 2010. By contrast, recent work shows that certain domestic political and institutional contexts will favor participation in transnational governance and their effectiveness more than others (Andonova, Hale, and Roger 2014;Berliner and Prakash 2014;Büthe and 1 Source: http://www.theclimategroup.org/what-we-do/news-and-blogs/un-backed-online-portal-to-track-businessand-sub-national-climate-commitments/ 2 For example, restricting the scope of the paper to the Global 500 firms means that I do not have to separately control for international trade, which is presumed to be relatively "fixed" across the Global 500 firms. ...
... Research on why individual actors engage in transnational governance has emphasized transnational "diffusion" processes, such as advocacy pressures and commodity chains, through which social and material pressures are transmitted (Bartley 2010;Dauvergne and Lister 2010;García-Johnson 2000;Perkins and Neumayer 2010;Prakash and Potoski 2006;Vogel 1995Vogel , 2005Vogel , 2008Vogel , 2010). More recent research shows that national levels of openness and connectedness to the rest of the international system are dependent on or endogenous to domestic politics (Berliner and Prakash 2014;Büthe and Mattli 2011;Hale and Roger 2014;Keohane and Milner 1996;Kollman and Prakash 2001;Prakash and Potoski 2014;Roger et al. 2015). In other words, certain domestic contexts will favor participation in transnational governance and their effectiveness more than others. ...
Article
Full-text available
This article focuses on the Global 500, which are the world?s largest companies by revenue, to examine the factors and dynamics internal to companies that motivate some corporations, but not others, to engage in transnational climate governance. Empirical results based on multilevel mixed-effects analyses, which separately identify the relative weight of firm and country-level factors, suggest that the likelihood that a firm participates in transnational climate governance (TCG) is higher when there exists a ?policy supporter? who champions sustainability policies and when a company adopts explicit sustainability practices, such as the incorporation of ESG (Environmental, Social and Governance) principles. Voluntary climate action and carbon disclosure are more likely to take place when a company has a large asset base and certifies with the ISO 14001 environmental management standard. Moreover, the level of civil liberties that corporations enjoy in their respective country of origin is associated with participation in TCG. A decomposition of the variance indicates that firm-level factors account for a majority of the variance in TCG participation. This study has implications for climate change governance and policies, which have increasingly focused on concrete climate solutions and innovations by nonstate and substate actors.
... Academic literature has highlighted a number of enabling and constraining conditions in greenhouse gas emissions reductions by state-level actions and transnational initiatives (e.g., Overdevest and Zeitlin, 2012;Berliner and Prakash, 2014;Scheffran and Froese, 2016). An increase in ambition of state-level NDCs would create a signal for transnational initiatives that economies are moving toward deep decarbonization, and therefore encourage them to take further action. ...
... Finally, scaling up climate finance and aligning financial flows with the deep decarbonization goal would provide additional resources to implement non-state actions. The adoption of ambitious longterm mitigation targets, policy instruments, and carbon market regulations at national level would create the necessary incentives for businesses to engage further in coordinated climate actions ( Berliner and Prakash, 2014). The relevance of transnational initiatives could be all the more visible in a future where national-level mitigation ambitions are declined into specific sectoral or subnational targets. ...
Book
Full-text available
In the annual Hamburg Climate Futures Outlook, CLICCS researchers make the first systematic attempt to assess which climate futures are plausible, by combining multidisciplinary assessments of plausibility. The inaugural 2021 Hamburg Climate Futures Outlook addresses the question: Is it plausible that the world will reach deep decarbonization by 2050?
... 8 ES are just beginning to be used by political scientists. For another application of these data, see Berliner & Prakash 2014. The data have been used by economists, such as La Porta and Shleifer (2014), who combine it with surveys of informal firms. ...
Article
Competing accounts of the effect of globalization on labor politics agree that firms influence regulations, but make contrasting predictions for which firms are most likely to oppose regulations. Using survey data from employers in 19,000 manufacturing firms in 82 developing countries, we examine the determinants of employers’ opinions toward labor regulation. In contrast to the predictions of optimistic theories of globalization, we find that (i) firms that export are more likely to have negative opinions toward labor regulation than those that sell domestically, and (ii) firms that receive foreign direct investment have similar views as firms that rely only on domestic capital. Further, we show that systematic differences in employers’ opinions depend on the intensity of the competitive pressures they face and their use of skilled workers. In doing so, we provide an empirically grounded account of the heterogeneous opinions of key actors in economic policymaking in developing countries.
... In addition to these various contradictory findings on the strategic value of management certifications, the relationship between government regulations and certified management standards have been shown to be highly complex. Some scholars have argued that regulatory pressure can influence the propensity of firms to obtain management certifications (Berliner & Prakash, 2014;King et al., 2005). Also, the attitude of the government toward a particular management system standard has an influence on the diffusion of that system (Delmas & Montes-Sancho, 2011). ...
Article
Full-text available
In transitional economies, the governing central authorities impose heavy regulatory burdens on firms, which results in great costs for business in terms of time, resources, and other constraints. However, quality assurance through decentralized institutions (such as private certified management standards) is rapidly becoming more prevalent. This study examines the contingent implications that such decentralized institutions have for centralized regulation by focusing on the relationship between international certifications and regulatory burdens. As two prominent features of the institutional environment in emerging economies, the threat of competition from the informal sector and corruption may influence the relationship between international certifications and regulatory burdens. These features are therefore examined in terms of their moderating roles. The study draws on institutional and signaling theories to interpret data from a survey conducted by the World Bank in China in 2012. The empirical results show that international certification is negatively associated with regulatory burdens. This relationship is strengthened by the threat of competition from the informal sector, but mitigated by a corrupt business environment. Our study contributes to the institutional literature and to research on international certifications, and it has implications for both business management and governmental policy.
... 57 Note that we have reversed this scale from its original direction in the WBES surveys, which was the opposite. 58 Berliner and Prakash (2014). In addition, our model includes additional country-level controls to capture the role of other factors that might influence firms' certification choices. ...
Article
While many scholars have studied “urban bias” in public policy, the potential for bias in the private provision of public goods has received little attention. Private certification is a mechanism encouraging private provision of environmental public goods. We show that within countries, there are often wide disparities in certification rates between firms located in urban and non-urban areas. However, these disparities can be mitigated if there is a countervailing force: scrutiny of firms' practices by key stakeholders. We suggest that the presence of strong civil society, independent media, a functioning state regulatory apparatus, and multinational owners can ameliorate the urban bias in certification uptakes. We test this argument with global, firm-level data covering over 40,000 firms in ninety-three countries. Our analyses suggest that an urban bias is mitigated when stakeholders—both public and private—have the freedom and capacity to scrutinize firms' activities.
... It has been argued that private regulatory systems are not transcendent. Rather, they are intertwined thickly with domestic laws, codes and practices (Trubek & Trubek, 2007;Bartley, 2011;Berliner & Prakash, 2014). Eberlein et al (2014) have consequently contended that it is important to understand how interactions between private and public forms of regulation impact on regulatory capacity and performance. ...
Article
Full-text available
This paper examines how far the workplace inspection program established under the 2013 Accord on Fire and Building Safety has served to improve safety in Bangladesh garment factories, and the extent to which its operation has been influenced by factors that the literature suggests are important in shaping the outcomes of private regulatory initiatives. The findings suggest that such regulation can generate positive outcomes, even in the absence of strong public regulatory support. They also caution against discounting the role of compliance-based enforcement strategies, while highlighting the importance of their adequate resourcing and transparency. Some support is also offered for the argument that such regulatory initiatives could directly influence the market dynamics that shape supplier working conditions.
... 24 See, for example, Perkins and Neumayer (2010) and the citations contained therein. 25 See Roger, Hale, and Andonova (2015), Berliner and Prakash (2014), and Prakash and Potoski (2014). Answering such questions constituted the subsequent research agenda of most second-generation quantitative studies of the effects of adoption. ...
Article
Full-text available
This article surveys the literature on transnational governance (TNG) and makes the case that the field of international relations (IR) is underestimating its scholarly value. Three main charges are commonly leveled at TNG scholarship, which broadly analyzes the importance for global governance of rules and rulemaking to coordinate nonstate actors across borders: (1) That TNG scholarship is too descriptive and nontheoretical; (2) that TNG research lacks methodological rigor, and thus its claims and conclusions are unreliable; and (3) that TNG itself is peripheral to what really matters for understanding the power dynamics of world politics. These criticisms seemed largely true for much of the early TNG scholarship from the 1970s to the 1990s. Yet, as the authors argue and document, TNG scholarship since 2000 is converging around explaining three “stages” of TNG—rule emergence, selection, and adoption—and increasingly is theoretically innovative, methodologically rigorous, and speaks to concerns that are central to the larger field of IR. Given this, greater attention to TNG by IR scholars, textbooks, and courses offers many rewards.
... 8 Also importantly, we find that the effect of ISO 9001 holds even in the context of weak public governance. Indeed, the program has a stronger injury-reducing effect where government's efforts to protect worker rights are weak and the respect for the rule of law is low (Berliner and Prakash, 2014;Borzel and Risse, 2010). ...
Article
Workplace safety is an important issue in global public policy. Given the failure of many governments to enforce their workplace safety laws, might voluntary programs help in this regard? Most studies on the effectiveness of voluntary programs focus on their first-order effects reflecting program goals. Yet, well-designed programs that focus on firms’ internal practices and policies can have significant spillover effects beyond the program objectives. This insight motivates our study of the second-order effect on occupational safety of ISO 9001, the most widely adopted voluntary standard in the world. While ISO 9001 is a quality management standard, the internal systems that ISO certified firms establish can improve workplace safety. This is because some workplace practices that lead to poor product quality also contribute to an unsafe working environment. Our empirical analysis covering 92 countries for the period 1993–2012 supports our argument. We find that 1 per cent increase in country-level ISO 9001 certification count is associated with 0.04 per cent decline in occupational injury rate (injury per 10,000 working population). Importantly, our finding is more pronounced where public law regarding workers’ rights is weak, suggesting that voluntary programs can fill in the governance gaps.
... The more empirically driven strand of this literature finds that, under specific conditions, private standards can strengthen the implementation of governmental labor regulation. Scholars posit, for example, that private regulation can be complementary to state regulation in developing countries and emerging economies and in this sense depends on the importance of the shadow of strong public regulation (Amengual 2010;Berliner and Prakash 2014;Coslovsky and Locke 2013). Distelhorst et al. (2017) have furthermore shown that the likelihood of remediation is higher when state regulation can punitively fine suppliers shown by audits of private regulatory initiatives to have violated labor rights than in cases involving weaker state regulatory contexts. ...
Article
Full-text available
Little consensus exists about the effectiveness of transnational private governance in domains such as labor, the environment, or human rights. The paper builds on recent scholarship on labor standards to emphasize the role of labor agency in transnational private governance. It argues that the relationship between transnational private regulatory initiatives and labor agency depends on three competences: first, the ability of workers’ organizations to gain access to processes of employment regulation, implementation, and monitoring; second, their ability to insist on the inclusion of employers and state agencies within such processes; and third, the ability of workers to effectively exercise leverage in pursuit of particular goals. The paper develops a framework, called hybrid production regime, for examining how workers’ capacity to act at the local level depends on how these three collective competences are addressed in the institutionalization of capital–labor relations between the transnational and national levels.
... To fix the CER and combat environmental issues, advanced economies implemented environmental laws with strong enforcement. Although, the situation is different in emerging economies, which shows a lack of seriousness in the enforcement of environmental law due to weak institutional capacity (Berliner & Prakash, 2014;Blackman, 2012). To supplement regulatory laxity, alternative cost-effective options are proposed and promoted by regulatory institutions, which are selfgoverned and market oriented. ...
Article
This study provides an understanding of motivational factors that lead to the adoption of an environmental management system (EMS) from the perspective of resource‐based view theory. Further, the role of EMS has been examined to reduce energy intensity by estimating the average treatment effect. Therefore, different logistic regression has been estimated to find out major motivational factors. Results from the logit model validate the role of firm's size, age, and ownership in motivating firms to adopt an EMS whereas regulatory pressure does not influence the firm's adoption of EMS. Furthermore, negative average treatment effect shows the effectiveness of certification in reducing energy intensity. The comparative analysis of sustainability report indicates that TATA Steel outperforms in terms of carbon emission intensity as compared with Steel Authority of Indian Limited, Jindal power and steel limited, JSW Steel, and average Indian firms. Nonetheless, top Indian steel companies are far behind the global best practices in terms of energy, water, emission, and effluent performance indicators.
... It is also important to highlight findings that show the motivational role of public administration towards environmental issues through the requirements of legal and regulatory compliance by companies. Various studies reveal that companies that perceive higher regulatory pressure are more likely to adopt environmental standards such as ISO 14001 [19,33,38,56,58,75,76], although it should be noted that other authors state that regulatory compliance seems to not be the main motivation for its adoption [42]. ...
Article
Full-text available
Over time, sustainability has gained a greater presence in companies and with consumers around the world, although it can be said that there is still some confusion in its conceptualization and in the identification of the driving factors. A part of the literature considers that environmental management systems (EMS) such as ISO 14001 are facilitating factors that allow organizational remodeling towards more sustainable production. For a better understanding, this paper presents a qualitative study with semi-structured interviews to analyze the perceptions that managers, employees, and quality managers have about the concept of sustainability and, given that environmental management systems are considered as motivational factors, it also analyzes the perceptions they have about the motivations, barriers, and expected benefits of their adoption in the olive food industry in southern Spain. It is possible to point out the existence of some confusion about the concept of sustainability, and that both regulatory and market factors such as image and reputation improvement, differentiation, and sales increases, especially in exports, are considered to be motivational for their implementation. This work contributes to the literature on sustainability and environmental management systems in sectors of activity with high environmental involvement, such as the agri-food industry.
... A large part of CSR research focuses on the 'business case' for firm officials addressing environmental or social concerns arising from a firm's core business activity, that is, the financial benefits related to this behaviour (see, e.g., Orlitzky, Schmidt, & Rynes, 2003). Only a small but steadily growing body of research focuses on the interaction of CSR with regulation (Berliner & Prakash, 2014;Bernhagen, Mitchell, & Thissen-Smits, 2013;Brown & Knudsen, 2015;Gjølberg, 2009;Jackson & Apostolakou, 2010;Kinderman, 2012;Knudsen, Moon, & Slager, 2015;Kollman & Prakash, 2001;Koos, 2012a;Potoski & Prakash, 2004;Steurer, 2010). These studies examine the embeddedness of CSR in institutions of the political economy that constitute various national business systems, varieties of capitalism and worlds of welfare, or environmental regulation (Esping-Andersen, 1990;Hall & Soskice, 2001;Martin & Swank, 2012;Swank & Martin, 2001;Whitley, 1999). ...
Article
This article addresses co-governance which can be defined as a dynamic interaction between public and private actors to secure the provision of common goods. Which types of relationship between public and private actors exist? Do the forms of co-governance change over time? When is the relationship between public and private actors cooperative, when is it competitive, and when do we witness conflictual relationships? These research questions lie at the heart of this introductory article, which seeks to shed further light on the origins and impacts of the various co-governance patterns. By reviewing the body of research on this topic, we show that different relationships between public and private actors exist, and that the forms of co-governance can also change over time. While the dominant form of co-governance is cooperation, one can also observe instances of competition or even conflict between public and private actors. Most importantly, we find that both public and private actors are ready to reclaim competences in areas where they perceive the other actor to have gained too much influence. As we discuss in this article, the degree of cooperation and competition mostly depends on the existing regulatory arrangements, the congruence of goals of the different actor groups, and the institutionalization of industrial relations. These insights help us to better understand the role co-governance can play in addressing complex public problems.
... 207-208), summarizing a number of studies, notes that corporate codes lack enforcement, and thus are very difficult to verify with any credibility, thus ensuring that while government avoids responsibility, nothing much changes in practice. Berliner and Prakash (2014), in a survey of Eastern European firms, find that the role of domestic state authorities in regulating sectors plays a crucial intermediary role in determining the effectiveness of private regimes through ensuring consistency of compliance. ...
Article
Corporations are playing increasingly significant roles in trying to resolve global governance issues through corporate social responsibility (CSR) policies and practices, in response to pressure by NGOs and cognizant consumers, and to activist shareholders. Many firms claim that they “can do well by doing good”, advertising their CSR initiatives as part of their brand. These pressures have converged towards an institutionalization of CSR, including being featured in both national and global agreements, with companies starting to work together in private regimes, and some with international organizations and NGOs in emerging mixed regimes. Examining three sectors: forestry, mining, and textiles, we find the results unsatisfactory in terms of transparency and enforcement. The article suggests improving domestic regulatory capacity via global pressure could improve governance outcomes by increasing the quality and consistency of local labour and environmental enforcement.
... Moreover, government policies not directly related to TBG initiatives may in practice affect, interact and interfere with TBG implementation on the ground. As such, our perspective builds on insights of an increasingly rich literature on the implementation of private standards (Berliner & Prakash, 2014;Distelhorst et al., 2015;Espach, 2009;Manning et al., 2012). ...
Article
Full-text available
Recent scholarship on transnational business governance has begun to examine public-private interactions and the active role of governments. We make two key contributions that integrate and expand this literature. First, in juxtaposition to functionalist accounts, we foreground the fundamentally political and often contentious character of these interactions. As private transnational governance schemes and standards 'hit the ground', private-public interactions, we argue, are embedded in national political arenas and tied to domestic distributional struggles among competing regulatory coalitions. Building upon multiple empirical streams of research, we develop a political-strategic framework that maps the diversity of Southern government responses (substitute, adopt, repurpose, replace or reject) to transnational private governance. Our framework shows that government responses are a function of both strategic fit with domestic industrial capabilities and structures, and strength of developmental state capacity. Second, our proposed framework adopts the vantage point of Global South governments and industries, particularly how development challenges and strategic options within global value chains affect their understanding of, and responses to, transnational schemes and standards. This is an important corrective to a Northern bias in the private governance literature.
... Departing from the literature emphasizing that non-state institutions need to be understood in the context of the shadow of the state (Berliner & Prakash, 2014;Prakash & Potoski 2014), Borzel and Risse suggest that whether institutions operate in the state's shadow or in sunshine may not have much relevance to their efficacy. They focus instead on the role of informal institutions grounded in social trust to identify the conditions effective institutions need to emerge and contribute to the provision of public goods. ...
Article
There is a wide-spread perception among academics and commentators that institutional dysfunction has become increasingly common in important social, political, and economics arenas. Opinion polls show a decline in trust and confidence in major actors and institutions, including inter-governmental organizations, governments, firms, NGOs, and religious organizations. For some, the core of the problem is that the hitherto well-functioning states have become less effective in aggregating and acting upon citizens' preferences. Many policy initiatives of the 1990s - deregulation, privatization, new public management, private regulation, regional integration, civil society, and so on - seemed to have failed to meet expectations. This symposium seeks to identify important theoretical and empirical questions about institutional failure, such as why do institutions fail, why are they not self-correcting, what might be a clear evaluative yardstick and analytic approach by which to measure performance, and to what extent contemporary theories of institutional evolution and design are useful in examining institutional restructuring and institutional renewal? Symposium essays by leading social science scholars offer important insights to inform future work on institutional performance and outline an agenda for institutional renewal and change.
... Within the cross country diffusion literature, another stream examines ISO 14001 adoption behavior of developing country firms in the context of debates on globalization and global economic integration (e.g., Prakash and Potoski, 2006;Prakash and Potoski, 2007;Berliner and Prakash, 2013;Berliner and Prakash, 2014). While this literature is not necessarily focused on developing countries explicitly, their findings have significant implications for understanding ISO 14001 adoption behavior among developing country firms. ...
Conference Paper
Voluntary environmental initiatives (VEIs) by firms are often viewed as important for environmental management in developing countries such as India with weak regulatory institutions and poor enforcement of environmental laws. Past research shows that while VEIs may not be able to fully substitute for strong regulation, they could be useful complements to reduce environmental degradation in developing countries. In India, new government initiatives such as "Make in India" are geared towards significantly increasing the manufacturing output in the next few years. In this context, our paper studies the adoption of a widely employed VEI-the ISO 14001 standards certification-among the Indian manufacturing industries. Using the theoretical framework of Earnhart, Khanna, and Lyon (2014) on the drivers of corporate environmental strategies in emerging economies, we hypothesize that the likelihood of adoption of ISO 14001 standards among Indian manufacturing industries is a function of internal firm characteristics, input and output market pressures, and regulatory pressure. We test our hypotheses using a survey of 1000 (large, medium, and small) manufacturing firms across the country, conducted under the aegis of the World Bank in 2016. Results show that internal firm characteristics such as large size and firm innovation have a positive association with the likelihood of adopting ISO 14001 standards. Output market pressures, such as exporting to foreign markets, also positively impact the likelihood of obtaining ISO 14001 certification. In particular, exporting to China, which is ranked first in the number of ISO 14001 adoptions, has a statistically significant impact on probability of adoption. There is no evidence, however, that predominantly consumer-facing firms, another potential indicator of output market pressure, are more likely to adopt ISO 14001 standards. We also find state-fixed effects, potentially capturing the variation in both formal and informal regulatory pressure across states. Thus, consistent with other research in developing countries, we find that pressure to meet the environmental standards of countries to which firms in developing countries export their products acts as a strong incentive to adopt VEIs such as ISO 14001 standards. The lack of evidence that consumer-facing firms are no more likely to adopt ISO 14001 standards potentially indicate that firms in India do not yet find the green consumer markets large enough to adopt VEIs.
Article
What determines the uptake of private sustainability regulation in developing countries? Existing studies point to the local context as the key explanatory factor. In particular, they identify local program characteristics, industry structures, and the regulatory environment as variables influencing program uptake at the point of production. However, examining two very similar certification programs in Brazil's soy and sugarcane industries, this article finds that local conditions fail to account for the observed patterns. A “local explanation” would have predicted similar levels of industry uptake in the two sectors. Conversely, it is found that Brazil's soy producers first backed but then opposed private sustainability regulation, whereas in the sugarcane sector the dynamic was exactly the opposite. Through an in-depth analysis and cross-case comparison this article reveals how changing transnational conditions were decisive in shaping these outcomes. Specifically, shifting end markets exposed the two sectors to different economic and regulatory pressures.
Article
International environmental and quality standards in Africa are seen as being driven by pressure from international markets and importers. This study presents a conceptual framework where other stakeholders and plant resources are included in the argument for standards. We argue that among other stakeholders, international banks as creditors are important determinants. International banks, most of which are committed to sustainable practices, facilitate the diffusion of standards; they also perform sustainability-related risk-analysis urging customers to demonstrate corporate social responsibility. Our results also suggest that foreign ownership, plant size and business communications through company website are important for the adoption of standards in Africa.
Article
Full-text available
문재인 정부는 신산업 규제혁신 원칙으로 포괄적 네거티브 규제전환을, 이를 달성하는 방법으로 입법방식 유연화와 규제샌드박스를 제시하고 규제개혁을 추진해왔다. 그러나 활발히 진행되고 있는 규제샌드박스와 달리 입법방식 유연화는 상대적으로 더디게 진행되고 있다. 본 논문의 목적은 신산업 규제혁신의 새로운 원칙으로 유연한 규제를 제시하고 그 개념과 근거를 이론적으로 정립하는 것이다. 포괄적 네거티브 규제개혁의 제도화 과정 및 스마트 모빌리티, 바이오헬스, 핀테크 분야의 포괄적 네거티브 전환사례에 대한 분석을 바탕으로 규제혁신 방법으로서 입법방식 유연화가 지닌 한계를 지적한 후, 혁신의 장려와 혁신의 파괴성으로부터의 보호를 동시에 가능하게 하는 혁신친화적 신산업 규제혁신 원칙으로 유연한 규제를 제시한다. 유연한 규제는 규정의 구조, 집행의 구조, 규제피드백 등 규제거버넌스 전반에 걸쳐 규제목적을 달성하는 피규제자의 선택을 다양하게 만드는 것으로 정의될 수 있으며, 이 때 입법방식의 유연화는 유연한 규제 원칙을 달성하는 방법의 하나가, 네거티브 규제는 입법방식의 유연화를 달성하는 수단의 하나가 된다. 명령통제형 규제의 대안으로 제시되어온 규제이론들로부터 피규제자의 선택을 늘릴 수 있는 다양한 방법을 도출하여 유연한 규제의 분류체계를 구축한 후 정책적 함의와 후속 연구방향을 제시한다. The Moon Jae-in government has put forward regulatory reform of newly emerging technologies based on the comprehensively negative principle. This regulatory principle was achieved through the methods of flexible regulatory rulemaking and regulatory sandbox. However, unlike regulatory sandbox, which has been actively developing, the reform regarding flexible regulatory rulemaking displayed slow progress. The purpose of this article is to present flexible regulation as a new principle for regulatory reform of newly emerging technologies by defining its concept and rationale theoretically. Two tasks are tackled. First, the article analyzes regulatory reform cases in the fields of smart mobility, bio-health and fintech and points out limits of flexible regulatory rulemaking as a tool for making regulation flexible. Second, it defines flexible regulation as diversifying the choices of regulatees that achieve the regulatory objectives across regulatory governance, which comprises rule structure, enforcement structure and regulatory feedback. Here, the flexibility of regulatory rulemaking becomes a way of achieving flexible regulation, and the principle of comprehensively negative becomes one way to achieve flexible rule structure. Drawing on regulatory theories that have been presented as alternatives to command-and-control regulation, this article builds systematic ways to increase the choices of regulatees, establishes the system of classifying flexible regulation and presents policy implications and suggestions for future research.
Article
Full-text available
Scholars have consistently found that firms in developing countries adopt voluntary environmental programs (VEPs) in high numbers when their major trade partners are home to many VEP-certified firms. This reflects the following dynamic: Importers based in countries with many VEP-certified facilities demand similarly sustainable production processes from trade partners, and so exporting firms in partner countries adopt VEPs to signal their sustainable practices. Studies have identified characteristics of developing countries that make local exporting firms more likely to adopt VEPs as a signal; however, there has been little analysis as to the country-level characteristics that make importers more (or less) likely to demand VEPs from suppliers abroad, beyond having many VEP-certified firms themselves. This study considers this matter, theorizing that VEP diffusion only accompanies exporting to countries with high levels of income and education, as well as a high number of VEP-certified firms. Panel data analysis provides support for the theory, showing that developing countries only experience trade-based diffusion of ISO 14001 (a widely adopted VEP) through their exports to countries with high income and/or education levels. In contrast, exporting to countries that lack these characteristics creates no such diffusion, even where importing countries’ VEP certification levels are high. Instead, such trade produces a “stuck in the mud” effect, as developing countries’ certification levels stagnate even as those of their import partners rise.
Article
I consider the effect of global supply chain production – in contrast to directly owned overseas production – for labour rights in low- and middle-income countries. I develop a set of hypotheses regarding the conditions under which supply chain workers are most likely to experience improvements in their working conditions and procedural rights. In doing so, I highlight the importance of host country governments in the protection of labour rights: while private governance efforts have intensified in recent years, their success is conditional on local political actors’ interests in the protection of workers’ rights. Put differently, appropriate protections for labour require that the incentives of participating firms (foreign or domestic) and host country governments align. I also suggest how future research might best explore these dynamics, by focusing its attention at the firm and supply chain (rather than at the country) level.
Article
Many scholars and policymakers see transnational governance as a substitute for lackluster national and international policies, particularly in the context of intergovernmental gridlock or limited state capacity. The bulk of the literature explains sub- and non-state actors’ participation in transnational initiatives as a product of, on the one hand, micro-level incentives and, on the other, diffusion processes that create and spread normative and market-based pressures. We argue that such theoretical perspectives overlook the dynamic relationship between national policies and transnational governance. First, we argue that ambitious national policies positively affect sub- and non-state actors’ participation in transnational governance. Second, we posit that domestic institutions condition the effects of micro-level incentives and transnational pressures on participation in transnational governance. We test these claims in the climate regime, using an original dataset that, for the first time, measures cross-national participation in transnational climate initiatives across jurisdictions. The results support our expectations. They therefore suggest that we should understand national policies and transnational governance as complements, rather than competitors, to one another. Finally, by showing how and when national policies affect participation in transnational initiatives, we identify important scope conditions for their significance in addressing climate change.
Article
As middle-income countries have grown their manufacturing sectors considerably over recent decades, attention has turned to countries that fall at the bottom of the industrial ladder. In such countries, challenges related to corruption combined with intensely competitive pressures from China and other countries appear to preclude possibilities for state leaders and bureaucracies to engineer industrial growth. Drawing upon an original survey of 229 apparel shop owners in Kyrgyzstan and dozens of interviews, this article analyzes the creation of a regional Eurasian production network in a country where we would least expect to see manufacturing dynamism. I adopt an everyday international political economy approach to the study of production networks in this country – considered to have a challenging business environment with high corruption – focusing on the ways in which shop owners and other intermediaries understand and relate to state bureaucrats at different nodes of the network. Doing so expands our understanding of the varieties of pathways to contemporary export-oriented production, including ones that emerge at the margins of the law.
Article
Under what conditions does the global economy serve as a means for the diffusion of labor standards and practices? We anticipate variation among internationally engaged firms in their propensity to improve labor standards. Upgrading is most likely when a firm's products exhibit significant cross‐market differences in markups, making accessing high‐standards overseas markets particularly profitable. Additionally, upgrading is more likely when lead firms attach a high salience to labor standards. Therefore, while participation in global production induces “trading up” behaviors among firms overall, the effect strength varies across industries. We test our expectations via a survey experiment, which queries foreign firms operating in Vietnam about their willingness to invest in labor‐related upgrading. We find strong evidence for the effect of markups on upgrading choices and suggestive evidence for the saliency mechanism.
Chapter
Economic globalization has resulted in corporations, unaccountable to states, making key decisions within an otherwise anarchic world order, rendering normal democratic functioning almost impossible. Global gridlock has resulted from the same issues that plague democracies today. Although transnational civil society has tried to achieve a degree of democratic global governance, the result mostly has been to reinforce the global power structure.
Book
Cambridge Core - European Government, Politics and Policy - Private Governance and Public Authority - by Stefan Renckens
Thesis
En el mundo se producen, aproximadamente, 3 millones de toneladas de aceites de oliva. España, con una producción media cercana a 1.300.000 toneladas, es el país líder en producción. Dentro de España, Andalucía produce el 60% de la producción nacional y, en consecuencia, alrededor del 30% de la producción mundial. Las industrias vinculadas a la producción de aceites de oliva, industrias de primera transformación, son de dos tipos: cooperativas y no cooperativas -industriales. Del total de industrias, el 50% son de un tipo y el 50% de otro. No obstante, las cooperativas poseen una cuota de mercado del 70%. En el contexto descrito, con este trabajo se pretende contribuir, mediante el conocimiento generado, publicado y transferido, a la transformación sostenible de la industria agroalimentaria oleícola de Andalucía. Para ello, se plantea como objetivo general: conocer el comportamiento de las empresas productoras de aceites de oliva de Andalucía hacia la adopción de estándares de calidad, ambientales y de seguridad alimentaria, centrándonos, posteriormente, en el estándar ISO 14001 y las motivaciones de su adopción, dada su implicación en nuevas formas de producir eco-procesos y sostenibilidad de las empresas. Además, como el objetivo de toda organización es la consecución de la comercialización de sus productos y un mayor rendimiento comercial, se va a analizar la relación de este estándar con el rendimiento comercial, económico y financiero de las empresas productoras de aceites de oliva. Como objetivos específicos, se pretende alcanzar los siguientes: • Analizar las percepciones que directores, empleados y responsables de calidad de las industrias oleícolas de Andalucía tienen sobre el concepto de sostenibilidad (Objetivo 1). • Identificar las principales motivaciones, barreras y beneficios para la adopción de la ISO 14001, señalados por los directores, empleados y responsables de calidad de las industrias oleícolas de Andalucía (Objetivo 2). • Analizar la influencia de la adopción de la norma ISO 14001 en el rendimiento económico y comercial de las empresas productoras de aceites de oliva en Andalucía y su implicación en los beneficios organizacionales. Se propone verificar si la decisión de implementar la norma conduce a mayores ventas, tanto nacionales como internacionales, así como a un mejor resultado económico (Objetivo 3).
Article
Building state capacity has often been hailed as a cure-all for the ailments of the developing world and has been linked to human rights improvements, economic development, and the enforcement of property rights. Low state capacity, on the other hand, has been viewed as one of the primary impediments to improvements of labor rights and other social justice issues. We examine the relationship between state capacity and the protection of labor rights in panels of 85 developing countries, and 34 "supply-chain-relevant" countries. We find that changes in state capacity are only associated with changes in labor rights in countries where workers' interests are better represented in the political system - measured alternately as left party power, democracy, union density, and potential labor power. Our findings highlight the importance of combinations of state capacity and political will in leading to improved rights of workers in global supply chains.
Article
Full-text available
This paper explores the role of the state for an effective engagement of multinational corporations (MNCs) in corporate social responsibility (CSR).1 In the OECD context, the "shadow of hierarchy" cast by the state is considered an important incentive for MNCs to engage in CSR activities that contribute to governance. However, in areas of limited statehood, where state actors are too weak to effectively set and enforce collectively binding rules, profit-driven MNCs confront various dilemmas with respect to costly CSR standards. The lack of a credible regulatory threat by state agencies is therefore often associated with the exploitation of resources and people by MNCs, rather than with business' social conduct. However, in this paper we argue that there are alternatives to the "shadow of hierarchy" that induce MNCs to adopt and implement CSR policies that contribute to governance in areas of limited statehood. We then discuss that in certain areas such functional equivalents still depend on some state intervention to be effective, in particular when firms are immune to reputational concerns and in complex-task areas that require the involvement of several actors in the provision of collective goods. Finally, we discuss the "dark side" of the state and show that the state can also have negative effects on the CSR engagement of MNCs. We illustrate the different ways in which statehood and the absence thereof affect CSR activities of MNCs in South Africa and conclude with some considerations on the conditions under which statehood exerts these effects.
Article
Full-text available
As the world economy becomes increasingly integrated, companies can shift production to wherever wages are lowest and unions weakest. How can workers defend their rights in an era of mobile capital? With national governments forced to compete for foreign investment by rolling back legal protections for workers, fair trade advocates are enlisting consumers to put market pressure on companies to treat their workers fairly. In Beyond the Boycott, sociologist Gay Seidman asks whether this non-governmental approach can reverse the "race to the bottom" in global labor standards. Beyond the Boycott examines three campaigns in which activists successfully used the threat of a consumer boycott to pressure companies to accept voluntary codes of conduct and independent monitoring of work sites. The voluntary Sullivan Code required American corporations operating in apartheid-era South Africa to improve treatment of their workers; in India, the Rugmark inspection team provides 'social labels' for handknotted carpets made without child labor; and in Guatemala, COVERCO monitors conditions in factories producing clothing under contract for major American brands. Seidman compares these cases to explore the ingredients of successful campaigns, as well as the inherent limitations facing voluntary monitoring schemes. Despite activists' emphasis on educating individual consumers to support ethical companies, Seidman finds that, in practice, they have been most successful when they mobilized institutions-such as universities, churches, and shareholder organizations. Moreover, although activists tend to dismiss states' capabilities, all three cases involved governmental threats of trade sanctions against companies and countries with poor labor records. Finally, Seidman points to an intractable difficulty of independent workplace monitoring: since consumers rarely distinguish between monitoring schemes and labels, companies can hand pick monitoring organizations, selecting those with the lowest standards for working conditions and the least aggressive inspections. Transnational consumer movements can increase the bargaining power of the global workforce, Seidman argues, but they cannot replace national governments or local campaigns to expand the meaning of citizenship. As trade and capital move across borders in growing volume and with greater speed, civil society and human rights movements are also becoming more global. Highly original and thought-provoking, Beyond the Boycott vividly depicts the contemporary movement to humanize globalization-its present and its possible future. Copyright © 2007 by the American Sociological Association. All rights reserved.
Article
Full-text available
What is the relationship between domestic and international politics in a world of economic interdependence? This article discusses and organizes an emerging body of scholarship, which the authors label the new interdependence approach, addressing how transnational interactions shape domestic institutions and global politics in a world of economic interdependence. This literature makes three important contributions. First, it examines how domestic institutions affect the ability of political actors to construct the rules and norms governing interdependent relations and thus present a source of asymmetric power. Second, it explores how interdependence alters domestic political institutions through processes of diffusion, transgovernmental coordination, and extraterritorial application and in turn how it changes the national institutions mediating internal debates on globalization. Third, it studies the shifting boundaries of political contestation through which substate actors affect decision making in foreign jurisdictions. Given the importance of institutional change to the new interdependence agenda, the authors suggest several instances where historical institutionalist tools might be exploited to address these transnational dynamics, in particular, mechanisms of cross-national sequencing and change strategies of substate actors. As globalization continues, it will be ever more difficult to examine national trajectories of institutional change in isolation from each other. Equally, it will be difficult to understand international institutions without paying attention to the ways in which they both transform and are transformed by domestic institutional politics. While the new interdependence approach does not yet cohere as a single voice, the authors believe that it offers an innovative agenda that holds tremendous promise for both comparative and international relations research as it calls on scholars to reconsider the dynamic nature of globalization for global politics.Henry Farrell is an associate professor of political science and international affairs at George Washington University. He is currently working on the application of evolutionary theory to institutional change. He can be reached at henry.farrell@gmail.com. Abraham L. Newman is an associate professor at the BMW center for German and European Studies in the Edmund A. Walsh School of Foreign Service at Georgetown University. His research focuses on the international politics of regulation and he is the author of Protectors of Privacy: Regulating Personal Data in the Global Economy (2008) and the coeditor, with John Zysman, of How Revolutionary Was the Digital Revolution (2006). He can be reached at aln24@georgetown.edu; and for more information, see http://explore.georgetown.edu/people/aln24/.
Article
Full-text available
This paper investigates how corruption in the institutional environment influences firms' decisions to obtain third-party certification to private management standards as signals of desirable conduct. We argue that policy-specific corruption erodes trust in government efforts to regulate firms' conduct, thus increasing the signaling value of private certifications and the likelihood of certification. However, widespread corruption in the general environment can extend distrust to private certification systems, which reduces the credibility and signaling value of private certifications, thus decreasing the likelihood that firms obtain certification. Our empirical results based on ISO 14001 environmental management system certification among 433 automotive plants in Mexico confirm these relationships. We discuss the implications of our findings for transaction cost economics, institutional theory, research, and practice.
Article
Full-text available
Voluntary codes of best practice have become increasingly prominent in corporate governance regulation. Given their similarity in focus and substance, the global spread of private self-regulation in corporate governance is often attributed to the rise of institutional investors and seen as signalling a global convergence of stan- dards among the traditionally divergent national corporate governance systems. Drawing on institutionalist approaches of Comparative Political Economy, we argue that national code developments are strongly shaped by national state– economy relationships, in particular by domestic ‘key coalitions’. Comparing the emergence of corporate governance codes in the UK and Germany, our study reveals marked differences with respect to the formulation, substance and function of codes in national corporate governance. In the UK, the code largely reflects the demands of institutional investors for stricter standards. In contrast, members of the traditional German ‘stakeholder coalition’ pushed for a code that was intended to be more a Marketing than regulatory Instrument.
Article
Full-text available
As each others' most important investment and trading partner, the European and U.S. American economies are closely interlinked. The growing intensity of economic interdependence has spurred the transatlantic coordination of rules and standards that could form non-tariff barriers to transatlantic commerce. But despite impressive government-to-government efforts to eliminate market barriers, the EU and the U.S. have frequently clashed over each other's regulatory policies. The aim of this special issue is to explore the domestic sources of cooperation or conflict in transatlantic regulation. The papers analyze the role of domestic factors through three theoretical lenses that are well-established in the study of multilevel systems: the principal-agent approach, the two-level game metaphor, and through a wider concept of institutionalism which emphasizes the interlinkages of societal interests and regulatory ideas with institutional frameworks. The papers reveal that domestic factors embody more obstacles to than opportunities for horizontal coordination. It is argued that transatlantic relations will likely undergo a ‘double movement’ of being simultaneously shifted upwards to become part of the global governance architecture, and downwards towards broader involvement of legislators in regulatory matters. Hence, transatlantic regulation might in the near future be more shaped by political leaders, rent-seeking interest groups and legislators than by networks of technocrats.
Article
Full-text available
As dramatically evidenced by the global financial crisis, the interaction of domestic regulatory systems has significant international consequences. Nevertheless, these relationships have received only limited attention from international relations scholars. This special issue, therefore, provides a detailed examination of international market regulation – the processes through which the domestic regulatory activities of states and other actors set the effective rules of internationally-exposed markets. To this end, we borrow and extend on arguments developed by historical institutionalists in comparative politics and American political development. In particular, the contributions adapt two mechanisms – policy feedbacks and relative sequencing – to explain state and bureaucratic preferences over international market regulation as well as bargaining strength in relevant negotiations. In addition to contributing to central IPE debates about international economic governance, the individual contributions shed light on a number of important empirical domains such as corporate accounting, intellectual property, pharmaceuticals, hedge funds, and financial market standardization.
Article
Full-text available
This article explores the impact of economic globalization on workers' rights in developing countries. The authors hypothesize that the impact of globalization on labor rights depends not only on the overall level of economic openness but also on the precise ways in which a country participates in global production networks. Using a new data set on collective labor rights, the authors test these expectations. Their analysis of the correlates of labor rights in 90 developing nations, from 1986 to 2002, highlights globalization's mixed impact on labor rights. As “climb to the top” accounts suggest, foreign direct investment inflows are positively and significantly related to the rights of workers. But at the same time, trade competition generates downward “race to the bottom” pressures on collective labor rights. The authors also find that domestic institutions and labor rights in neighboring countries are important correlates of workers' rights.
Article
Full-text available
Standards have become one of the most important nontariff barriers to trade, especially national product standards that specify design or performance characteristics of manufactured goods. Divergent national standards often inhibit trade, whereas regional and international standards increasingly serve as instruments of trade liberalization. Consequently, the setting of international standards—seemingly technical and apolitical—is rapidly becoming an issue of economic and political salience. But who sets international standards? Who wins, who loses? This article offers a fresh analytical approach to the study of international standards, which the authors call the institutional complementarities approach. It builds on insights from realism and the “Battle of the Sexes” coordination game but emphasizes complementarities of historically conditioned standardization systems at the national level with the institutional structure of standardization at the international level. It posits that, after controlling for other factors that influence involvement in international standardization, differences in institutional complementarities play a critical though largely accidental role in placing firms from different countries or regions in a first- or second-mover position when standardization becomes global. The authors illustrate the insightfulness of this approach through statistical analyses of the first scientific set of data on standards use and standardization, collected by the authors through an international online survey.
Article
Full-text available
This article investigates the nature of the linkages between trade and labor rights in developing countries. Specifically, we hypothesize that a “California effect” serves to transmit superior labor standards from importing to exporting countries, in a manner similar to the transmission of environmental standards. We maintain that, all else being equal, the labor standards of a given country are influenced not by its overall level of trade openness, but by the labor standards of its trading partners. We evaluate our hypothesis using a panel of 90 developing countries over the period 1986–2002, and we separately examine the extent to which the labor laws and the actual labor practices of the countries are influenced by those of their export destinations. We find that strong legal protections of collective labor rights in a country's export destinations are associated with more stringent labor laws in the exporting country. This California effect finding is, however, weaker in the context of labor rights practices, highlighting the importance of distinguishing between formal legislation and actual implementation of labor rights.
Article
Full-text available
Thousands of facilities worldwide have certified to ISO 14001, the international environmental management system standard, and previous research typically has studied these certification decisions at the facility level. However, significant anecdotal evidence indicates that firms may have a strong role, and if so, prior studies may be drawing inappropriate conclusions about the rationale for ISO 14001 certification. Drawing on institutional theory and the resource-based view of the firm, this study offers a conceptual framework that explains why parent companies would mandate — rather than simply encourage — their operational units to certify to ISO 14001. The framework is tested using survey data of corporate environmental managers. The results show that firms have a central role in nearly half of all facility-level certifications and that (compared to companies that merely encourage certification) firms that mandate ISO 14001 endure greater external pressures and have stronger complementary resources and capabilities that support their organization-wide ISO 14001 policies.
Article
Full-text available
Voluntary environmental programs (VEPs) have been used as a policy tool in the United States since the early 1990s and come in many forms. Early assessments of VEPs targeting changes in production processes showed that industrial participants improved their environmental performance and VEPs were celebrated as a viable alternative to more traditional regulation. Recent analyses using more sophisticated techniques, however, paint a less favorable picture. On the one hand, firms appear willing to sign up to VEPs, and in some cases, participants may be able to create a shield against future losses in shareholder value. On the other hand, these VEPs targeting production processes appear not to generate significant pollution abatement. The latter finding is particularly disturbing and this article discusses various explanations, including institutional failure and participant motivations. Future research needs to focus on understanding the firm motivation to invest in production-related pollution abatement under a VEP. For policymakers, the research offers a warning on the limited impact to date of VEPs targeting production processes. However, the multitude of other VEPs, such as those which target new product development and changing market demands, merit a closer look to determine the overall potential of VEPs to engender positive environmental change.
Article
Full-text available
This article analyzes the factors that explain the international diffusion of voluntary international management standards. We argue that international management standards should not be analyzed in isolation but in conjunction with other standards and their institutional environment. We present two opposite views explaining how the previous diffusion of management standards facilitates or hampers the adoption of new management standards. We test a comprehensive model of diffusion of international environmental management standards within the chemical industry using a panel of 113 different countries during the period 2000 to 2003. Our results show that the previous experience of businesses in voluntary standards such as the Chemical Industry's Responsible Care Program or ISO 9000, government commitment toward Environmental Management Systems Standards, and the level of activity of international nongovernmental organizations in the country of adoption, impact positively on the adoption of ISO 14001 by chemical firms. Unlike previous studies that focused mostly on cross industry analyses, we do not find trade-related factors significant while explaining adoption in the chemical industry. Our results differ, therefore, from previous research and highlight the need to isolate industry effects to understand the diffusion of international standards.
Article
Full-text available
abstract While smaller firms are less likely to undertake as many environmental practices as larger firms, extant literature suggests that smaller firms may be more responsive to stakeholder pressures. This paper contributes to the development of stakeholder theory by deriving a size moderated stakeholder model and applying it to a firm's adoption of proactive environmental practices. The empirical results show that smaller firms are more responsive to value-chain, internal, and regulatory stakeholder pressures. These findings suggest that researchers evaluating organizations and the natural environment should be cautious about associating stakeholder pressures directly with firms' environmental strategies. Rather, the relationship between stakeholder pressures and environmental strategy tends to vary with size.
Article
Full-text available
This research explores why some facilities accrue greater costs when adopting an environmental management system (EMS) and why costs vary among three different ownership structures. Using survey data of organizations that documented their EMS adoption costs over a 3-year period, the results show that publicly traded facilities had stronger complementary capabilities prior to EMS adoption and therefore lower adoption costs. By contrast, government facilities and privately owned enterprises had fewer capabilities and accrued higher EMS adoption costs. The development of organizational capabilities and resources therefore appears to be a function of both organizational exploitation of imperfect or incomplete market factors, and the institutional context of these decisions. Copyright © 2006 John Wiley & Sons, Ltd.
Article
Full-text available
This article combines new and old institutionalism to explain differences in organizational strategies. We propose that differences in the influence of corporate departments lead their facilities to prioritize different external pressures and thus adopt different management practices. Specifically, we argue that external constituents—including customers, regulators, legislators, local communities, and environmental activist organizations—who interact with influential corporate departments are more likely to affect facility managers' decisions. As a result, managers of facilities that are subjected to comparable institutional pressures adopt distinct sets of management practices that appease different external constituents. We test our framework in the context of the adoption of environmental management practices using an original survey and archival data obtained for nearly 500 facilities. We find support for these hypotheses. Copyright © 2008 John Wiley & Sons, Ltd.
Article
Full-text available
This study analyzes the initial implementation of the Sustainable Slopes Program a voluntary environmental initiative established by the U.S. National Ski Areas Association in partnership with federal and state government agencies. Our findings indicate that participation of western ski areas in the Sustainable Slopes Program is related to institutional pressures in the form of enhanced federal oversight and higher state environmental demands exerted by state agencies, local environmental groups and public opinion. The analysis also suggests that, despite these institutional pressures, participant ski areas appear to be correlated with lower third-party environmental performance ratings. This behavior seems to reflect the lack of specific institutional mechanisms to prevent opportunism in the current design of the Sustainable Slopes Program. That is, the program does not involve specific environmental standards, lacks third-party oversight, and does not have sanctions for poor performance.
Article
The fast evolution of management systems standards ISO 9000 and ISO 14000 worldwide, from unknown entities to well-established management practices, represents a facet of the global marketplace in which many firms operate. Over 400,000 firms in over 150 countries have adopted ISO 9000 since it was introduced in 1986. Its successor, ISO 14000, was introduced in 1996 and has already been adopted by over 30,000 firms in over 100 countries. Reports on the results of an ISO 9000114000 mail survey, administered in four Far eastern countries including Japan, South Korea, Hong Kong and Taiwan to explore and compare the similarities and differences of motivations, implementations and certification benefits among these countries. Survey data have been analyzed using the multivariate statistical methods and techniques such as factor analysis, cluster analysis, Kruskal-Wallis test, etc. Several conclusions and suggestions are made based on the statistical analysis results.
Book
Adopting new and much more comprehensive concepts of both power and politics, the author develops a theoretical framework to show who really governs the world economy. He goes on to explore some of the non-state authorities, from mafias to the 'Big Six' accounting firms and international bureaucrats, whose power over who gets what in the world encroaches on that of national governments. The book is a signpost, pointing to some promising new directions for the future development of research and teaching in international political economy.
Article
Labor Rights and Multinational Production investigates the relationship between workers’ rights and multinational production. Mosley argues that some types of multinational production, embodied in directly owned foreign investment, positively affect labor rights. But other types of international production, particularly subcontracting, can engender competitive races to the bottom in labor rights. To test these claims, Mosley presents newly generated measures of collective labor rights, covering a wide range of low- and middle-income nations for the 1985–2002 period. This book suggests that the consequences of economic openness for developing countries are highly dependent on foreign firms’ modes of entry and, more generally, on the precise way in which each developing country engages the global economy. The book contributes to academic literature in comparative and international political economy, and to public policy debates regarding the effects of globalization.
Article
Over the past two decades, governments have delegated extensive regulatory authority to international private-sector organizations. This internationalization and privatization of rule making has been motivated not only by the economic benefits of common rules for global markets, but also by the realization that government regulators often lack the expertise and resources to deal with increasingly complex and urgent regulatory tasks.The New Global Rulersexamines who writes the rules in international private organizations, as well as who wins, who loses--and why.Tim B the and Walter Mattli examine three powerful global private regulators: the International Accounting Standards Board, which develops financial reporting rules used by corporations in more than a hundred countries; and the International Organization for Standardization and the International Electrotechnical Commission, which account for 85 percent of all international product standards. B the and Mattli offer both a new framework for understanding global private regulation and detailed empirical analyses of such regulation based on multi-country, multi-industry business surveys. They find that global rule making by technical experts is highly political, and that even though rule making has shifted to the international level, domestic institutions remain crucial. Influence in this form of global private governance is not a function of the economic power of states, but of the ability of domestic standard-setters to provide timely information and speak with a single voice. B the and Mattli show how domestic institutions' abilities differ, particularly between the two main standardization players, the United States and Europe.
Article
This introduction to the special issue combines a review of the existing literature about the causes and consequences of private regulation in the global economy with a preview of the articles in this issue. To organize this (p)review, I introduce a conceptual model "beyond supply and demand," which distinguishes three major subsets of stakeholders of global private regulation, which may (but need not) overlap: the political actors who call for private regulation, the rule-makers who provide such governance for the global economy, and what I call the "targets" of the private regulations, who are supposed to behave according to these private rules. I then highlight the three core questions addressed by the contributions to the special issue: (1) How do private bodies attain regulatory authority; why do private regulators provide governance; and why do the targets of the rules comply? (2) Who governs the global economy through private regulations? And (3) what are the effects of private regulation, and how does the rise of private regulation affect public regulatory authority and capacity?
Article
Governance without government identifies the possibilities for social order without government institutions, bureaucracies, and representative leaders that forcefully mandate acceptable behavior within society. Governance without government does not identify a post-political society where the need to talk and discuss arising social problems does not occur, but rather a post-government society where the mechanisms for social order are embedded throughout society, in the means of production, processes of gifting and exchange, educational systems, and communications apparatus’. Government, if it can still be labeled as such, is stripped of all authority and power, becoming a table for social discussion, rather than a building, an actor separate from society, dictating the present and future of society.
Article
The implementation of transnational standards — in codes of conduct, certification, and monitoring initiatives — necessarily intertwines with domestic law and other types of rules. Yet much of the existing literature overlooks or obscures this fundamental point. Indeed, scholars often err either by treating private regulatory standards as transcendent or by viewing implementation as fundamentally a technical problem. This Article argues that understanding the operation of transnational private regulation requires attention to the layering of multiple rules (and the politics surrounding them) in a given location. It develops a framework for examining this layering and illustrates it by briefly looking at two major issues — community rights in sustainable forestry standards and freedom of association in fair labor standards — and their implementation in Indonesia. In various ways, these domains illustrate how conflict and complementarity between public and private standards structure the practice of private regulation.
Article
This article examines how the quality of domestic regulatory institutions shapes the role of global economic networks in the cross-national diffusion of private or voluntary programs embodying environmental norms and practices. We focus on ISO (International Organization for Standardization) 14001, the most widely adopted voluntary environmental program in the world, which encourages participating firms to adopt environmental stewardship policies beyond the requirement of extant laws. We hypothesize that firms are motivated to signal environmental stewardship via ISO 14001 certification to foreign customers and investors that have embraced this voluntary program, but only when these firms operate in countries with poor regulatory governance. Using a panel of 129 countries from 1997 to 2009, we find that bilateral export and bilateral investment pressures motivate firms to join ISO 14001 only when firms are located in countries with poor regulatory governance, as reflected in corruption levels. Thus, our article highlights how voluntary programs or private law operates in the shadow of public regulation, because the quality of public regulation shapes firms' incentives to join such programs.
Article
Norms shape policy when they get translated into concrete programs. What if a widely shared norm gets translated into a weak program? How might this influence the program's legitimacy? We examine these issues in the context of the United Nations Global Compact, a voluntary program that embodies the widely shared norm of corporate responsibility. While both international intergovernmental organization (IGO) and international non-governmental organization (INGO) networks support this norm, they differ on the adequacy of the Compact's program design. We explore how this tension affects the diffusion of the Compact across countries, which vary in their levels of embeddedness in IGO and INGO networks. Our findings suggest that embeddedness in IGO networks encourages adoption, while embeddedness in INGO networks discourages it. Our analysis provides important lessons for sponsors of voluntary governance mechanisms. Widespread support for a norm does not automatically ensure support for a program that claims to embody it.
Article
We use panel data on ISO 9000 quality certification in 85 countries between 1993 and 1998 to better understand the cross-national diffusion of an organizational practice. Following neoinstitutional theory, we focus on the coercive, normative, and mimetic effects that result from the exposure of firms in a given country to a powerful source of critical resources, a common pool of relevant technical knowledge, and the experiences of firms located in other countries. We use social network theory to develop a systematic conceptual understanding of how firms located in different countries influence each other's rates of adoption as a result of cohesive and equivalent network relationships. Regression results provide support for our predictions that states and foreign multinationals are the key actors responsible for coercive isomorphism, cohesive trade relationships between countries generate coercive and normative effects, and role-equivalent trade relationships result in learning-based and competitive imitation.
Article
This paper examines the environmental effects of foreign direct investment (FDI) from less-developed countries (LDC). We hypothesize that rather than transferring poor home-country practices across borders, LOG FDI can increase the level of environmental stewardship of host-country firms. We contend that LDC firms find it increasing financially advantageous to signal to consumers, investors, and potential business partners their commitment to environmental protection by adopting sound environmental practices. Furthermore, this behavior can create spillover effects to other host-country firms, leading these firms to also boost their environmental credentials. Our empirical findings lend support to these conjectures.
Article
This paper relates quality and uncertainty. The existence of goods of many grades poses interesting and important problems for the theory of markets. On the one hand, the interaction of quality differences and uncertainty may explain important institutions of the labor market. On the other hand, this paper presents a struggling attempt to give structure to the statement: “Business in under-developed countries is difficult”; in particular, a structure is given for determining the economic costs of dishonesty. Additional applications of the theory include comments on the structure of money markets, on the notion of “insurability,” on the liquidity of durables, and on brand-name goods.
Article
Examines the role that institutions, defined as the humanly devised constraints that shape human interaction, play in economic performance and how those institutions change and how a model of dynamic institutions explains the differential performance of economies through time. Institutions are separate from organizations, which are assemblages of people directed to strategically operating within institutional constraints. Institutions affect the economy by influencing, together with technology, transaction and production costs. They do this by reducing uncertainty in human interaction, albeit not always efficiently. Entrepreneurs accomplish incremental changes in institutions by perceiving opportunities to do better through altering the institutional framework of political and economic organizations. Importantly, the ability to perceive these opportunities depends on both the completeness of information and the mental constructs used to process that information. Thus, institutions and entrepreneurs stand in a symbiotic relationship where each gives feedback to the other. Neoclassical economics suggests that inefficient institutions ought to be rapidly replaced. This symbiotic relationship helps explain why this theoretical consequence is often not observed: while this relationship allows growth, it also allows inefficient institutions to persist. The author identifies changes in relative prices and prevailing ideas as the source of institutional alterations. Transaction costs, however, may keep relative price changes from being fully exploited. Transaction costs are influenced by institutions and institutional development is accordingly path-dependent. (CAR)
Article
Increasing attention to environmental management has raised many new dilemmas for firms. How can managers deal with environmental issues in a competitive situation that is international and heterogeneous? What are the strategic and financial implications of environmental management? How can they cope with regulation, considering the choices which range from compliance to voluntary initiatives? And how do other firms organise their environmental management and communicate with stakeholders? This book examines these different topics, without dogma or prescription. It demonstrates the complexity of an area in which there are often no right or easy answers. The Economics of Environmental Management: 7 shows the links between the main functional areas of a business and environmental management; 7 examines regulation and self-regulation in different countries and worldwide; 7 pays specific attention to multinational enterprises; 7 gives an international state of the art on environmental management systems and standards (especially ISO 14001 and EMAS); on environmental reporting and verification; and on environmental management accounting; 7 contains international case examples and a wealth of annotated references to paper and electronic sources.
Article
Proponents of iso 9000 certification claim that it is a low-cost signal of a firm's commitment to quality and a meaningful component of total quality management (TQM). Critics claim that it has little relation to TQM and is a tariff on international trade. We test the hypothesis that firms obtain ISO 9000 certification to comply with government and customer demands by estimating a probit model of the certification decision. The results support the view of proponents of ISO 9000. After controlling for regulatory and customer pressures to obtain ISO 9000, other factors related to quality management and quality-based competition explain the adoption decision.
Article
The ISO 9000 series of quality management systems standards and the more recent ISO 14000 environmental management systems standards have generated much controversy among practitioners. Although ISO 9000 has become a de facto requirement for many firms, its effects are poorly understood, and similarly the value and domain of applicability of ISO 14000 have been questioned. This paper reports on an exploratory study into the global spread of ISO 14000. We interviewed practitioners worldwide to identify factors that they believe explain differences between national ISO 14000 certification counts. We then collected quantititive data for these factors and, using regression analysis, we found that exports, environmental attitudes (combined with economic development), and ISO 9000 certification count were significant. The fact that ISO 9000 appears as an important factor explaining diffusion of ISO 14000 certifications suggests that the drivers behind the two have significant overlap. This indicates that, although ISO 14000 is an environmental standard, many of the factors driving national certification patterns are not at all environmental in nature, and that ISO 14000 therefore needs to be studied from a broader perspective than from a purely environmental point of view.
Article
Quality management (QM) and environmental management (EM) are two business practices that may affect firm performance. These practices are being increasingly introduced into firms, which often use them jointly owing to their similarities. As a result of these similarities, their integration has become a popular topic of research and practice. In the field of integration, the highest level of integration may be achieved by means of a single, full QM–EM system (QEM) in which QM and EM lose their independence. It is therefore desirable to identify dimensions from which to assess these management practices and their effects on performance. The aim of this paper is to carry out a literature review in order to propose and analyse dimensions for QM, EM, QEM and firm performance, as well as models of cause–effect relationships between these variables. The topics reviewed are the following: (1) the QM and EM dimensions; (2) the empirical studies about QM–performance and EM–performance links; and (3) issues of integration. The review suggests that the large body of QM research may inform EM and QEM. This is so because research on the QM side is more advanced and developed than that on the EM side.
Article
The corporate approach to environmental protection has been evolving from a regulation-driven reactive mode to a more proactive approach involving voluntarily adopted management systems that integrate environmental concerns with traditional managerial functions. Several hypotheses about the factors explaining the diversity in the environmental management systems adopted by firms are tested using survey data for a sample of S&P 500 firms. The analysis shows that the threat of environmental liabilities, high costs of compliance, market pressures, and public pressures on firms with high on-site toxic emissions per unit output create incentives for adopting a more comprehensive environmental management system.
Article
Competition to attract foreign direct investment (FDI) creates opportunities for multinational enterprises (MNEs) to diffuse corporate management practices from their countries-of-origin (home countries) to countries hosting their foreign operations. We examine conditions under which MNEs transfer corporate environmental practices from home countries to host countries. Our focus is on ISO 14001, the most widely adopted voluntary environmental program in the world. We examine inward FDI stocks and ISO 14001 adoption levels for a panel of 98 countries, and a subset of 74 developing countries, for the period 1996–2002. We find support for the country-of-origin argument in that inward FDI stocks are associated with higher levels of ISO 14001 adoption in host countries only when FDI originates from home countries that themselves have high levels of ISO 14001 adoption. Countries’ ISO adoption levels are associated not with how much FDI host countries receive overall but from whom they receive it. Three implications emerge from this study: (1) FDI can become an instrument to perpetuate divergence in corporate practices across the world; (2) economic integration via FDI can create incentives for firms to ratchet up their environmental practices beyond the legal requirements of their host countries; (3) instead of racing down to match the less stringent corporate practices prevalent in developing countries, developed countries can employ FDI outflows to ratchet up corporate practices abroad given that developing countries are net recipients of developed countries’ FDI outflows.
Article
In this article we explore how much state is necessary to make governance work. We begin by clarifying concepts of governance and the “shadow of hierarchy” and we follow this clarification with a brief overview of empirical findings on governance research in developed countries. We then discuss the dilemmas for governance in areas of limited statehood, where political institutions are too weak to hierarchically adopt and enforce collectively binding rules. While prospects for effective policymaking appear to be rather bleak in these areas, we argue that governance research has consistently overlooked the existence of functional equivalents to the shadow of hierarchy. We assert that governance with(out) government can work even in the absence of a strong shadow of hierarchy, we identify functional equivalents to the shadow of hierarchy, and we discuss to what extent they can help overcome issues of legitimacy and effectiveness in areas of limited statehood.
Article
Although industry self-regulation has developed into a preferred regulatory strategy for the digital economy, self-regulatory solutions adopted in the U.S. and the European Union differ considerably. We argue that variation in the shadow of public power—the public sector tools employed to induce industry collective action—sets the two on distinct self-regulatory trajectories. Legalistic self-regulation dominates in the U.S. and coordinated self-regulation in Europe. Expectations derived from the model are evaluated in case studies of online content regulation and personal data privacy protection.
Book
Can businesses voluntarily adopt progressive environmental policies? Most environmental regulations are based on the assumption that the pursuit of profit leads firms to pollute the environment, and therefore governments must impose mandatory regulations. However, new instruments such as voluntary programs are increasingly important. Drawing on the economic theory of club goods, this book offers a theoretical account of voluntary environmental programs by identifying the institutional features that influence conditions under which programs can be effective. By linking program efficacy to club design, it focuses attention on collective action challenges faced by green clubs. Several analytic techniques are used to investigate the adoption and efficacy of ISO 14001, the most widely recognized voluntary environmental program in the world. These analyses show that, while the value of ISO 14001's brand reputation varies across policy and economic contexts, on average ISO 14001 members pollute less and comply better with governmental regulations.