Disaggregating public-private governance interactions: European Union interventions in transnational private sustainability governance

Transnational private sustainability governance, such as eco-certification, does not operate in a regulatory or jurisdictional vacuum. A public authority may intervene in private governance for various reasons, including to improve private governance's efficient functioning or to assert public regulatory primacy. This article argues that to properly understand the nature of public-private governance interactions—whether more competitive or complementary—we need to disaggregate a public authority's intervention. The article distinguishes between four features of private governance in which a public authority can intervene: standard setting, procedural aspects, supply chain signaling, and compliance incentives. Using the cases of the European Union's policies on organic agriculture and biofuels production, the article shows that public-private governance interaction dynamics vary across these private governance features as well as over time. Furthermore, the analysis highlights the importance of active lobbying by private governance actors in influencing these dynamics and the resulting policy outputs.     

Transparency in transnational governance: The determinants of information disclosure of voluntary sustainability programs

The rise of “new” transnational governance has intensified debates about a lack of accountability in global politics. Reviewing the mechanisms through which transparency can foster accountability beyond the state, this article explores the determinants of information disclosure in the field of transnational sustainability governance. Examining the institutional design of 113 voluntary sustainability programs, we find a positive correlation between the involvement of public actors and information disclosure. In contrast, the role of civil society is more ambiguous. There is no statistical support for arguments linking non‐governmental organization participation to increased transparency. At the same time, our analysis reveals a robust correlation between civil society‐led metagovernance and information disclosure. Moreover, we find that crowding has a negative effect on transparency, whereas normative peer pressures have no influence. At a broader level, the analysis reveals a lack of “deep transparency” among transnational sustainability governors. This limits the scope for transparency‐induced accountability in this policy domain.     

Issue opacity and sustainability standard effectiveness

Many voluntary sustainability standards govern opaque environmental and social issues, which are difficult to understand and address. Extant studies show mixed evidence around the effectiveness of such standards. We develop a theoretical framework that relates different degrees and types of opacity to standard effectiveness. Systemic opacity results from issues embedded in complex, diverse, and dynamic settings, whereas behavioral opacity stems from human challenges in interpreting and acting upon focal issues. Rigid sustainability standards, oriented toward compliance, are effective for addressing issues that are transparent or enshrouded by behavioral opacity, but are counterproductive for issues with systemic opacity. The trade-off between rigidity and flexibility leads to optimal effectiveness when standards governing systemically and behaviorally opaque issues are moderately rigid. Our ideas are illustrated with two leading sustainability standards in the fisheries and real estate sectors, which effectively address transparent issues but show limited success when facing opacity. We conclude that unpacking issue opacity is instrumental in designing and implementing more effective sustainability standards.     

When private governance impedes multilateralism: The case of international pesticide governance

Private standards play an increasingly important governance role, yet their effects on state-led policymaking remain understudied. We examine how the operation of private agricultural standards influences multilateral pesticide governance with a particular focus on the listing of substances under the Rotterdam Convention on the Prior Informed Consent Procedure for Certain Hazardous Chemicals and Pesticides in International Trade, a treaty-based information-sharing mechanism that allows countries to refuse hazardous chemical imports. We find that private agricultural standard-setting bodies use the Rotterdam Convention's pesticide list to develop their own lists of banned substances. This alters the Rotterdam Convention's intended role, impeding efforts to add substances to the treaty, as attempts by private actors to impose stricter governance than state actors can undermine the potential for international state-based governance to become more stringent. We characterize this as a “confounding interaction” whereby institutional linkages between actions by public and private actors with broadly aligned goals results in unexpected negative consequences for governance.     

Assessing the institutionalization of private sustainability governance in a changing coffee sector

The potential of transnational private governance initiatives to constitute effective alternatives to state‐led regulation of global value chains rests on their ability to scale up and become institutionalized in a given sector. This study examines whether such institutionalization has occurred in the coffee sector, the commodity with the most widespread adoption of certified products and over 30 years’ experience of private governance, and tests hypotheses on facilitating and inhibiting conditions. It finds that while norm generation around responsible supply chain management and the organizational institutionalization of standard‐setting bodies is well advanced, the practice of internalizing social and environmental externalities through the routinized production and purchase of higher priced certified goods continues to be questioned by industry actors. Indeed, conditions that favored normative and organizational institutionalization, such as high levels of industry concentration, product differentiation, and deliberative interaction, are shown to represent barriers to the practice‐oriented institutionalization of market‐driven regulatory governance.     

Mainstreamed voluntary sustainability standards and their effectiveness: Evidence from the Honduran coffee sector

Voluntary Sustainability Standards have become a popular private governance framework for more sustainable agri-food value chains. Yet, amid increasing concerns over the decoupling of standards and practices, it is still unclear to what extent agricultural standard requirements are implemented on the ground, and what may account for such differential implementation. This study employs a novel dataset of 659 Honduran coffee producers to examine this puzzle, focusing on the most widely used standards in the coffee sector (Common Code for the Coffee Community, Fairtrade, Fairtrade/organic, UTZ Certified, and Rainforest Alliance). It first presents results on implementation and behavioral change, based on matched groups of certified and non-certified farmers, for eight representative social and environmental sustainability practices. Analyzing determinants of implementation success, it finds that the stringency of rules – if they are known by farmers – and the level of farm-gate prices are significantly correlated with farmers’ performance and lower levels of decoupling across a majority of indicators. These results speak to the importance of supporting small-scale actors’ awareness of and financial capacity to comply with proposed sustainability rules.     

The politics of resonance: Transnational sustainability governance in Argentina

Why do private governance initiatives trigger greater participation in one country than another? This article examines the domestic dimension of transnational regulation through a case study of private sustainability governance in Argentina. Drawing from theories of contentious politics, the argument poses that the resonance of transnational private governance is shaped by the semantic compatibility of “incoming” sustainability programs against national political culture. Analyzing the limited participation of Argentine actors in contemporary sustainability initiatives, the article claims that the validity and relevance of sustainability programs is affected by three dimensions of national political culture accentuated over the last decade: a politicized model of state‐society relations, the low visibility of environmental matters, and a widespread anti‐corporate culture. By examining the ideational fundamentals of the “politics of resonance” in Argentina, the article makes a relevant and original contribution to transnational regulation literature, highlighting the need for theoretical accounts and empirical analyses that address domestic and cultural variables as fundamental pieces in transnational norm diffusion and effectiveness.     

The instrumental power of transnational private governance: Interest representation and lobbying by private rule‐makers

While scholars have researched transnational private governance for over two decades, we still know little about some of the specific political activities in which private rulemaking schemes engage. This article addresses this topic by bringing together hitherto separate literatures on private governance and interest groups. I argue that examining private governance's instrumental power, and interest representation and lobbying specifically, complements the literature's dominant focus on the structural and discursive power of private governance. The article makes three contributions. First, it conceptualizes private governance schemes as interest organizations by analyzing similarities and differences with traditional interest groups. Second, the article examines instrumental power empirically by assessing the participation of 48 transnational private governance schemes in the European Union's lobby register and variation among private governance schemes in this respect. Finally, the article contributes to developing a new research agenda to continue bridging the gap between the private governance and interest group literatures.     

The Regulatory Gift: Politics,regulation and governance

This article introduces the “regulatory gift” as a conceptual framework for understanding a particular form of government‐led deregulation that is presented as central to the public interest. Contra to theories of regulatory capture, government corruption, “insider” personal interest, or profit‐seeking theories of regulation, the regulatory gift describes reform that is overtly designed by government to reduce or reorient regulators’ functions to the advantage of the regulated and in line with market objectives on a potentially macro (rather than industry‐specific) scale. As a conceptual framework, the regulatory gift is intended to be applicable across regulated sectors of democratic states and in this article the empirical sections evidence the practice of regulatory gifting in contemporary United Kingdom (UK) politics. Specifically, this article analyses the 2011 UK Public Bodies Act, affecting some 900 regulatory public bodies and its correlative legislation, the 2014 Regulator's Code, the 2015 Deregulation Act, and the 2016 Enterprise Bill. The article concludes that while in some cases the regulatory gift may be aligned with the public interest – delivering on cost reduction, enhancing efficiency, and stimulating innovation – this will not always be the case. As the case study of the regulatory body, the UK Human Fertilisation and Embryology Authority, demonstrates, despite the explicit claims made by legislators, the regulatory gift has the potential to significantly undermine the public interest.     

Grounding transnational business governance: A political-strategic perspective on government responses in the Global South

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.     

Private and public authority interactions and the functional quality of sustainability governance: Lessons from conservation and development initiatives in Tanzania

The changing shape of sustainability governance has been a key academic and policy concern in the past two decades, as part of a wider debate on the interactions between public and private authority in governing the economy, society, and the environment. In this article, we contribute to these debates by examining how these interactions operate locally and across jurisdictions in three conservation and development initiatives in Tanzania and what impact they have on the functional quality of sustainability governance. We find that clear division of responsibilities, coupled with material incentives for communities and equal and transparent distribution of benefits, are key positive contributors to functional quality. These factors underpin the complementary interactions (collaborative at the local level; institutional layering across jurisdictions) that are needed to successfully negotiate and implement the compromises needed to balance conservation and development goals. We also find that competitive dynamics are harmful to functional quality, especially those taking the form of local institutional duplication and of dominance by central government across jurisdictions. These tend to appear especially when sustainability initiatives involve multiple stakeholders with wide discrepancies in resources, interests, and power, which leads to compromises determined in a top-down manner.     

The Transformation of organic regulation: The ambiguous effects of publicization

The regulatory regime for organic products is different from other non‐state‐market driven (NSMD) regimes because it is the only one that evolved from a purely private into a regime where the establishment of minimum standards has become the monopoly of public powers. This article is the first to study the effects of the process of publicization, a term coined to characterize the transformation of private into public standards. The central hypothesis studied is that the process of publicization has empowerment and containment effects at the same time. To test the hypothesis the article analyses the effects of publicization on regulatory capabilities of private regulators as well as on the quality of the standards. The effects of publicization are further explored by comparing the legal and institutional architecture that shapes the coexistence of private and public regimes in the EU and the US, showing important differences between the two systems. The article offers a new perspective to look at the dynamic interaction between private and public regulation and its findings are of general relevance for the debate on the desirability of governmental intervention on private regulatory schemes.     

The enabling role of institutional entrepreneurs in the adoption of IPSAS within a transitional economy: The case of Estonia

In the light of neoinstitutional theory and by adopting case study research methodology, this article explains the adoption of International Public Sector Accounting Standards for modernizing public sector accounting in Estonia. This article reveals that the smooth—yet gradual—adoption of International Public Sector Accounting Standards‐compliant accounting systems was enabled by the involvement of powerful actors (i.e., institutional entrepreneurs) with foreign and/or business backgrounds. In addition, the change in public sector accounting in Estonia was facilitated by the developments in its international positioning, characterized by the transition from a Soviet communist to a market economy and subsequent European Union membership and by the absence of past accounting practices, which could potentially hinder the change.     

Historical perspective and better regulatory governance: An agenda for institutional reform

Compared to economics, sociology, political science, and law, the discipline of history has had a limited role in the wide‐ranging efforts to reconsider strategies of regulatory governance, especially inside regulatory institutions. This article explores how more sustained historical perspective might improve regulatory decisionmaking. We first survey how a set of American regulatory agencies currently rely on historical research and analysis, whether for the purposes of public relations or as a means of supporting policymaking. We then consider how regulatory agencies might draw on history more self‐consciously, more strategically, and to greater effect. Three areas stand out in this regard – the use of history to improve understanding of institutional culture; reliance on historical analysis to test the empirical plausibility of conceptual models that make assumptions about the likelihood of potential economic outcomes; and integration of historical research methods into program and policy evaluation.     

The importance of policy entrepreneurs in developing countries: A systematic review and future research agenda

How and with what effect policy entrepreneurship occurs is a persistent and intriguing question for scholars of public policy and administration and political science. So far, the main interest has been on policy entrepreneurship in developed countries rather than developing countries, which largely remains a black box. Adopting a systematic approach to reviewing the literature, this article aims to fill this void. It investigates when, why, and how policy and institutional reforms in developing countries take place, with special reference to the role of policy entrepreneurs. It reviews selected articles published in the Thomson Reuters Web of Knowledge Social Science Citation Index database from 1984 to 2018. It aims to show the current state of empirical and theoretical knowledge about policy entrepreneurship in developing countries and persistent knowledge gaps. The present review contributes to the body of knowledge on this topic in three main ways. First, we provide a comprehensive review of policy entrepreneurship in developing countries. Second, we consolidate existing research in the political science, public policy and administration, and politicial economy disciplines. Third, we establish connections between fragmented literatures, identify gaps between different research streams, and suggest promising paths for future research on policy entrepreneurship in developing countries.     

Orchestrating sustainability: The case of European Union biofuel governance

This article provides an empirical analysis of orchestration – that is, the initiation, support, and embracement of private governance arrangements through public regulators – in the field of European Union biofuel governance. It examines the emerging sustainability regime and shows that orchestration has been extensively practiced. Regulators in the European Union have used a range of directive and facilitative measures to initiate and support private biofuel certification schemes and to incorporate them in their regulatory frameworks. This has given rise to a hybrid regime in which public and private approaches are closely intertwined. Discussing the benefits and complications of engaging with private biofuel sustainability governance, the article's findings point to a partial failure of orchestration in this policy area.     

The unstable core of global finance: Contingent valuation and governance of international accounting standards

Accounting standards are the foundations of the financial regulatory edifice, and global financial governance is no more stable than the asset valuations that feed it. Yet for two decades and up to this day, no international accounting rule for financial instruments – the bulk of banks' balance sheets – has emerged that was more than a temporary fix, to be succeeded by further reforms. We show how banking regulators have been central to this dynamic and how their support for applying fair value accounting to financial instruments, the cornerstone of regulatory debate, has oscillated throughout the whole period. The two common international political economy approaches to global financial governance, which analyze it either as interest‐based bargaining or as ideas‐driven expert governance, fail to account for this pattern. In contrast, we show how the contingency of financial valuations itself has made it impossible for regulators to embrace or reject a stable set of accounting rules.     

Transnational private governance between the logics of empowerment and control

Transnational private governance initiatives that address problems of social and environmental concern now pervade many sectors. In tackling distinct substantive problems, these programs have, however, prioritized different problem‐oriented logics in their institutionalized rules and procedures. One is a “logic of control” that focuses on ameliorating environmental and social externalities by establishing strict and enforceable rules; another is a “logic of empowerment” that concentrates on remedying the exclusion of marginalized actors in the global economy. Examining certification programs in the areas of fair trade, organic agriculture, fisheries, and forest management, we assess the evolutionary effects of programs prioritizing one logic and then having to accommodate the other. The challenges programs face when balancing between the two logics, we argue, elucidate specific distributional consequences for wealth, power, and regulatory capabilities that private governance programs seek to overcome.     

Cyber insurance and private governance: The enforcement power of markets

In the last half decade, cyber insurance has emerged as a multi-billion-dollar industry with the authority to set and enforce standards of security behavior. Although cybersecurity has become a concern of national policymakers, insurers appear to have supplanted the state to play an influential role in governing some aspects of client behavior. This paper explores private governance by cyber insurance firms and evaluates two competing explanations for its emergence – either that the private sector advanced to set and enforce cybersecurity standards for financial gain, or that the state retreated from its responsibility to regulate and private sector actors filled the gap only as necessary. To find an answer between these explanations, this article develops a single outcome case study of the American cyber insurance industry. Following a theoretical introduction to private governance and its manifestation through insurance, the article examines the insurance process and its application in cybersecurity, the key role of standards, and the mechanism of enforcing those standards. The article concludes by identifying key elements of this market-based enforcement and discussing implications for crafting effective private governance in other domains and public policy.     

Community structure and the behavior of transnational sustainability governors: Toward a multi‐relational approach

Hundreds of transnational private governance organizations (TPGOs) have emerged in recent decades to govern social and environmental conditions of production using voluntary standards. A debate persists over whether the ties among different TPGOs and other organizations create a professional community that affects the behavior of TPGOs. To help resolve this debate, we analyze multiple ties among agriculture TPGOs to offer a more robust exploration of community structures and their potential effects for three forms of TPGO behavior – coordination, collaboration, and isomorphism. Our aggregate measure of ties reveals a thin community dominated by older TPGOs and TPGOs advancing a broad notion of sustainability that were created by Solidaridad, the World Wildlife Fund, and/or Unilever. The clearest community structures are built from ties that exhibit the potential for not actual collaboration, coordination, and isomorphism. Thus, while there exists convergence toward an emergent TPGO‐community, obstacles remain to more intense behavioral effects for TPGOs.