Hostname: page-component-7b7567c8c-2n9c9 Total loading time: 0 Render date: 2026-11-14T08:01:47.306Z Has data issue: false hasContentIssue false
  • English
  • Français

Does it really take the state?

Published online by Cambridge University Press:  20 January 2017

Tanja A. Börzel,
Jana Hönke and
Christian R. Thauer
Jana Hönke
Affiliation:
Freie Universität Berlin, Ihnestraße 22, D-14195 Berlin, Germany
Christian R. Thauer
Affiliation:
Freie Universität Berlin, Ihnestraße 22, D-14195 Berlin, Germany
Get accessRights & Permissions [Opens in a new window]

Abstract

This paper explores the role of the state for an effective engagement of multinational corporations (MNCs) in corporate social responsibility (CSR). 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.

Information

Type
Corporate Responsibility, Multinational Corporations, and Nation States
Information
Business and Politics , Volume 14 , Issue 3: Special Issue: Corporate Responsibility, Multinational Corporations, and Nation States , October 2012, pp. 1 - 34
Copyright
Copyright © V.K. Aggarwal 2012 and published under exclusive license to Cambridge University Press 

Access options

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

Article purchase

Temporarily unavailable

References

Amengual, M. 2010. “Complementary labor regulation: the uncoordinated combination of state and private regulators in the domenican republic.” World Development 38 (3): 405–414.CrossRefGoogle Scholar
Ammenberg, J. and Hjelm, O. 2003. “Tracing business and environmental effects of environmental management systems – a study of networking small and medium-sized enterprises using a joint environmental management system.” Business Strategy and the Environment 12 (3): 163–174.CrossRefGoogle Scholar
Anton, W. R. Q., Deltas, G. and Khanna, M. 2004. “Incentives for environmental self-regulation and implications for environmental performance.” Journal of Environmental Economics and Management 48 (1): 632–654.CrossRefGoogle Scholar
Auld, G., Bernstein, S. and Cashore, B. 2008. “The new corporate social responsibility.” Annual Review of Environment and Resources 33: 413–435.CrossRefGoogle Scholar
Bansal, P. 2005. “Evolving sustainability: a longitudinal study of corporate sustainable development.” Strategic Management Journal 26 (3): 197–218.CrossRefGoogle Scholar
Bansal, P. and Roth, K. 2000. “Why companies go green: a model of ecological responsiveness.” Academy of Management Journal 43 (4): 717–736.CrossRefGoogle Scholar
Barney, J. B. 1997. Gaining and sustaining competitive advantage. Reading, MA: Addison-Wesley.Google Scholar
Baron, D. P. 2003. “Private politics.” Journal of Economics and Management 12 (1): 31–66.Google Scholar
Blanton, R. G. and Blanton, S. L. 2007. “Human rights and trade: beyond the ‘Spotlight’.” International Interactions 33 (2): 97–117.CrossRefGoogle Scholar
Börzel, T. A. 2009. “New modes of governance and accession. the paradox of double weakness.” In: Börzel, T. A. (ed.), Coping with accession to the European union. New modes of environmental governance. Houndmills: Palgrave Macmillan, pp. 7–31.CrossRefGoogle Scholar
Börzel, T. A. 2012. “How much statehood does it take – and what for?” SFB Working Papers No.29; Sonderforschungsbereich 700, Freie Universität Berlin.Google Scholar
Börzel, T. A. and Risse, T. 2010. “Governance without a state – can it work?” Regulation and Governance 4 (2): 1–22.CrossRefGoogle Scholar
Börzel, T. A. and Hönke, J. 2011. “From compliance to practice. Mining companies and the voluntary principles on security and human rights in the democratic Republic of Congo.” SFB Working Papers No. 25; Sonderforschungsbereich 700, Freie Universität Berlin.CrossRefGoogle Scholar
Börzel, T. A. and Thauer, C., eds. 2013. Racing to the top? Business and governance in South Africa. London: Palgrave.CrossRefGoogle Scholar
Bowen, F., Newenham-Kahindi, A. and Herremans, I. 2008. Engaging the community: a systematic review. Calgary: University of Calgary.Google Scholar
Brozus, L. 2011. “Applying the governance concept to areas of limited statehood: implications for international foreign and security policy.” In: Risse, T. (ed.), Governance without a state? policies and politics in areas of limited statehood. New York: Columbia University Press.Google Scholar
Chan, A. and Ross, R. J. 2003. “Racing to the bottom. Industrial trade without a social clause.” Third World Quarterly 24 (6): 1011–1028.CrossRefGoogle Scholar
Cutler, C. A., Haufler, V. and Porter, T., eds. 1999. Private authority and international affairs. Albany: State University of New York.Google Scholar
Deitelhoff, N. and Wolf, K.-D., eds. 2010. Corporate security responsibility? corporate governance contributions to peace and security in zones of conflict. Houndmills: Palgrave.CrossRefGoogle Scholar
Draude, A. 2007. “How to capture non-western forms of governance: in favor of an equivalence functionalist observation of governance in areas of limited statehood.” In SFB 700 Working Paper No. 2. Berlin: Freie Universität Berlin.Google Scholar
Epstein, M. J. 2008. Making sustainability work. Best practices in managing and measuring corporate social, environmental and economic impacts. Sheffield: Greenleaf Publishing.Google Scholar
Epstein, M. J. and Roy, M.-J. 2007. “Implementing a corporate environmental strategy. Establishing coordination and control within multinational companies.” Business Strategy and the Environment 16 (6): 389–403.CrossRefGoogle Scholar
Eweje, G. 2005. “The role of mines in community development initiatives in developing countries. Corporate social responsibility at work in Nigeria and South Africa.” Business and Society 45 (2): 93–129.CrossRefGoogle Scholar
Farrell, J. 2007. “Should competition policy favor compatibility?” In: Greenstein, S. and Stango, V. (eds.), Standards and public policy. Cambridge: Cambridge University Press, pp. 372–389.Google Scholar
Flanagan, R. J. 2006. Globalization and labor conditions. Oxford: Oxford University Press.CrossRefGoogle Scholar
Flohr, A., Rieth, L., Schwindenhammer, S. and Wolf, K. D. 2010. The role of business in global governance. corporations as norm-entrepreneurs. Basingstoke: Palgrave.Google Scholar
Fourie, P. 2006. The political management of HIv HIV and AIDS in South Africa. Basingstoke: Palgrave.CrossRefGoogle Scholar
Greenhill, B., Mosley, L. and Prakash, A. 2009. “Trade-based diffusion of labor rights: a panel study, 1986–2002.” American Political Science Review 103 (4): 669–690.CrossRefGoogle Scholar
Greenstein, S. and Stango, V. eds. 2007. Standards and public policy. Cambridge: Cambridge University Press.Google Scholar
Halfteck, G. 2008. “Legislative threats.” Stanford law review 61, (available at SSRN: http://ssrn.com/abstract=1113173).Google Scholar
Hall, R. B. and Bierstecker, T. J., eds. 2002. The emergence of private authority in global governance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Handley, A. 2008. Business and the state in africa. Economic policy-making in the neo-liberal era. Cambridge: Cambridge University Press.Google Scholar
Haufler, V. 2001. A pulic role for the private sector - – industry self-regulation in a global economy. Washington, DC: Carnegie Endowment for International Peace.Google Scholar
Hellmann, J. S., Jones, G., Kaufmann, D. and Schankerman, M. 2002. “Measuring governance, corruption, and state capture: how firms and bureaucrats shape business environment in transition economies.” In Policy Research Working Paper. Washington, DC: The World Bank Institute.Google Scholar
Hendry, J. 2006. “Taking aim at business.” Business and Society 45 (1): 47–86.CrossRefGoogle Scholar
Héritier, A. and Lehmkuhl, D., eds. 2008. “The ‘shadow of hierarchy’ and New Modes of Governance.” Special Issue Journal of Public Policy 28 (1).Google Scholar
Héritier, A., Müller-Debus, A. and Thauer, C. 2009. “The firm as an inspector: private ordering and political rules.” Business and Politics 11 (4): Art. 2.CrossRefGoogle Scholar
Hoffmann, A. 2001. From heresy to dogma: an institutional history of corporate environmentalism. Palo Alto, CA: Stanford University Press.Google Scholar
Hönke, J. 2012. “Multinationals and security governance in the community. participation, discipline and indirect rule.” Journal of Intervention and Statebuilding 6 (1): 89–105.CrossRefGoogle Scholar
Hönke, J. 2013. Transnational companies and (in)security governance. London: Routledge.CrossRefGoogle Scholar
Hönke, J. 2013. “Between cause and cure. The mining industry and HIV/AIDS governance in South Africa.” In: Börzel, T. A. and Thauer, C. (eds.), Racing to the top? business and governance in South Africa. London: Palgrave.Google Scholar
Hönke, J. and Kranz, N. 2013. “Cleaning up their act, or more? Mining companies and environmental protection in South Africa.” In: Börzel, T. A. and Thauer, C. (eds.), Racing to the top? business and governance in South Africa. London: Palgrave.Google Scholar
Hönke, J., and Thomas, E. 2012. “Governance for whom? Capturing the inclusiveness and unintended effects of governance.” SFB Working Papers; Sonderforschungsbereich 700 No.31, Freie Universität Berlin.Google Scholar
HRW. 2005. The curse of gold (Democratic Republic of Congo). New York: Human Rights Watch.Google Scholar
Kantz, C. 2006. “Logs and precious stones. The role of divergent corporate strategies in creating. Commodity tracking regimes.” Berlin: Berlin Conference on the Human Dimensions of Global Environmental Change.Google Scholar
Kaufmann, R. R. and Segura-Ubiergo, A. 2001. “Globalization, domestic politics, and social spending in Latin America: a time-series cross-section analysis, 1973–1997.” World Politics 53 (4): 553–587.CrossRefGoogle Scholar
Kollman, K. and Prakash, A. 2001. “Green by choice? Cross-National variations in firms’ responses to EMS-based environmental regimes.” World Politics 53 (3): 399–430.CrossRefGoogle Scholar
Ladwig, B. and Rudolf, B. 2011. “International legal and moral standards of good governance in fragile states.” In: Risse, T. and Lehmkuhl, U. (eds.), Governance in areas of limited statehood. New York: Columbia University Press.Google Scholar
Leibfried, S. and Zürn, M., eds. 2005. Transformations of the state? Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Lofdahl, C. L. 2002. Environmental impact of globalization and trade. A systems study. Cambridge, MA: MIT Press.Google Scholar
Lund-Thomson, P. 2005. “Corporate accountability in South Africa. The role of community mobilizing in environmental governance.” International Affairs 81 (3): 619–633.CrossRefGoogle Scholar
Mahajan, A. P., Colvinb, M., Rudatsikiraa, J.-B. and Ettl, D. 2007. “An overview of HIV/AIDS workplace policies and programmes in Southern Africa.” AIDS 21 (3): 31–39.CrossRefGoogle ScholarPubMed
Malherbe, S. 2000. A perspective on the south african mining industry in the 21st century. Cape Town: Graduate School of Business of the University of Cape Town.Google Scholar
Mayntz, R. and Scharpf, F. W. 1995. “Der Ansatz Des Akteurszentrierten Institutionalismus.” In: Mayntz, R. and Scharpf, F. W. (eds.), Gesellschaftliche Selbstregulierung Und Politische Steuerung. Frankfurt a.M.: Campus, pp. 39–72.Google Scholar
Mol, A. P. J. 2001. Globalization and environmental reforms: the ecological modernization of the global economy. Cambridge, MA: MIT Press.Google Scholar
Newell, P. J. 2001. “Managing multinationals. The governance of investment for the environment.” Journal of International Development 13 (7): 907–919.CrossRefGoogle Scholar
Paes, W.-C. 2005. “‘Conflict’ diamonds to ‘clean’ diamonds: the development of the kimberley process certification scheme.” In: Mehler, A. and Basedau, A. (eds.), Resource politics in sub-saharan Africa. Hamburg: Institute for African Studies, pp. 305–324.Google Scholar
Parker, C. 2002. The open corporation: effective self-regulation and democracy. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Pattberg, P. 2006. “Private governance and the south: lessons from global forest politics.” Third World Quarterly 27 (4): 579–593.CrossRefGoogle Scholar
Perrow, C. 1972. Complex organizations: a critical essay. New York: McGraw Hill Publishers.Google Scholar
Porter, M. E. and van der Linde, C. 1995. “Toward a new conception of the environment-competitiveness relationship.” Journal of Economic Perspectives 9 (4): 97–118.CrossRefGoogle Scholar
Porter, M. E. and Kramer, M. R. 2002. “The competitive advantage of corporate philanthropy.” Harvard Business Review 80 (12): 56–68.Google ScholarPubMed
Potoski, M. and Prakash, A. 2005. “Green clubs and voluntary governance. Iso 14001 and firms’ regulatory compliance.” American Journal of Political Science 49 (2): 235–248.CrossRefGoogle Scholar
Prakash, S. 2005. “The effectiveness of industry-based codes in serving public interest. The case of the international council on mining and metals.” Transnational Corporations 14 (3): 55–100.Google Scholar
Prakash, A. and Potoski, M. 2006. The voluntary environmentalists: green clubs, iso 14001 and voluntary environmental regulations. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Prakash, A. and Potoski, M. 2007. “Investing up: FDI and the cross-country diffusion of ISO 14001 management systems.” International Studies Quarterly 51 (3): 723–744.CrossRefGoogle Scholar
Reno, W. 2001. “How sovereignty matters: international markets and the political economy of local politics in weak states.” In: Callaghy, T. M., Kassimir, R. and Latham, R. (eds.), Intervention and transnationalism in Africa: global-local networks of power. Cambridge: Cambridge University Press, pp. 197–215.CrossRefGoogle Scholar
Risse, T. 2011. “Governance in areas of limited statehood: introduction and overview.” In: Risse, T. (ed.), Governance without a state? Policies and politics in areas of limited statehood. New York: Columbia University Press.Google Scholar
Ronit, K. and Schneider, V. 2000. Private organizations in global politics. New York: Routledge.Google Scholar
Rotberg, R. I. 2003. State failure and state weakness in a time of terror. Washington, DC: Brookings Institution Press.Google Scholar
Rudra, N. 2002. “Globalization and the decline of the welfare state in less-developed countries.” International Organization 56 (2): 411–445.CrossRefGoogle Scholar
Ruggie, J. G. 2004. “How to Marry Civic politics and private governance.” In: Carnegie Council on Ethics and International Affairs. The impact of global corporations on global governance. New York: Carnegie Council on Ethics and International Affairs, pp. 10–15.Google Scholar
Schäferhoff, M. 2011. “Die Bereitstellung Von Gesundheitsleistungen in Räumen Begrenzter Staatlichkeit. Ist Der Staat Entbehrlich?” In: Beisheim, M., Börzel, T. A., Genschel, P. and Zangl, B. (eds.), Was Vom Staate Übrig Bleibt. Der Staatliche Beitrag Zu Governance. Baden-Baden: Nomos, pp. 117–142.Google Scholar
Scharpf, F. W. 1997. Games real actors play. Actor-centered Institutionalism in policy research. Boulder, CO: Westview Press.Google Scholar
Schepers, D. 2006. “The impact of NGO network conflict on the corporate social responsibility strategies of multinational corporations.” Business and Society 45 (3): 282–299.CrossRefGoogle Scholar
Smith, C N. 2008. “Consumers as drivers of corporate social responsibility.” In: Crane, A., McWilliams, A., Matten, D., Moon, J. and Siegel, D. S. (eds.), The oxford handbook of corporate social responsibility. Oxford: Oxford University Press, pp. 303–323.Google Scholar
Spar, D. L. and LaMure, L. T. 2003. “The power of activism: assessing the impact of NGOs on global business.” California Management Review 45: 78–101.CrossRefGoogle Scholar
Stigler, G. 1971. “The theory of economic regulation.” Bell Journal of Economics and Management Science 2 (1): 3–21.Google Scholar
Szablowski, D. 2007. Transnational law and local struggles: mining, communities, and the World Bank. Oxford; Portland, OR: Hart Pub.Google Scholar
Thauer, C. R. 2010. “Corporate social responsibility in the regulatory void – does the promise hold? Self-regulation by business in South Africa and China. Phd Thesis.” PhD diss., Florence: European University Institute.Google Scholar
Thauer, C. R. 2014. “Goodness comes from within. Intra-organizational dynamics of corporate social responsibility.” Business and Society.Google Scholar
Trullen, J. and Stevenson, W. B. 2006. “Strategy and legitimacy: pharmaceutical companies’ reaction to the HIV crisis.” Business and Society 45 (2): 178–210.CrossRefGoogle Scholar
Tsai, L. 2007. Accountability without democracy. Solidarity groups and public goods provision in rural China. Cambridge: Cambridge University Press.Google Scholar
Tsai, L. 2011. “Friends or foes? Nonstate public goods providers and local state authorities in nondemocratic and transitional systems.” Studies in Comparative International Development 46 (1): 46–89.CrossRefGoogle Scholar
Vogel, D. and Kagan, R., eds. 2004. Dynamics of regulatory change: how globalization affects national regulatory policies. Berkeley, Los Angeles: University of California Press.Google Scholar
Waygood, S. 2006. Capital market campaigning. The impact of NGOs on companies, shareholder value and reputational risk. London: Risk Books.Google Scholar
Wheeler, D. 2001. “Racing to the bottom? Foreign investment and air pollution in developing countries.” Journal of Environment and Development 10 (3): 225–245.CrossRefGoogle Scholar