Firms face political threats not only from government but also from civil society. While the relative power of business vis-à-vis the federal government has increased in many policy areas, many firms have become more vulnerable to private or nonstate public pressures. There is a large literature on the dynamics of private regulatory policymaking, often associated with corporate social responsibility (CSR). However, it has focused primarily on the international dimensions of business behavior.

Timothy Werner's study is distinctive in that it places private regulation in the context of American politics. The goals of this book are both to better understand why firms decide to go beyond legal compliance for their domestic business practices and to integrate the study of private and public regulatory politics and policies.

Werner's theory of private policymaking has two dimensions. The first has to do with characteristics of the firm itself. Business self-regulation is more likely to the extent that a firm has a positive reputation and has greater political capacity and experience. The second focuses on the political characteristics of each issue. If it is highly salient and also reflects a public consensus, then firms will engage in self-regulation both in response to pressures from the public and in order to avoid the threat of additional regulation. If an issue is highly salient but politically contentious, then private policies will be shaped primarily by public opinion. If the issue is not salient but public consensus is high, then private policies will be driven exclusively by the threat of regulation. Finally, private policies are unlikely to be adopted if an issue is of low salience and there is a lack of public consensus.

Werner begins by demonstrating a positive correlation between a firm's reputation and its political capacity, on the one hand, and its adoption of various dimensions of corporate social responsibility, on the other. He then presents extensive data on three different kinds of policies in order to demonstrate how the nature of an issue also affects why a firm would chose to self-regulate. These three policy areas are corporate environmentalism in the United States (highly salient and consensual), gay rights in the marketplace (highly salient and contentious), and executive compensation (low salience, consensual).

Unfortunately, some of the evidence that Werner employs to test his theory of private policymaking is not well constructed. Consider, for example, how the independent variable of corporate reputation, which occupies a central place in his model, is measured. It is defined as the difference between a firm's market and net book value. This may well be a good indication of how the financial markets value a firm, but it does not help us understand how a firm's reputation shapes its voluntary initiatives. In fact, private regulation often represents the response of firms to a decline in their reputation.

The chapter on corporate environmentalism, in particular, reveals the shortcomings of Werner's model and methodology. He explicitly assumes that corporate environmentalism imposes additional costs on a firm, and thus he wants to explain why a manager would chose to assume them. But this ignores the substantial body of research that demonstrates that firms have often voluntarily improved their environmental practices not only or even primarily due to public pressures or fears of additional government regulation—the two casual mechanisms on which Werner focuses—but because many managers have recognized that becoming “greener” is more profitable.

In addition, the two quantitative measures that Werner uses to measure corporate environmentalism, namely, a firm's adoption of a pollution-prevention program and its environmental report, are poor measures of actual corporate environmental practices. Neither indicates that a firm's environmental practices go beyond those required by law.

The author concludes that voluntary corporate environmental initiatives are part of a business strategy to avoid the threat of government regulation. But this overlooks the fact that in some cases, firms have benefited from, and lobbied for, stronger environmental regulation. This example of business self-regulation also does not support Werner's claim that he has identified “a new form of policy feedback, in which private policies crowd out support for formal regulation” (p. 153). Environmental activists may well have been less successful in changing more public regulations than private ones, but this does not mean that they view the latter as an adequate substitute for the former.

The chapter explaining corporate adoption of domestic-partner benefits for gay employees and nondiscrimination policies works much better, in part because its dependent variables are straightforward. The data Werner has collected and analyzed convincingly demonstrate how “the shifting demands of public opinion drive corporate decision-making on highly divisive and salient issues” (p. 113). This chapter links the book's analysis to the substantial literature on the role of social movements in driving changes in corporate policies, even or especially when the threat of regulation is absent. However, I am not convinced that the distinction between consensual and contentious politics is a useful indicator or predictor of the likelihood of government action.

Werner supplements his quantitative research with interviews with 40 corporate executives, the results of which are reported early in the book. These interviews reveal that much private regulation is driven by anticipated political benefits, which is an informative finding, and that virtually all firms have increased their amount of self-regulation, which is already well known. But the results of these interviews largely disappear from the rest of the study. This is unfortunate because they could have enriched the three case studies considerably.

I recognize the pressures on scholars to “prove” their findings though quantitative methods and appreciate the challenges of doing so. But a more balanced use of quantitative and qualitative data would have given us more insights into the “black box” of business political decision making. This book would have been considerably stronger had Werner also discussed how specific firms had addressed particular policy issues and revealed how their private regulatory policies interacted with their governmental affairs strategies.

By integrating the study of corporate private policies and business–government relations, Werner has identified an important and insufficiently researched and theorized dimension of business and public policy in the United States. Public Forces and Private Politics in American Big Business is ambitious and extensively researched. It is unfortunate that the author's methodology has limited the importance of its contribution. But the book engages very important questions, and both the author and other scholars should be encouraged to pursue them further.