Skip to Main Content
Have library access? Log in through your library
A Public Role for the Private Sector

A Public Role for the Private Sector: Industry Self-Regulation in a Global Economy

Virginia Haufler
Copyright Date: 2001
Pages: 160
  • Cite this Item
  • Book Info
    A Public Role for the Private Sector
    Book Description:

    Increasing economic competition combined with the powerful threat of transnational activism are pushing firms to develop new political strategies. Over the past decade a growing number of corporations have adopted policies of industry self-regulation -corporate codes of conduct, social and environmental standards, and auditing and monitoring systems. A Public Role for the Private Sector explores the phenomenon of industry self-regulation through three different cases -environment, labor, and information privacy -where corporate leaders appear to be converging on industry self-regulation as the appropriate response to competing pressures. Political and economic risks, reputational effects, and learning within the business community all influence the adoption of a self-regulatory strategy, but there are wide variations in the strength and character of it across industries and issue areas. Industry self-regulation raises significant questions about the place of the private sector in regulation and governance, and the accountability, legitimacy and power of industry at a time of rapid globalization.

    eISBN: 978-0-87003-337-7
    Subjects: Political Science, Business, Economics

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. Foreword
    (pp. vii-viii)
    Jessica T. Mathews

    MULTINATIONAL CORPORATIONS have taken advantage of increasingly integrated markets to organize production on a global scale. There now exist over 60,000 multinational corporations with more than 450,000 subsidiaries in every corner of the world. Major companies buy products from literally tens of thousands of subcontractors in developed and developing countries alike. The private sector is weaving together the world economy to an unprecedented degree.

    In the process, most people believe that multinational corporations deliberately undermine national regulatory systems and drive standards down to the lowest common denominator. Yet, many companies participate in collective efforts to develop new international standards that...

  4. Preface
    (pp. ix-x)
  5. Acronyms
    (pp. xi-xii)
  6. Introduction
    (pp. 1-6)

    IN THE PAST DECADE, most major multinational corporations (MNCs)—and many smaller ones—have rushed to develop new codes of conduct that set standards for their behavior on issues that top the international agenda. These issues include everything from the use of sweatshop labor to the level of carbon emissions from their factories. In a turnabout from the past, many companies now actively seek out their critics in the nonprofit world as partners for new social and environmental programs. Some dismiss this new approach as a public relations ploy designed to ward off government regulation and make the companies look...

  7. 1 Public and Private Interests in Global Regulation: An Overview of the Issues
    (pp. 7-30)

    THE PUBLIC AND MOST POLITICIANS are just beginning to engage in serious debate over the conditions under which industry self-regulation makes sense in the era of globalization. This debate requires more understanding of the driving forces behind this trend—forces that reflect the relative power of governments to rule, industry to gain authority in new spheres, and the public to influence policy. Many people have decried the effects of globalization and argue that power is shifting dramatically into the hands of corporations. William Greider titled his recent bookOne World, Ready or Not; David Korten called his bookWhen Corporations...

  8. 2 The Case of International Environmental Protection
    (pp. 31-52)

    IN THE UNITED STATES and other industrialized countries, environmental issues are some of the most contentious problems policy makers face. From water pollution to ozone depletion to global warming, society faces an array of daunting choices about how to reconcile a modern industrial economy with the evident harm to the natural environment. In the past three decades, the United States and many countries in Europe erected an extensive regulatory system to clean up the air, water, and land. Some newly industrializing countries are only beginning to develop an environmental regulatory system, while many others ignore environmental concerns in their efforts...

  9. 3 The Case of Labor Standards Abroad
    (pp. 53-80)

    LABOR STANDARDS are in many ways an old issue, and this has shaped the evolution of voluntary business initiatives in this area. The central labor problem is that management wants to keep the costs of production low, including the cost of labor, to reap higher profits. Marx famously pointed to the intractable differences between labor and management in an industrial era. The twentieth century has been marked by tensions between labor and management in every country. In many industrialized nations after World War II, this fundamental conflict was muted by the establishment of the welfare state and a series of...

  10. 4 The Case of Information Privacy
    (pp. 81-104)

    THE INFORMATION REVOLUTION has put a whole new set of issues on the international agenda. Throughout the 1980s and 1990s, governments around the world deregulated and privatized old-line industries such as telecommunications (Drake 1999). Computers transformed business practices and facilitated the expansion of TNCs and global business networks. The creation and commercialization of the Internet led to the development of entirely new industries, transformed older sectors of the economy, and provided entirely new services for citizens, governments, and businesses. Excitement over the opportunities created by this “new economy” has been tempered, however, by the challenge of creating an appropriate social...

  11. 5 The Evolution of New Global Rules
    (pp. 105-122)

    THIS BOOK HAS SOUGHT to explore the issues raised when the private sector takes on a public role, specifically industry’s trend toward self-regulation. It has examined how self-regulation plays out in three areas of global concern: environment, labor, and information privacy. This concluding chapter starts by comparing and contrasting these three cases of self-regulation. It examines the differences and similarities in the importance of risk, reputation, and learning in each case and offers an assessment of self-regulation in light of arguments about corporate power and the perception that this activity is simply a public relations policy. The next section analyzes...

  12. Notes
    (pp. 123-136)
  13. References
    (pp. 137-146)
  14. Index
    (pp. 147-158)
  15. About the Author
    (pp. 159-159)
  16. About the Carnegie Endowment for International Peace
    (pp. 160-160)
  17. Back Matter
    (pp. 161-161)