The governance triangle: Regulatory standards institutions and the shadow of the state

TLDR

Since the 1980s, voluntary standards for global production in worker rights, human rights, and environmental protection have been set by non‑state and public‑private arrangements, a process called regulatory standard‑setting (RSS) that requires expertise, operational capacity, independence, and representativeness, usually achieved through collaboration among business, civil society, and state actors. The study analyzes the pattern of actor participation in RSS schemes using a distributive bargaining framework. The authors model RSS actors as bargaining implicitly via individual actions to shape regulatory space and explicitly within collaborative schemes. The decentralized bargaining process can produce outcomes that do or do not serve the public interest, but states and international organizations can steer results toward the public interest by legitimating suitable RSS schemes and strengthening weaker actors’ bargaining power.

Abstract

Since the 1980s, numerous non-state and public-private governance arrangements have been created to set and implement voluntary standards for global production in areas including worker rights, human rights, and environmental protection. We call this process “regulatory standard-setting” (RSS), as these standards are designed to address externalities, not to promote technical coordination. To be effective and legitimate regulators, RSS schemes require competencies including expertise, operational capacity, independence, and representativeness. Collaboration among business, civil society, and state actors is essential to assemble the full suite of competencies. Yet most RSS schemes involve a single actor type, and thus lack important competencies. We analyze this pattern in terms of distributive bargaining. Firms, nongovernmental organizations, and other actors pursue their special interests and values with differential power, based on their competencies. They bargain implicitly, through individual actions to control the regulatory space, and explicitly, in collaborative schemes. The results of this decentralized process may or may not serve the public interest. Yet states and international organizations can promote outcomes closer to the public interest by legitimating and supporting appropriate RSS schemes, and by reinforcing the bargaining power of weaker actors.