Skip to main content

Input and Output Legitimacy of Multi-Stakeholder Initiatives

  • Sébastien Mena (a1) and Guido Palazzo (a1)

In a globalizing world, governments are not always able or willing to regulate the social and environmental externalities of global business activities. Multi-stakeholder initiatives (MSI), defined as global institutions involving mainly corporations and civil society organizations, are one type of regulatory mechanism that tries to fill this gap by issuing soft law regulation. This conceptual paper examines the conditions of a legitimate transfer of regulatory power from traditional democratic nation-state processes to private regulatory schemes, such as MSIs. Democratic legitimacy is typically concerned with input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). In this study, we identify MSI input legitimacy criteria (inclusion, procedural fairness, consensual orientation, and transparency) and those of MSI output legitimacy (rule coverage, efficacy, and enforcement), and discuss their implications for MSI democratic legitimacy.

Hide All
Abbott K.W., & Snidal D. 2000. Hard and soft law in international governance. International Organization, 54: 421–56.
Arya B., & Salk J.E. 2006. Cross sector alliance learning and effectiveness of voluntary codes of corporate social responsibility. Business Ethics Quarterly, 16: 211–34.
Bäckstrand K. 2006. Multi-stakeholder partnerships for sustainable development: Rethinking legitimacy, accountability and effectiveness. European Environment, 16: 290306.
Barber B. 1984. Strong democracy: Participatory politics for a new age. Berkeley: University of California Press.
Bartley T. 2007. Institutional emergence in an era of globalization: The rise of transnational private regulation of labor and environmental conditions. American Journal of Sociology, 113: 297351.
Bartley T. 2010. Transnational private regulation in practice: The limits of forest and labor standards certification in Indonesia. Business & Politics, 12(3): art. 7.
Bass S., & Simula M. 1999. Independent certification/verification of forest management. Washington, D.C.: World Bank/WWF Alliance Workshop.
Beisheim M., & Dingwerth K. 2008. Procedural legitimacy and private transnational governance: Are the good ones doing better? Berlin: SFB-Governance Working Paper Series No. 14.
Bellah R.N., Madsen R., Sullivanh W.M., Swidler A., & Tipton S.M. 1986. Habits of the heart: Individualism and commitment in American life. Washington, D.C.: Harper and Row.
Bernstein S., & Cashore B. 2007. Can non-state global governance be legitimate? An analytical framework. Regulation & Governance, 1: 347–71.
Black J. 2008. Constructing and contesting legitimacy and accountability in polycentric regulatory regimes. Regulation & Governance, 2: 137–64.
Börzel T.A., & Risse T. 2005. Public-private partnerships: Effective and legitimate tools of international governance? In Grande E., & Pauly L.W. (Eds.), Complex sovereignty: Reconstituting political authority in the twenty-first century: 195216. Toronto: University of Toronto Press.
Bouslah K., M’Zali B., Turcotte M.-F., & Kooli M. 2010. The impact of forest certification on firm financial performance in Canada and the US. Journal of Business Ethics, 96: 551–72.
Buckley P.J., & Ghauri P.N. 2004. Globalisation, economic geography and the strategy of multinational enterprises. Journal of International Business Studies, 35: 8198.
Cashore B. 2002. Legitimacy and the privatization of environmental governance: How non-state market-driven governance systems gain rule-making authority. Governance, 15(4): 503–29.
Cassel D. 2001. Human rights and business responsibilities in the global marketplace. Business Ethics Quarterly, 11: 261–74.
Cerny P.G. 1999. Globalization and the erosion of democracy. European Journal of Political Research, 36: 126
Christmann P., & Taylor G. 2001. Globalization and the environment: Determinants of firm self-regulation in China. Journal of International Business Studies, 32: 439–58.
Christmann P., & Taylor G. 2006. Firm self-regulation through international certifiable standards: Determinants of symbolic versus substantive implementation. Journal of International Business Studies, 37: 863–78.
Clausen J., Ankele K., & Petschow U. 2005. The role of voluntary initiatives in sustainable corporate governance In Petschow U., Rosenau J., & von Weizsäcker E.-U. (Eds.), Governance and sustainability: New challenges for states, companies and civil society: 176–85. Sheffield: Greenleaf Publishing.
CSR Europe. 2010. GRI: Sweden and Denmark lead the way in sustainability reporting, first accessed February 2011.
Cubbage F.W., & Moore S. 2008. Impacts and costs of forest certification: A survey of SFI and FSC in North America. Paper presented at the 2008 Sustainable Forestry Initiative Meeting, Minneapolis.
Dahan N., Doh J., & Guay T. 2006. The role of multinational corporations in transnational institution building: A policy network perspective. Human Relations, 59(11): 15711600.
de Senarclens P., & Kazancigil A. (Eds.). 2007. Regulating globalization: Critical approaches to global governance. Tokyo: United Nations University Press.
Deephouse D.L. 1996. Does isomorphism legitimate?. Academy of Management Journal, 39: 1024–39.
Dingwerth K. 2008. North-South parity in global governance: The affirmative procedures of the Forest Stewardship Council. Global Governance, 14: 5371.
Domask J. 2003. From boycotts to global partnership: NGOs, the private sector, and the struggle to protect the world forests In Doh J.P., & Teegen H. (Eds.), Globalization and NGOs: Transforming business, government, and society: 157–86. Westport: Praeger Publishers.
Dupuy P.-M. 1991. Soft law and the international law of the environment. Michigan Journal of International Law, 12: 420–35.
Easton D. 1957. An approach to the analysis of political systems. World Politics, 9: 383400.
Elms H., & Phillips R.A. 2009. Private security companies and institutional legitimacy: Corporate and stakeholder responsibility. Business Ethics Quarterly, 19: 403–32.
Elster J. 1986. The market and the forum: Three varieties of political theory In Elster J., & Hylland A. (Eds.), Foundations of social choice theory: 103–326. Cambridge: Cambridge University Press.
Florini A. 1998. The end of secrecy. Foreign Policy, 111: 5063.
Fransen L.W., & Kolk A. 2007. Global rule-setting for business: A critical analysis of multi-stakeholder standards. Organization, 14: 667–84.
Fritsch S. 2008. The UN Global Compact and the global governance of corporate social responsibility: Complex multilateralism for a more human globalization?. Global Society, 22: 126.
Fung A. 2003. Deliberative democracy and international labor standards. Governance, 16: 5171.
Fung A. 2005. Deliberation before the revolution: Toward an ethics of deliberative democracy in an unjust world. Political Theory, 33: 397419.
Gardberg N.A., & Fombrun C.J. 2002. The global reputation quotient project: First steps towards a cross-nationally valid measure of corporate reputation. Corporate Reputation Review, 4: 303–07.
Gereffi G., Garcia-Johnson R., & Sasser C.J. 2001. The NGO-industrial complex. Foreign Policy, 125: 5665.
Gilbert D.U., & Rasche A. 2007. Discourse ethics and social accountability: The ethics of SA 8000. Business Ethics Quarterly, 17: 187216.
Gilbert D.U., & Rasche A. 2008. Opportunities and problems of standardized ethics initiatives: A stakeholder theory perspective. Journal of Business Ethics, 82: 755–73.
Glasbergen P. 2011. Mechanisms of private meta-governance: An analysis of global private governance for sustainable development. International Journal of Strategic Business Alliances, 2: 189206.
Graz J.-C., & Nölke A. (Eds.). 2008. Transnational private governance and its limits. London: Routledge.
Gutmann A., & Thompson F. 1996. Democracy and disagreement. Cambridge, Mass.: Harvard University Press.
Habermas J. 1990. The new conservatism. Cambridge, Mass.: MIT Press.
Habermas J. 1996. Between facts and norms. Cambridge, Mass.: MIT Press.
Habermas J. 1998. The inclusion of the other: Studies in political theory. Cambridge, Mass.: MIT Press.
Habermas J. 2001. The postnational constellation: Political essays. Cambridge, Mass.: MIT Press.
Hale T.N. 2008. Transparency, accountability and global governance. Global Governance, 14: 7394.
Hassel A. 2008. The evolution of a global labor governance regime. Governance, 21(2): 231–15.
Haufler V. 2003a. Globalization and industry self-regulation. In Kahler M., & Lake D.A. (Eds.), Governance in a global economy: Political authority in transition: 226–52. Oxford: Oxford University Press.
Haufler V. 2003b. New forms of governance: Certification regimes as social regulations of the global market. In Meidinger E., Elliott C., & Oesten G. (Eds.), Social and political dimensions of forest certification: 237–17. Remagen-Oberwinter: Forst-buch.
Held D., & McGrew A. (Eds.). 2002. Governing globalization. Cambridge: Polity Press.
Henderson J., Dicken P., Hess M., Coe N., & Yeung H.W.-C. 2002. Global production networks and the analysis of economic development. Review of International Political Economy, 9: 436–64.
Hess D. 2007. Social reporting and new governance regulation: The prospects of achieving corporate accountability through transparency. Business Ethics Quarterly, 17: 453–76.
Hiss S. 2009. From implicit to explicit corporate social responsibility: Institutional change as a fight for myths. Business Ethics Quarterly, 19: 433–51.
Hsieh N.-H. 2009. Does global business have a responsibility to promote just institutions? Business Ethics Quarterly, 19: 251–73.
Husted B.W., & Allen D.B. 2006. Corporate social responsibility in the multinational enterprise: Strategic and institutional approaches. Journal of International Business Studies, 37: 838–49.
Janis I.L., & Fadner R. 1965. The coefficient of imbalance. In Lasswell H., Leites N., & Associates (Eds.), Language of politics: Studies in quantitative semantics: 15369. Cambridge, Mass.: MIT Press.
Kerwer D. 2005. Rules that many use: Standards and global regulation. Governance, 18: 611–32.
Kingsbury B. 1999 Sovereignty and inequality. In Hurrell A., & Woods N. (Eds.), Inequality, globalization, and world politics: 6694. Oxford: Oxford University Press.
Kirton J.J., & Trebilcock M.J. 2004. Hard choices, soft law: Voluntary standards in global trade, environment and social governance. Aldershot: Ashgate.
Kitschelt H.P. 1986. Political opportunity structures and political protest: Anti-nuclear movements in four democracies. British Journal of Political Science, 16: 5785.
Kobrin S.J. 2008 Globalization, transnational corporations and the future of global governance. In Scherer A.G., & Palazzo G. (Eds.), Handbook of research on global corporate citizenship: 249–72. Cheltenham: Edward Elgar.
Kobrin S.J. 2009. Private political authority and public responsibility: Transnational politics, transnational firms and human rights. Business Ethics Quarterly, 19: 349–74.
Koenig-Archibugi M. 2004. Transnational corporations and public accountability. Government and Opposition, 39: 234–59.
Kolk A., & Pinkse J. 2008. A perspective on multinational entreprises and climate change: Learning from “An inconvenient truth”?. Journal of International Business Studies, 39: 1359–78.
Kwok C.C.Y., & Tadesse S. 2006. The MNC as an agent of change for host-country institutions: FDI and corruption. Journal of International Business Studies, 37: 767–85.
Labour Rights in China 1999. No illusions: Against the global cosmetic SA8000. http://, first accessed December 2009.
Laufer W.S. 2003. Social accountability and corporate greenwashing. Journal of Business Ethics, 43: 253–61.
Levy D.L. 2008. Political contestation in global production networks. Academy of Management Review, 33: 943–63.
Locke R., Qin F., &Brause A. 2007. Does monitoring improve labor standards? Lessons from Nike. Industrial and Labor Relations Review, 61: 331.
Lövbrand E., Rindefjäll T., & Nordqvist J. 2009. Closing the legitimacy gap in global environmental governance? Lessons from the emerging CDM market. Global Environmental Politics, 9(2: 74100.
Luo Y. 2006. Political behavior, social responsibility, and perceived corruption: A structuration perspective. Journal of International Business Studies, 37: 747–66.
Maignan I., & Ralston D.A. 2002. Corporate social responsibility in Europe and the US: Insights from businesses’ self-presentations. Journal of International Business Studies, 33: 497514.
Marx A. 2008. Limits to non-state market regulation: A qualitative comparative analysis of the international sport footwear industry and the FLA. Regulation & Governance, 2: 253–73.
Mathews J.T. 1997. Power shift. Foreign Affairs, 76(1: 5066.
Matten D., & Crane A. 2005. Corporate citizenship: Towards an extended theoretical conceptualization. Academy of Management Review, 30: 166–79.
Misangyi V.F., Weaver G.R., & Elms H. 2008. Ending corruption: The interplay among institutional logics, resources, and institutional entrepreneurs. Academy of Management Review, 33: 750–70.
Moon J.D. 2003. Rawls and Habermas on public reason: Human rights and global justice. Annual Review of Political Science, 6: 257–74.
Nanz S.P. 2006 Democratic legitimacy and constitutionalisation of transnational trade governance: A view from political theory. In Joerges C., & Petersmann E.-U. (Eds.), Multilevel trade governance, social regulation and the constitutionalization of international trade: 5982. Oxford: Hart Publishing.
Nanz P., & Steffek J. 2004. Global governance, participation and the public sphere. Government and Opposition, 39: 314–35.
O’Rourke D. 2003. Outsourcing regulation: Analyzing nongovernmental systems of labor standards and monitoring. Policy Studies Journal, 31: 129.
O’Rourke D. 2006. Multi-stakeholder regulation: Privatizing or socializing global labor standards? World Development, 34: 899918.
Palazzo G., & Scherer A.G. 2006. Corporate legitimacy as deliberation: A communicative framework. Journal of Business Ethics, 66: 7188.
Palazzo G., & Scherer A.G. 2010 The United Nations Global Compact as a learning approach. In Rasche A., & Kell G. (Eds.), The United Nations Global Compact: Achievements, trends and challenges: 23447. Cambridge: Cambridge University Press.
Pattberg P. 2005. What role for private rule-making in global environmental governance? Analysing the FSC International Environmental Agreements, 5: 175–89.
Pies I., Hielscher S., & Beckmann M. 2009. Moral commitments and the societal role of business: An ordonomic approach to corporate citizenship Business Ethics Quarterly, 19: 375401.
Pieth M. 2007. Multistakeholder initiatives to combat laundering and bribery. In Brütsch C., & Lehmkuhl D. (Eds.), Law and legalization in transnational relations: 81100. London: Routledge.
Raines S.S 2003. Perceptions of legitimacy and efficacy in international environmental management. Global Environmental Politics, 3(3): 4773.
Rainforest Foundation. 2002. Trading in credibility: The myth and reality of the FSC., first accessed May 2009.
Rametsteiner E., & Simula M. 2003. Forest certification: An instrument to promote sustainable forest management?. Journal of Environmental Management, 67: 8798.
Risse T. 2004. Global governance and communicative action. Government and Opposition, 39: 288313.
Risse T. 2007. Transnational governance and legitimacy. In Benz A., & Papadopoulos I. (Eds.), Governance and democracy: Comparing national, European and international experiences 179–99. London: Routledge.
Ronit K., & Schneider V. 1999. Global governance through private organizations. Governance, 12: 243–66.
Rosenau J.N., & Czempiel E.-O. (Eds.). 1992. Governance without government: Order and change in world politics. Cambridge: Cambridge University Press.
Rucht D. 2005. Civil society plus global governance: What can we expect? In Petschow U., Rosenau J., & von Weizsäcker E.-U. (Eds.), Governance and sustainability: New challenges for states, companies and civil society: 219–30. Sheffield: Greenleaf Publishing.
Ruggie J.G. 2007. Business and human rights: Mapping international standards of responsibility and accountability for corporate acts. United Nations: Human Rights Council, Report A/HRC/4/035.
Sandel M. 1982. Liberalism and the limits of justice. Cambridge: Cambridge University Press.
Schäferhoff M., Campe S., & Kaan C. 2009. Transnational public-private partnerships in international relations: Making sense of concepts, research frameworks, and results. International Studies Review, 11: 451–74.
Scharpf F.W. 1997. Economic integration, democracy and the welfare state. Journal of European Public Policy, 4: 1836.
Scharpf F.W. 1999. Governing in Europe: Effective and democratic? Oxford: Oxford University Press.
Scharpf F.W. 2009. Legitimacy in the multilevel European polity. European Political Science Review, 1(2): 173204.
Schepers D.H. 2010. Challenges to legitimacy at the Forest Stewardship Council. Journal of Business Ethics, 92: 279–90.
Scherer A.G., & Palazzo G. 2007. Toward a political conception of corporate responsibility: Business and society seen from a Habermasian perspective. Academy of Management Review, 32: 10961120.
Scherer A.G., & Palazzo G. 2008. Globalization and corporate social responsibility. In Crane A., Mc-Williams A., Matten D., Moon J., & Siegel D.S. (Eds.), The Oxford handbook of corporate social responsibility: 413–31. Oxford: Oxford University Press.
Scherer A.G., & Palazzo G. 2011. The new political role of business in a globalized world: A review of a new perspective on CSR and its implications for the firm, governance, and democracy. Journal of Management Studies, 48: 899931.
Scherer A.G., Palazzo G. & Baumann D. 2006. Global rules and private actors: Toward a new role of the TNC in global governance. Business Ethics Quarterly, 16: 505–32.
Scholte J.A. 2005. Globalization: A critical introduction Houndmills: Palgrave.
Sethi S.P. 2003. Setting global standards: Guidelines for creating codes of conduct in multinational corporations Hoboken: John Wiley & Sons.
Spar D.L., & La Mure L.T. 2003. The power of activism: Assessing the impact of NGOs on global business. California Management Review, 45(3): 78101.
Taylor C. 1989. Sources of the self: The making of the modern identity Cambridge, Mass.: Harvard University Press.
Teegen H., Doh J.P., & Vachani S. 2004. The importance of nongovernmental organizations (NGOs) in global governance and value creation: An international business research agenda. Journal of International Business Studies, 35: 463–83.
Thérien J.-P., & Pouliot V. 2006. The global compact: Shifting the politics of international development? Global Governance, 12: 5575.
United Nations. 1997. UN conference on environment and development (1992). http://, first accessed April 2010.
Utting P. 2002. Regulating business via multi-stakeholders initiatives: A preliminary assessment. Geneva: UNRISD.
van Tulder R., & Kolk A. 2001. Multinationality and corporate ethics: Codes of conduct in the sporting goods industry. Journal of International Business Studies, 32: 267–83.
Visseren-Hamakers I.J., & Glasbergen P. 2007. Partnerships in forest governance. Global Environmental Politics, 17(3–4): 408–19.
Vogel D. 2007. Private global business regulation. Annual Review of Political Science, 11: 261–82.
Vogel D. 2010. The private regulation of global corporate conduct. Business-Society, 49(1): 6887.
Waddell S. 2003. Global action networks: A global invention helping business make globalisation work for all. Journal of Corporate Citizenship, 12: 2742.
Waddell S., & Khagram S. 2007. Multi-stakeholder global networks: Emerging systems or the global common good. In Glasbergen P., Biermann F., & Mol A.P.J. (Eds.), Partnerships, governance and sustainable development: Reflections on theory and practice: 261–87. Cheltenham: Edward Elgar.
Waddock S. 2008. Building a new institutional infrastructure for corporate responsibility. Academy of Management Perspectives, 22(3): 87108.
Water Aid & Tearfund 2005. An empty glass: The EU Water Initiative’s contribution to the water and sanitation millennium targets. an_empty_glass.pdf, irst accessed May 2009.
Witte J.M., Benner T., & Streck C. 2005. Partnerships and networks in global environmental governance: Moving to the next stage. In Petschow U., Rosenau J., & von Weizsäcker E.-U. (Eds.), Governance and sustainability: New challenges for states, companies and civil society: 141–51. Sheffield: Greenleaf Publishing.
Young I.M. 2000. Inclusion and democracy Oxford: Oxford University Press.
Young I.M. 2006. Responsibility and global justice: A social connection model. Social Philosophy-Policy, 23(1): 102–30.
Zadek S. 2004. The path to corporate responsibility. Harvard Business Review, 82: 125–32.
Zürn M. 2004. Global governance and legitimacy problems. Government and Opposition, 39: 260.
Recommend this journal

Email your librarian or administrator to recommend adding this journal to your organisation's collection.

Business Ethics Quarterly
  • ISSN: 1052-150X
  • EISSN: 2153-3326
  • URL: /core/journals/business-ethics-quarterly
Please enter your name
Please enter a valid email address
Who would you like to send this to? *



Altmetric attention score

Full text views

Total number of HTML views: 1
Total number of PDF views: 412 *
Loading metrics...

Abstract views

Total abstract views: 1024 *
Loading metrics...

* Views captured on Cambridge Core between September 2016 - 11th December 2017. This data will be updated every 24 hours.