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Democracy in a Pluralist Global Order: Corporate Power and Stakeholder Representation

Published online by Cambridge University Press:  25 March 2011


Whereas representative democratic mechanisms have generally been built around preexisting institutional structures of sovereign states, the global political domain lacks any firmly constitutionalized or sovereign structures that could constitute an analogous institutional backbone within a democratic global order. Instead, global public power can best be characterized as “pluralist” in structure. Some recent commentators have argued that if global democratization is to succeed at all, it must proceed along a trajectory beginning with the construction of global sovereign institutions and culminating in the establishment of representative institutions to control them. This paper challenges this view of the preconditions for global democratization, arguing that democratization can indeed proceed at a global level in the absence of sovereign structures of public power. In order to gain firmer traction on these questions, analysis focuses on the prospects for democratic control of corporate power, as constituted and exercised in one particular institutional context: sectoral supply chain systems of production and trade. It is argued that global democratization cannot be straightforwardly achieved simply by replicating familiar representative democratic institutions (based on constitutional separations of powers and electoral control) on a global scale. Rather, it is necessary to explore alternative institutional means for establishing representative democratic institutions at the global level within the present pluralist structure of global power.

Symposium on Global Democracy
Copyright © Carnegie Council for Ethics in International Affairs 2010

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1 Terry Macdonald, Global Stakeholder Democracy: Power and Representation Beyond Liberal States (New York: Oxford University Press, 2008); Terry Macdonald and Kate Macdonald, “Non-Electoral Accountability in Global Politics: Strengthening Democratic Control within the Global Garment Industry,” European Journal of International Law 17, no. 1 (2006), pp. 89–119; Philip Cerny, “Plurality, Pluralism, and Power: Elements of Pluralist Analysis in an Age of Globalization” in Rainer Eisfeld, ed., Pluralism: Developments in the Theory and Practice of Democracy (Opladen and Farmington Hills: Barbara Budrich Publishers, on behalf of the International Political Science Association, Research Committee No. 16 [Socio-Political Pluralism], 2006), pp. 81–110;and Philip Cerny, “Globalization and the Erosion of Democracy,” European Journal of Political Research 35, no. 5 (1999), pp. 1–36.

2 Thomas Nagel, “The Problem of Global Justice,” Philosophy & Public Affairs 33, no. 2 (2005), pp. 113–47.

3 Ibid.

4 These cases are discussed in more detail in Kate Macdonald, “Public Accountability within Transnational Supply Chains: A Global Agenda for Empowering Southern Workers?” in Alnoor Ebrahim and Edward Weisband, eds., Global Accountabilities: Participation, Pluralism and Public Ethics (Cambridge: Cambridge University Press, 2007), pp. 252–279; and Kate Macdonald, “Globalising Justice within Coffee Supply Chains? Fair Trade, Starbucks and the Transformation of Supply Chain Governance,” in “Beyond Corporate Social Responsibility? Business, Poverty and Social Justice,” special issue, Third World Quarterly 28, no. 4 (2007), pp. 793–812.

5 We have tackled related problems associated with the democratization of other categories of global actors elsewhere—notably in an analysis of strategies for democratizing the power of NGOs. See Macdonald, Global Stakeholder Democracy.

6 David Held, Democracy and the Global Order: From the Modern State to Cosmopolitan Governance (Cambridge: Polity Press, 1995); and Macdonald, Global Stakeholder Democracy.

7 For further discussion, see Macdonald, Global Stakeholder Democracy, pp. 37–39. A closely related set of issues is discussed by David Held in his “Democratic Accountability and Political Effectiveness from a Cosmopolitan Perspective,” Government and Opposition 39, no. 2 (2004), pp. 364–91.

8 See, e.g., Susan Strange, “The Declining Authority of States,” in David Held and Anthony McGrew, eds., The Global Transformations Reader: An Introduction to the Globalization Debate (Cambridge: Polity Press, 2000) pp. 148–55; Held, Democracy and the Global Order; A. Claire Cutler, Virginia Haufler, and Tony Porter, eds., Private Authority and International Affairs (Albany: State University of New York Press, 1999); A. Claire Cutler, Private Power and Global Authority: Transnational Merchant Law in the Global Political Economy (Cambridge: Cambridge University Press, 2003); and Rodney Bruce Hall and Thomas J. Biersteker, The Emergence of Private Authority in Global Governance (Cambridge: Cambridge University Press, 2002).

9 A plausible case could be made for identifying a wider community of stakeholders for state governments than the territorial population subject directly to its laws, but it is beyond the scope of the present discussion to defend any specified account of the legitimate democratic stakeholders of states.

10 Macdonald, Global Stakeholder Democracy.

11 Gary Gereffi, “A Commodity Chains Framework for Analyzing Global Industries” (mimeo, Department of Sociology, Duke University, 1999); and Gary Gereffi, John Humphrey, and Timothy Sturgeon, “The Governance of Global Value Chains,” Review of International Political Economy 12, no. 1 (2005), pp. 78–104.

12 Macdonald, “Globalising Justice within Coffee Supply Chains?”

13 Ibid.

14 Macdonald, “Public Accountability within Transnational Supply Chains.”

15 Macdonald and Macdonald, “Non-Electoral Accountability in Global Politics”; and Macdonald, Global Stakeholder Democracy.

16 It is common for the concept of authorization to be sharply separated from that of accountability, on the basis of an assumption that the former involves forms of control exercised prior to the execution of a particular decision, while the latter involves forms of control exercised subsequent to the decision. However, if we conceptualize the distribution and exercise of power as a dynamic ongoing process, the distinction between prospective and retrospective forms of control is unnecessary. In the present analysis, we therefore conceptualize processes of democratic representation as relating to ongoing processes and relationships of control, embracing dimensions of both authorization and accountability within a single set of institutional mechanisms.

17 We recognize that this claim marks a radical departure from the long historical association between democracy and universal suffrage and electoral accountability, but we cannot offer a full theoretical defense of this claim within the constraints of this article. A more developed defense is provided in Macdonald, Global Stakeholder Democracy, chap. 7.

18 Macdonald and Macdonald, “Non-Electoral Accountability in Global Politics.”

19 Such disclosure must also be at accessible cost, in terms of the time, money, education and expertise, technology, mobility, and so forth required to access information about public decision-making. Additionally, reason-giving can be regarded as an element of such transparency, helping to ensure that the decision-making process (as distinct from its final outcomes) is open to scrutiny by relevant stakeholders.

20 Debora Spar and Jennifer Burns, Hitting the Wall: Nike and International Labor Practices, Case Study, (Cambridge: Harvard Business School, 2000).

21 IRENE, “Controlling Corporate Wrongs: The Liability of Multinational Corporations; Legal Possibilities, Initiatives and Strategies for Civil Society,” Law, Social Justice and Global Development 1 (2000), http:\\ (accessed December 2009). Even more specifically, it was claimed that “sweatshops are the result of corporate abuse, greed, excessive power and the lack of accountability.” National Labor Committee, No More Sweatshops: Campaign for the Abolition of Sweatshops and Child Labor, http:\\ (accessed November 2004).

22 Macdonald, “Public Accountability within Transnational Supply Chains”; and Macdonald, “Globalising Justice within Coffee Supply Chains?”

23 For instance, in the case of Nicaraguan factory disputes, there have been very pronounced conflicts between the two opposing union confederations and between the unions and the influential women's organization Maria Elena Cuadra. See Macdonald, “Public Accountability within Transnational Supply Chains.”

24 See, e.g., Frente Solidario, Informandose: Un servicio informativo quincenal, dirigido a afiliadas, organizaciones de pequenos caficultores, organismos cooperantes y solidarios, various editions (2003–2004); and Asociacion de Trabajadores del Campo, El Machete: A Levantar la Esperanza, Newsletter, various editions (2002–2005).

25 Stephanie Barrientos and Sally Smith, “Do Workers Benefit from Ethical Trade? Assessing Codes of Labour Practice in Global Production Systems,” in “Beyond Corporate Social Responsibility? Business, Poverty and Social Justice,” special issue, Third World Quarterly 28, no. 4 (2007), pp. 713–29; Rhys Jenkins, Corporate Codes of Conduct: Self-Regulation in a Global Economy (April 2001), United Nations Research Institute for Social Development (NRISD), http:\\ (accessed December 2009); and Macdonald, “Public Accountability within Transnational Supply Chains.”

26 Macdonald, “Public Accountability within Transnational Supply Chains”; and Macdonald, “Globalising Justice within Coffee Supply Chains?”

27 Jenkins, Corporate Codes of Conduct.

28 Virginia Haufler, A Public Role for the Private Sector: Industry Self-Regulation in a Global Economy (Washington, D.C.: Carnegie Endowment for International Peace, 2001); Jenkins, Corporate Codes of Conduct; and John Gerard Ruggie, “Global_Governance.Net: The Global Compact as Learning Network,” Global Governance 7 (2001), pp. 371–78.

29 Our claim that nonstate actors and institutional mechanisms can contribute importantly to performing regulatory functions traditionally undertaken by the state should not be interpreted as suggesting that such nonstate governance systems can wholly substitute for state institutions in the performance of such functions. An active debate continues regarding how best to reconfigure the relationship between state and nonstate governance mechanisms within a pluralist global order. We make some further brief comments on this changing relationship below. For additional analysis of this issue, see, e.g., David Vogel, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility (Washington, D.C.: Brookings Institution Press, 2005); Ronnie Lipschutz with James K. Rowe, Globalization, Governmentality and Global Politics: Regulation for the Rest of Us (Abingdon, UK: Routledge, 2005); Haufler, A Public Role for the Private Sector; and Kate Macdonald and Shelley Marshall, eds., Fair Trade, Corporate Accountability and Beyond: Experiments in Globalizing Justice (London: Ashgate, 2010).

30 Terry Macdonald, “What's So Special About States? Liberal Legitimacy in a Globalising World,” Political Studies 56, no. 3 (2008), pp.544–65.

31 Such approaches were common in many of the original campaigns against Starbucks in the mid and late 1990s; major campaigning organizations, such as Global Exchange, Organic Consumers, and US/GLEP (later US/LEAP), all adopted broadly this position. US/Guatemala Labor Education Campaign, Justice for Coffee Workers Campaign, US/Guatemala Labor Education Campaign Update, 1996.

32 To a certain extent, such structural dynamics have also undermined harm-based, restrictive accounts of responsibility in the garment industry, particularly in relation to the question of “living wages.”

33 This central point has much in common with arguments elsewhere that advocate the “constitutionalization” (Julia Black, “Constitutionalising Self-Regulation,” Modern Law Review 59, no. 1 [1996], pp. 24–55)or “juridification” (Doreen McBarnet, Aurora Voiculescu, and Tom Campbell, eds., The New Corporate Accountability: Corporate Social Responsibility and the Law [Cambridge: Cambridge University Press, 2007]) of nonstate governance initiatives.

34 Jem Bendell, Barricades and Boardrooms: A Contemporary History of the Corporate Accountability Movement, UNSRID Technology, Business and Society Programme Paper 13 (Geneva: UNRISD, 2004); McBarnet, Voiculescu, and Campbell, eds., The New Corporate Accountability; Robert Horwitz, “Judicial Review of Regulatory Decisions: The Changing Criteria,” Political Science Quarterly 109, no. 1 (1994), pp. 133–69; Karen Orren, “Standing to Sue: Interest Group Conflict in the Federal Courts,” American Political Science Review 70, no. 3 (1976), pp. 723–41.

35 Such legal reforms would need to be adopted by countries in which companies incorporated, or, depending on the legal mechanism, in which they conducted retail operations.

36 See Macdonald, “Public Accountability within Transnational Supply Chains”; and Macdonald, “Globalising Justice within Coffee Supply Chains?”

37 Henry Shue, “Standards of Accountability: Avoiding Simplistic Domestic Analogies” (paper presented at the Normative and Empirical Evaluation of Global Governance Conference, Princeton University, February 17–18, 2006).