Innovations in Governance: A Functional Typology of Private Governance Institutions
22 Duke Environmental Law & Policy Forum 67-144 (2011)
79 Pages Posted: 12 Oct 2010 Last revised: 25 Jan 2013
Date Written: December 3, 2011
Communities are increasingly looking to private governance institutions, rather than formal government, to set public policy and to manage the environmental and social impacts of globalization. Private governance institutions, sets of rules and structures for governing without government, remain undertheorized despite an expanding literature. Questions remain about why they have arisen, what functions they serve, and whether they are effective. This article advances that literature in several ways. First, the article outlines the inherent limitations of the conventional taxonomy, which groups these institutions based on the identity of their constituent organizations (business interests, civil society, and government entities and their hybrid permutations), as a descriptive and analytical tool. Second, the article offers an alternative typology, viewing private governance institutions through an economic lens and sorting the institutions according to their function in overcoming government and market failures. The article identifies the demands for governance that arise at each stage of the regulatory process, the barriers that may keep formal government from meeting that demand and the structures private governance institutions have developed to overcome those barriers. By inquiring into the reasons that there is a demand for governance at each stage of the regulatory process and identifying the structures each institution uses to address those demands, this article turns a spotlight on institutional strengths and weaknesses, suggesting ways private governance institutions (and formal government) may be improved.
Keywords: private governance institutions, common pool resources, tragedy of the commons, anti-commons, regulatory fragmentation, externalities, social costs, best briber, least cost avoider, Rule 4
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