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Multi-Stakeholder Governance for Effectively Sharing Social Responsibility (Social Contracts, Deliberative Democracy and Endogenous Conformity)

Lorenzo Sacconi

University of Trento - Department of Economics and Management

March 1, 2011

EconomEtica Working Papers, No. 27, March 2011

Shared social responsibility (SSR) reqiures the definition of a unified methodology of multi-stakeholder governance making effective the idea of ‘sharing’ responsibilities. At minimum in fact, shared social responsibility is a matter of allocating responsibility among a number of public, private, individual or organized subjects in relation to social welfare principles and goals that may be shared, and implemented on regional and local level. Such subjects differ in nature, and their competence and powers have different magnitudes. Allocating responsibilities, establishing rules for their fulfillment, and enabling cooperation and coordination among such subjects are typical purposes of a multi-stakeholder governance mechanism. Hence the main questions that this paper addresses are: what governance mechanisms and methodology, can make the idea of shared social responsibility effective? And what different specifications of the overall model of governance are required in order to account for different configurations of stakeholders, along with their relative power, knowledge and degree of mutual dependence?

These questions are addressed by developing the basic concepts for an SSR governance methodology. After having worked out a definition of SSR as a multi-stakeholder governance model on territorial level based on the analogy with a previous definition of corporate social responsibility (Sacconi 2006a,b) and its identification with an endogenously stable social institution (Aoki 2001), the social contract approach to SSR is put forward. Two aspects of the social contract model are suggested: (i) the idea of a ‘local social contracts,’ that renders affordable to account for local governance structures in terms of the social contract model (Donaldson and Dunfee 1995, 1999); and (ii) the game theoretical reformulation of the Rawlsian maximin principle that uniquely specifies the egalitarian terms of the social contract among stakeholders and understands it not only as satisfaction of a moral requirement but also of a stability requirement to be met when an ‘original position’ perspective is adopted (Binmore 2005). Thereafter, the design of the governance methodology that can implement these ideal models of fair bargaining will be introduced. A key role is played by the idea of deliberative democracy (Gutman and Thompson 1996, 2005) as the deliberative procedure, constrained by a set of formal and substantial impartiality conditions, to be implemented within SSR governance models. Deliberative democracy makes it possible to constrain governance mechanisms with procedural principles that allow for real life bargaining among stakeholders in order to approximate the model of fair ‘local social contracts.’ The implementation of policies through SSR are then discussed by analyzing the conditions for the emergence of endogenous motivations and incentives that allow considering SSR as a self-sustaining norm of behaviour. The basic motivational mechanisms considered are reputation effects (Kreps 1990) and the preference for reciprocal conformity with a fair norm or ‘the sense of justice’ (see Rawls 1971, Grimalda and Sacconi 2005, Sacconi and Faillo 2010). Finally, these endogenous motivations are studied with reference to specific interaction structures (games) among different stakeholders and hence particular governance models: the concentric model exemplified by CSR, the egalitarian community model of commons' governence, and the network of heterogeneous stakeholders.

Number of Pages in PDF File: 43

Keywords: Stakeholders, Social Contract, Cohesion, Deliberation, Recirpocity, CSR, Commons

JEL Classification: C78, D62, D63, D64, D72, H12, I31,L33, M14

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Date posted: March 6, 2011  

Suggested Citation

Sacconi, Lorenzo, Multi-Stakeholder Governance for Effectively Sharing Social Responsibility (Social Contracts, Deliberative Democracy and Endogenous Conformity) (March 1, 2011). EconomEtica Working Papers, No. 27, March 2011. Available at SSRN: https://ssrn.com/abstract=1778185 or http://dx.doi.org/10.2139/ssrn.1778185

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Lorenzo Sacconi (Contact Author)
University of Trento - Department of Economics and Management ( email )
via Inama 5
I-38100 Trento
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