The Multinational Corporation as 'The Good Despot': The Democratic Costs of Privatization in Global Settings

27 Pages Posted: 23 Apr 2013 Last revised: 21 Aug 2015

See all articles by Doreen Lustig

Doreen Lustig

Tel Aviv University - Buchmann Faculty of Law

Eyal Benvenisti

University of Cambridge - Lauterpacht Centre for International Law

Date Written: April 15, 2013

Abstract

In 1861 John Stuart Mill published Considerations on Representative Government to discuss the justifications of democracy. The third chapter of this book explores why a government run by a good despot is unacceptable. In this Article we revisit Mill's critique of the good despot to problematize the contemporary exercise of authority and influence by multinational companies especially in foreign countries. Inspired by Mill, we redefine the problem of privatization. The challenges of privatization are mostly defined by essentialist concerns (whether certain governmental functions must remain the province of public authorities) or a consequentialist critique on the problematic outcomes of privatization (how it influences human rights or causes environmental damage). In this Article we shift the attention to the democracy losses associated with the privatized decision-making process. We identify the growing influence of private, particularly foreign actors, as a democratic problem of exclusion of persons from decision-making processes on issues with constitutive influence on their lives, and explore the different aspects of what we regard as an acute problem of democratic deficit. The redefining of the problem as one of process and democratic deficit allows us to conclude with a critical assessment of the potentials and limitations of contemporary attempts to solve it.

Keywords: Privatization, Multinational Corporations, J.S. Mill, Globalization

JEL Classification: K31, K32, K33

Suggested Citation

Lustig, Doreen and Benvenisti, Eyal, The Multinational Corporation as 'The Good Despot': The Democratic Costs of Privatization in Global Settings (April 15, 2013). Available at SSRN: https://ssrn.com/abstract=2251439 or http://dx.doi.org/10.2139/ssrn.2251439

Doreen Lustig

Tel Aviv University - Buchmann Faculty of Law ( email )

Ramat Aviv
Tel Aviv 69978, IL
Israel

Eyal Benvenisti (Contact Author)

University of Cambridge - Lauterpacht Centre for International Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

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