Building State Capability Podcast

Episode 3: Overcoming the Global Despondency Trap: Strengthening Corporate Accountability in Supply Chains

Episode Summary

Why do global collective action problems persist, and how do we overcome them? Drawing on 140 interviews with campaigners, politicians, and businesses in 10 European countries, Dr. Alice Evans' research suggests that many activists are stuck in a despondency trap. Never seeing radical reform, they lower their ambitions, and invest in more feasible but sub-optimal alternatives. This creates a negative feedback loop, in which the dearth of radical reform becomes self-fulfilling. But if reformists see advances at home and abroad, they may become more optimistic about collective mobilisation and break out of their despondency trap. In this podcast, Salimah Samji, Director of Building State Capability, interviews Dr. Alice Evans about her latest work on overcoming global despondency traps. This paper is published in the Review of International Political Economy https://www.tandfonline.com/doi/abs/10.1080/09692290.2019.1679220

Episode Transcription

Episode 3: Overcoming the Global Despondency Trap: Strengthening Corporate Accountability in Supply Chains

 

[00:00:04] Hello and welcome to Building State Capability at Harvard University's podcast series. Why do global collective action problems persist and how do we overcome them? Drawing on 140 interviews with campaigners, politicians and businesses in 10 European countries? Dr Alice Evans research suggests that many activists are stuck in a despondency trap, never seeing radical reform. They lower their ambitions and invest in more feasible but suboptimal alternatives. This creates a negative feedback loop in which the dearth of radical reform becomes self-fulfilling. But if reformers see advances at home and abroad, they may become more optimistic about collective mobilisation and break out of their despondency trap. In this podcast, Salimah Samji, director of Building State Capability, interviews BSC associate Dr Alice Evans about her latest work on overcoming global despondency traps. 

 

Salimah [00:00:57] Welcome, Alice, to the BFC podcast series. We're really delighted to have you this week. 

 

Alice [00:01:02] It's a thrill. 

 

Salimah [00:01:04] You know, you are one of my favorite podcast people. So I wanted to actually talk about this new paper that you have out on the despondency trap. Where did you get this idea of like this despondency trap? 

 

Alice [00:01:17] Well, I think we see it all around. So the idea is that if we never see radical reform, we may lower our ambitions. We don't believe it's possible. We don't really contemplate it instead of pushing for really radical reform. We sort of reinforce the status quo. You know, we reluctantly comply. We take it for granted. We don't think we can change things. And so the status quo persists. We get stuck in this despondency trap because never seeing radical reform, we don't push for it, nothing changes. So other people don't observe radical change. So this is a huge global collective action problem, whether we're talking about tax competition or environmental action or corporate accountability. But we can get stuck in this bad equilibrium of weak legislation, etcetera. So how do we get out of it? Now in France and right across Europe, we have this wave of legislation and activism of social movements pushing for this tough, tough legislation which makes companies liable for environmental degradation and abuses in their supply chains. And I'm like, one, why is this happening now? Why do we see this outbreak of legislation and campaigns right across Europe? And just yesterday, the EU commissioner announced that they want to push for this in the cocoa supply chains. So why is this happening? And why was France the first to do this? So I was excited and I was intrigued. So the France is the first country in the world to have this groundbreaking law, which is the duty of vigilance law, which again says that companies must identify and reduce risks of harms in their global supply chains. So not just their own subsidiaries, but anyone they are buying from. And if they don't do this and abuse happens, they can be taken to court. So the idea of this legislation is that it would incentivize companies to pay more attention to environmental abuses because the status quo at the moment is corporate impunity. So Glencore can pollute in a river in the Congo and nothing happens. It cannot be taken to court. But it just as, oh, that was our subsidiary. That was another company but they're profiting from this environmental degradation or they're profiting from the deforestation of the Amazon, etc.. So what explains this law in France now? I think a lot of people, when they're studying social movements or they're studying successful campaigns, they might say, well, what were the tactics? What were the strategies? What was it that they did that was so successful? How did they organize? How did they mobilize? 

 

[00:03:30] And for me, that's begging your question, because in France, they relentlessly mobilized civil society and politicians for five years, notwithstanding huge business opposition. So my question is, well, what motivated them? What gave them hope for reform? Right. This point about collective efficacy is really important. So we can look at social psychology and waves of protest that people are much more likely to mobilize if they believe they can win. Right. So you can give people information about climate breakdown, but if they don't think they could do anything about it, they're not going to go into the streets only when they believe that, yes, we can do it. Do they really invest. So what we've got to do as social scientists is explain what gives people the hope in order to mobilize. Well, what I decided to do is a comparative analysis of 10 European countries. So I did qualitative research with businesses, trade unions, activists, 148 interviews right across Europe, trying to understand. Well, what was different about France. What gave them hope for reform? What was it about the structure or the window of opportunity in France that meant that they kept on mobilizing? So that was my key question. And then how did they overcome the despondency trap. 

 

Salimah [00:04:40] And what did you find? 

 

Alice [00:04:41] Well, I think there are maybe five things going on. So one is we're seeing this growth of international legislation, for example, at the U.N., various agreements that there's broad agreement that businesses should do due diligence. These are all voluntary processes in the OECD guidelines for businesses. And what these French activists did, they said, OK, so there's this broad agreement that signals sort of international consensus. And this has been developed through sort of participatory consultative forum that everyone goes along with because it's all voluntary. So, you know, why not? But they took that international norm and they said, right, let's turn it into national legislation. They'd use the legitimacy of that to draft a bill. So 2012, there was sort of plodding on, you know, sort of under the radar of it and get much political attention. Didn't get any media attention. But then Rana Plaza hit a thousand workers dead in a horrific collapse of a garment factory. Front page horror story. I mean, even the center right newspapers in France, even the Catholic newspapers were saying, you know, this is multi-nationals going, wild, this is globalization out of control. And that pushed it right into the limelight. That triggered all sorts of debates in the national assembly. So there's public outrage. But I know what you'll say, silly me. Well, Rana Plaza was an issue across the world. That doesn't explain why France in particular. 

 

Salimah [00:05:55] Yeah why France? 

 

Alice [00:05:55] Exactly. What we need to understand there was the political culture in France and people's preexisting ideologies and how that shaped how they interpreted Rana Plaza. So when I analyzed media reporting in France and Switzerland, in the UK and Germany, I see a huge difference in France, you know, in the UK and Switzerland, Germany, it's very much, oh, Bangladesh, there's so much labor repression. The government is very bad in France, where 77 per percent of people are critical of globalization, where there already is that skepticism of the "dumping sociale", where there is already that animosity to multinationals. Of course you blame multinationals, right? It fits with your preexisting ideologies. And moreover, campaigners knew that there was antipathy to globalisation because we've already had huge protests about globalisation in France. So one is about the political culture of resistance to multinationals. So that predisposes people to have a particular slant to interpret this event. 

 

Salimah [00:06:49] And so it was a great story that they could use for their already existing ideology. 

 

Alice [00:06:53] Exactly. Second aspect is that in France, uniquely, you have this history of state intervention. So the state being seen as the guardian of the Commonwealth, whereas maybe the UK, Scandinavia, the Netherlands, it's much more of a sort of co-operative model of unions and business and government working together in multi-stakeholder initiatives that pull the model in the Netherlands, simply co-operative politics in Germany, whereas in France it's very much the state should intervene, the state should regulate from Rousseau, etc. The state should intervene. 

 

[00:07:20] So if you've got a crisis, you look to the state to intervene. So those are two aspects of political culture which shaped and then the fourth really important matches. The France was one of the few countries in Europe where you happen to have a Center-Left government. So you happen to have the crucial number of deputies in the National Assembly in order to push that through. So seeing this conjunction. the growth of international support, the public outrage, the political culture in France. This window of opportunity of five years. Then the activists mobilized. They could protest, they could organize, they could liaise with the politicians. They developed this big coalition. You know, its partly about activism, partly about structural conditions, partly about luck. So, for example, the minister would not meet with civil society at all. And that was Macron. What changed was when Macron happened to go and work on his presidential campaign and he was replaced by someone else who is much more sympathetic and he pushed the law through. So France had this unique alignment of the stars, you know, because it's very idiosyncratic political culture. I happened to have a left wing government all about luck and idiosyncratic circumstances. And we can say France was weird, right? But then once France has this legislation that emboldens activists elsewhere, they see that legislation is possible. That right. Right. Now, let's go for it, because we also have this huge campaign in Switzerland and again in Switzerland. They have this unique window of opportunity due to the idiosyncratic features, the referendum, knowing that they could put an issue on the referendum. They mobilize and organize this huge campaign. Once France and Switzerland are in play. Then after that happened. Now, just this month in Germany, we have this campaign of 80 organizations now in Finland. There's also been this huge campaign. The campaign in Finland is especially interesting because they've actually got businesses to support this legislative work. So let me tell you about pineapple juice in Finland. So a couple of years ago, there was this huge scandal in that two major supermarkets, their own brand, pineapple juice, was associated with labor abuses in Southeast Asia. 

 

[00:09:15] And that was a front page horror story. Public outrage at the idea of Scandinavians are so ethical and it's really hard. Their national called that their own brand. Yeah, right. So I was front page media story. Then those businesses invested in improving their supply chains. And once they'd made those huge capital investments, they were much more supportive of legislation for two reasons. One, to get a level playing field so the other businesses can undercut them. More importantly, that if you have 10 or 20 thousand suppliers that difficult to regulate, if the state regulates instead, that sort of takes away some of the monitoring costs. So they saw that as very beneficial. So in Finland, you had businesses coming out in support of legislation. The campaign was really powerful in Finland because they really they were just very media savvy in terms of social norms. What they did is they created the myth that everyone else was on board. So they took a seven metre placard, a billboard in the square in Helsinki, and they had the big trade unions on the square supporting it. They had the big three big businesses said that they support it. Right. Their image projected they really created this image through the media that everyone is on board. So they're not so much saying this law is good, we must have it. But they really showed that everyone else was on board. And they publicized any kind of political support - then, they got lucky. Green left government, came into power and has announced that they're going to legislate. And I'm going there next month to support that ongoing process, so what we've seen is this this wild fire of activism. And the more that you have activism in different European countries, for example, now there's the Dutch law on child labor due diligence. Now the EU wants to create a level playing field rather than having this patchwork quilt of different kinds of legislation. 

 

[00:10:53] So that is how you overcome the global despondency trap, you have one or two weird countries with these idiosyncratic circumstances, and then that catalyzes a wildfire and I'm going to give another parallel, which is transnational bribery. Transnational bribery, again, something very, very hard to legislate. So the idea is a company bribing a civil servant elsewhere in the world in order to get a business done. Right. No government would want to legislate against that, because it is harming in your own domestic companies. So why would you do it? Well, the USA did it in 1977 with the Foreign Corrupt Practices Act. So you had Watergate, huge scandal about corruption, not just domestic, but also transnational. Then you have the lucky conjunction of a Center-Left government and Jimmy Carter. Right. So we have public outrage and a centre left government idiosyncratic circumstances, alignment of the stars. Boom: they legislate. Now under Reagan, businesses try to weaken the legislation. And they did a little by 1990s, they realized that this day. So U.S. businesses push for change in tack. What they wanted instead was a level playing field. Let's prosecute French and German companies so they push for the OECD Anti-bribery Convention to creates a level playing field. They tried to prosecute foreign companies under the US law. So what we see is through the OECD, we see this emergence of the expectation that transnational bribery is bad. Then in the UK, there was a public outrage. There was this cash-for-arms scandal with bribing Saudi officials in order to get a deal. Public outrage conjunction with a Center-Left government, under the Blair administration, and then we got the UK anti-bribery act. And once these two countries had legislated, then it becomes much more expected. And secondly, countries are much less worried about international competition. So now we see even center right governments doing it in Australia, doing it to Germany, doing it in France, et cetera. So that's how you overcome the despondency trap. You get a few weird countries, you publicize it. That's the crucial point. You have to create this impression that everyone else is changing because that emboldens people and lessens concerns about international competitiveness. 

 

Salimah [00:13:00] That's very exciting. I've been surprised to see that in both the stories that you've told, the center left government is something that has played a part. There is obviously luck. There's also a public outcry. Do you have any thoughts on why that's the case or do you have any examples where it's a right government? 

 

Alice [00:13:20] Okay, so that's a great question. I think that both in the US, the UK, the right wing governments tend to be more supportive of business. Yes, they might be concerned, too. Exactly. And certainly in all the countries that I've looked at where there is a center right, government activists have been much more despondent. They felt, well, it's never going to happen here, but that kind of despondency can be dangerous because it can lead NGOs to underestimate their capacities. So, for example, in the UK, there was a discussion a little while ago about having a modern slavery act, but this was a bit championed by Theresa May. And this legislation, in my opinion, is one of the worse laws in the world. It merely requires companies to upload a statement saying we are looking into forced labor in our supply chain. They don't actually have to change anything. There's no liability for actual forced labor, so there's no incentive to change. And I've interviewed lawyers who've written statements. They said, right. But that has nothing to do with procurement. They don't change their procurement practices. So you just have to upload a short statement. It does nothing. But NGO had very low expectations about what they could do. So in order to show that they'd achieved something, in order to say to their supporters and stakeholders, listen, we've done something. They came on board and they praised this law. And so they legitimized it. Right. So it enables Theresa May to portray herself as tackling modern slavery. And, you know, the everyday person on the street. Here's where modern slavery. Wow, that sounds great. So there's a real danger, I think, even with right wing governments or Center-Right governments of underestimating what NGOs can do. 

 

Salimah [00:14:57] For those who feel whether their government is a right wing government or there isn't enough public outcry. Are there small things that they can do? It's very hard when you're in the state of being despondent and thinking it's just not possible. And it just makes me angry. I can't do anything about it. What can they do? 

 

Alice [00:15:17] And so I often get asked, what can we do as consumers, for example, which shop should I go to? And I have zero confidence in that. I think it's very difficult to know which shops are more ethical than others, which brands are more ethical than others. And I think that individual action in terms of our consumption in global supply chains is not the effective way to go forward. I think the best thing we can do is mobilize as citizens for legislation, for example, on environmental degradation. I think the laws getting the structures right, getting the institutions right is key. But as you say, people are despondent. They don't believe they can change. So that's why we have this collective action problem. But if everyone is despondent. We reduce our chances of change into a lower equilibrium. Yes, exactly. So it's about trying to create that positive feedback loop. But we get there by publicizing and highlighting credible reasons for hope, showing that across Europe they are making these huge strides. And that's how we tackle people's despondency. Because it is only through mass citizen action that we can change the structures. I think the danger would be to think the big stuff is impossible. So let me focus on the small things. Even if we know they're suboptimal, I say no: the big things are what we need to focus on. And let's go for that hell for leather. 

 

Salimah [00:16:32] Great. Thank you very much, Alice. It's always a pleasure. 

 

Alice [00:16:35] Thank you so much, Salimah. 

 

[00:16:38] To learn more about building state capability, visit bsc.cid.harvard.edu.  Thank you for listening.