Rethinking the Future of Europe

A Challenge of Governance

Stefan Schepers, A. Kakabadse

• Publisher: Palgrave Macmillan
• Year: 2014
• ISBN:
  9781137024015
• Topic: Business
• Subtopic: Business Strategy
• Index: Business

Rethinking the Future of Europe has brought together three contrasting collections of contributions: the incrementalist perspective concerning the step by step development of Europe, the more radical reform/restructuring approach to the future of Europe, and a view of Europe from the outside.

1

Multi-stakeholder Deliberation for (Global) Justice: An Approach from Modern Civic Republicanism

Ganesh Nathan

This chapter presents the minimal and common conditions for multi-stakeholder deliberation for (global) justice from the perspective of ‘modern civic republicanism’. I derive this model by drawing on some aspects from the work on intercultural justice in Nathan (2010).¹ One reason for considering an approach from modern civic republicanism is that the Western liberal democratic societies embrace a liberal tradition of freedom as non-interference on governance, which is problematic on the need for government intervention for justice. We have recently witnessed many financial crises that have called for government intervention in the form of bailouts and austerity measures which found little support among the population (e.g. austerity measures to tackle the debt crisis in Greece, and the proposal by the Cyprus government for a levy on bank deposits). I intend to show that modern civic republicanism promotes freedom as non-domination, which may allow for non-arbitrary interference through deliberation for justice. Moreover, I shall show that some aspects of classical liberalism, such as state neutrality and the public versus private dichotomy, are challenges to deliberation by stakeholders from both the private and public sector for public interest within a transnational and global context. We face transnational governance gaps on global issues and crises such as poverty, climate change, financial collapse and many others which require multi-stakeholder deliberation for global justice, from both the public and private spheres, within the context of transition from the Westphalian state-centric international order to a post-Westphalian transnational order in which many actors other than states, such as non-governmental organisations (NGOs), international organisations (e.g. World Trade Organization (WTO), International Labour Organization (ILO)) as well as multinational and transnational corporations (TNCs), are becoming significant actors (Nye and Keohane, 1971; Scherer and Smid, 2000; Kobrin, 2008, 2009). Moreover, with the greater prevalence of social media and engagement of stakeholders within globalised society, many non-state actors and citizens around the world are becoming significant in making their voices heard. In this context, it is important to provide just conditions for multi-stakeholder deliberation for justice.

I propose preconditions for the circumstances of justice for deliberation from an alternative political concept of ‘modern civic republicanism’ (Honohan, 2002; Nathan, 2010), which hinges upon freedom as non-domination, within private and public governance for (global) justice, in order to encourage discussion and debate on the feasibility of governance structure as well as to contribute to theoretical advances on innovative approaches to multi-stakeholder global governance. I focus on the input justice on deliberation rather than outcome justice, as I consider input justice to be a precondition for generating outcome justice, although input justice may not guarantee outcome justice – ‘realised justice’.² However, I shall also provide a check for outcome justice that should not destroy the circumstances of input justice.

Multi-stakeholder deliberation, including both public and private actors, shifting from national governance to transnational and global governance for addressing transnational or global issues, is neither a novel concept nor a recent practice, although the related effectiveness and legitimacy concerns are still under scrutiny by academic scholars as well as practitioners. The stakeholder view of the firm (Freeman, 1984, 1994, 1999; Post et al., 2002) along with ‘multi-stakeholder initiatives (MSIs)’ among TNCs and civil society organisations (CSOs) on promoting ‘soft law’ regulation for a variety of global issues (Mena and Palazzo, 2012; Rasche, 2012) have been discussed and practised for more than two decades. For example, responsible care for sustainability of the chemical industry as an MSI was created in 1985, mainly by corporations, but with indirect involvement of governments, NGOs and trade unions (Mena and Palazzo, 2012: 534; King and Lenox, 2000). Moreover, deliberation among various stakeholders on the issues of transnational governance within globalising society is widely discussed within the literature of Corporate Social Responsibility (CSR) and Corporate Citizenship (CC), along with the idea of corporations as political actors (Matten and Crane, 2005; Scherer and Palazzo, 2007; Palazzo and Scherer, 2008a). Matten and Crane (2005) argue on their concept of an ‘extended view of CC’ based on the idea of liberal citizenship within Western democracy. Scherer and Palazzo (2007) propose an approach to deliberation of corporations as political actors based on Habermas’s theory of democracy. Mena and Palazzo (2012) provide MSI input and output legitimacy criteria from the perspective of democratic legitimacy. As I shall briefly discuss within this chapter, the above-mentioned scholarly contributions, notwithstanding some critiques (see critique on the concept of CC: Neron and Norman, 2008; Oosterhout, 2005, 2008; see critique and challenges on conceptualising the corporation as political actor: Wilke and Wilke, 2007; Néron, 2009), advance some descriptive and normative arguments along with the conditions for multi-stakeholder deliberation for addressing governance gaps. However, they do not clearly address the issues of asymmetrical power relations among various stakeholders, along with non-recognition or even misrecognition of their particularities stemming from the political concept of liberal democracy.

In this chapter, first, I shall briefly discuss our problematic social world as constituted by three basic social facts – human diversity, ethical pluralism and interdependency – and argue that within the context of liberal multi-stakeholder deliberation we face problems of asymmetrical power relations and the issues of recognition. I shall also show that, within liberalism, a neat dichotomy of the public and private spheres is problematic for deliberating justice when stakeholders’ activities cut across both spheres and when private institutions have to offer public goods. Second, I shall discuss Habermas’s political deliberative democracy model, which has been advocated by scholars for multi-stakeholder deliberation, and the political concept of corporations along with CSR, and show the shortcomings for deliberation of stakeholders with equal status. Third, I shall introduce the notion of circumstances of justice for the conditions for deliberation. I briefly critique both Dworkin’s primacy of justice with distribution of resources and the Rawlsian justice of fairness for primary goods within the above liberal context and advance the notion of Sen’s capability approach to deliberation for justice. From this perspective, I shall put forward the notion of freedom as non-domination and stakeholder recognition within a political concept of modern civic republicanism as precondition for just input conditions all to encourage deliberation among multi-stakeholders for improved justice. I shall then briefly evaluate a set of MSI input legitimacy criteria within democratic legitimacy against the minimal and common conditions.

In the Heideggerian sense of ‘thrownness’, we are thrown into a multifaceted and necessarily problematic social world (Nathan, 2010: 52). It is problematic because the social world is constituted by three basic social facts (Nathan, 2010: 4). Human diversity – the first basic social fact – is inevitable; we differ in our capabilities, including our identities. We also differ in our ethical convictions of what is a good or a meaningful life and therefore we live in an ethical plural society – the second basic social fact. And the third basic social fact is that we are interdependent in pursuing our complex of multiple purposes within the social world in many dimensions – economic, social, cultural and ecological. Furthermore, we are interdependent not only among ourselves but also inter-generationally.

The above basic social facts lead to two problems within the context of multi-stakeholder deliberation. First, stakeholders differ in their particularities and therefore have conflicting and competing interests and values. For example, employees, customers, suppliers, civil society and the government as stakeholders of the firm may have interests in ensuring the firm’s existence while being affected by the firm’s activities directly or indirectly. But each of these stakeholders may value different aspects of the firm’s existence according to their differing ethical convictions of what is good, which may come into conflict: employees may value their fair wages and other welfare benefits; the government may value the tax revenue and job creation; customers may value lower prices and higher quality of products and services; and suppliers may value higher prices for their supplies. These values may conflict with the shareholders’ value of maximising profit. Moreover, stakeholders even within a group differ in their identities and have multiple intersecting identities and interests. For example, employees as stakeholders consist of multiple intersecting collective identities and interests based on gender, sexuality, religious faiths, nationality and ethnicity. EU Member States as multi-stakeholders also differ in their particularities, which are constituted by character – composed of sociodemography, which includes language(s) and religious and socio-cultural practices; structure – political, social and legal institutions and constitutions; and resources – natural, economic, human and military. Moreover, Member States’ national interests may differ in various dimensions – economic, socio-cultural and ecological.

Second, stakeholders, human groups or individuals or institutions, are interdependent directly or indirectly in pursuing their complex of purposes even though their ethical convictions of a good or a meaningful life may differ. And, along with their differing endowments in multiple dimensions – economic, social and political – the interaction with various institutional structures – social, political and economic, both formal and informal – can lead to asymmetrical power relations among those stakeholders. Therefore, stakeholders are vulnerable to subordination and domination by the power holders among them. Most critically, due to asymmetrical power relations among those stakeholders in many dimensions – economic, social, ecological and political – the power holders among them may exert pressure on others to get more consideration in seeking their ends (see Frooman, 1999). Some scholars (Agle et al., 1999; Mitchell et al., 1997) have proposed that not only ‘power potential’ but also the ‘legitimacy and urgency’ factors of the stakeholders’ claims should be taken into consideration (Scherer et al., 2006: 513; see also Sachs et al., 2009: 33). But, as Frooman (1999) maintains, the power factor dominates the other two (Scherer et al., 2006: 513).

The above two problems of conflicting goals of value maximisation with differing interests and asymmetrical power relations among stakeholders can lead to powerless stakeholders becoming vulnerable to oppression through exploitation, marginalisation and systematic discrimination, and even exclusion. For example, corporations may exploit powerless members of communities – minorities, including women and children, for example, in sweatshop operations (Young, 1990, 2004). Corporations may also exploit weak or failing or corrupt states to their advantage.

The above problems are compounded within the political ideology of liberalism delineating the public and private spheres. Corporations are formed under freedom of association and exist to conduct their economic activities as private actors within the private sphere of the economy; matters related to social justice and provision of public goods are the role and responsibility of the State within the public sphere. However, many activities of stakeholders are interdependent and cut across both spheres. Within the globalised society, it is also difficult to delineate neatly the economic and political spheres (Crane et al., 2008), and many activities and provision of social goods require the interaction of both spheres. Moreover, as Scherer et al. (2006: 512) note, ‘[e]conomic activities inevitably cross the territory-bound validity of state regulation and bureaucracy’ and hence, within the ‘classical liberal’ model of society, the division of labour between the public (the state) and the private (business) is ‘highly problematic at both national and international levels’. In their response to the critique of the politicisation of the corporation, Palazzo and Scherer (2008b: 774) argue ‘that the postnational constellation changes the conditions of corporate legitimacy and casts doubt on the validity of the assumed private/public division’. Hence it is debatable, within the political model of liberalism, whether corporations have any legitimacy in administering and providing public goods. However, the state can privatise the provision of public goods for economic efficiency, but it may regulate. For example, the state may seek to ensure a level of service in remote areas that a private corporation might discard as unprofitable. Despite these theoretical challenges to classical liberalism, within liberal democracies many MSIs are formed with actors from both the public and private spheres for deliberation to fill some governance gaps within the globalised society. However, given the vulnerabilities of stakeholders due to asymmetrical power relations and the issues of recognition, it is important to understand just conditions for deliberation, which is the aim of this chapter.

I shall now discuss some other particular traits of liberalism and the arguments for deliberative democracy, ‘an alternative approach to the classical liberal model’ (Scherer et al., 2006: 520), based on the works of Habermas (1996, 1998, 2001). There are several variations of liberalism within political philosophy (Johnston, 1994); however, I shall focus on classical liberalism, which is based on an anti-perfectionism approach and attempts to accommodate the diversity of the good through state neutrality. Under this ideology, the state is not supposed to interfere with competing conceptions of the good. Within liberal democracy, citizens are expected to bargain over their preferences and political legitimacy based on the output through elections and ignore the procedural input (Scherer and Palazzo, 2007: 1107). It is problematic, within classical liberalism, to address the ‘public interest’ as a result of the aggregation of individual interests of private citizens (Elster, 1986; Habermas, 1998). Moreover, within ethical plural society we require deliberation on issues of conflicting and normatively contestable moral values, which I shall argue can be accommodated within civic republicanism (Nathan, 2010). In order to address these concerns, a deliberative approach that attempts to ensure discursive quality of decision-making is proposed (Gutmann and Thompson, 2004; Habermas, 1998). This deliberative approach – deliberative democracy – is expected to transform fixed preferences and exclusive self-interest to benefit the common good going beyond the aggregation of economic interests (Zey, 1998). Its central idea is that the ‘state’s raison d’être does not lie primarily in the protection of equal individual rights but in the guarantee of an inclusive process of opinionand will-formation in which free and equal citizens reach an understanding on which goals and norms lie in the equal interest of all’ (Habermas, 1998: 241; quoted in Scherer et al., 2006: 516). Although it is an ‘ideal speech situation’, the point Habermas emphasises is that citizens of the republican polity have concerns over public interests other than pursuing their private interests. However, it is doubtful how the state may ensure that everyone can participate in all public decisions as free and equal citizens. Habermas, while agreeing that ‘the legitimacy of laws is strongly tied “to the democratic procedure” ’ within the republican approach, critiques republicanism as unrealistic due to the expectation of a ‘direct and permanent participation’ of all citizens, given ‘the high complexity of modern political systems’ (Mena and Palazzo, 2012: 530; cf. Habermas, 1998: 242). Realising this problem, Habermas turns towards the procedural design of political institutions and away from individual participation to associations such as NGOs and CSOs. Hence, Scherer and Palazzo (2007) consider Habermas’s conceptual changes to deliberative democracy to be more pragmatic than his earlier ethical discourse criteria (utopian) ideal speech situation.

The Habermasian deliberative democracy approach encourages state–civil society interaction for deliberation. However, within globalisation, TNCs and MNCs with their increasing influence and power cannot be ignored within transnational democracy (Drzzek, 1999; Fung, 2003). With this spirit, Scherer and Palazzo (2007) argue for the political concept of corporations. They argue that corporations as political actors have political responsibility by ‘an explicit participation in public processes of political will-formation’ (2007: 1108). Corporations do not replace governments, but ‘they participate in public deliberation, define norms and standards’ (Scherer et al., 2006: 507). Although there are issues of legitimacy of corporations as political actors in deliberating for public goods within liberalism, as I discussed above, due to the dichotomy of the public versus the private sphere, I agree that multi-stakeholder deliberation for global issues requires stakeholders from both public and private actors, which include TNCs and MNCs. In this chapter, my focus is not on whether we can conceptualise corporations as political actors or political CSR (Whelan, 2012) but rather on the just conditions for deliberation.

However, there are some challenges with regard to the deliberative model. First, are the platforms for deliberation accessible to the parties and individuals concerned? Second, can these parties and individuals deliberate on contentious issues as free and equal citizens without any power play, not only within a state, but globally among the states? Furthermore, it is a concern whether corporations have adequate skills, motivation and legitimacy in political deliberation and whether all stakeholders would participate without fear of retribution. And it is doubtful whether all conflicts could be resolved by referring to some moral grounds that are applicable to all parties and individuals. Although Habermas concedes that normative conflicts may not be solvable by referring to a shared background of values and traditions, he argues that communication can be a ‘sole source of peaceful interaction and mutual recognition’ (Scherer and Palazzo, 2006; Palazzo and Scherer, 2006; cf. Habermas, 2001: 74). But it is not clear how mutual recognition may be achieved when parties and individuals deliberate in their particularities that may be a source of discontent.

As per the above perspective, due consideration should be given to the conditions for deliberation by all stakeholders. I shall show that we need to introduce, drawing from Dworkin’s (2000: 263–264) arguments, justice as a normative parameter in order to provide the minimal and common conditions for deliberation. Dworkin defines a ‘hard parameter’, without which one is bound to fail, and which is therefore essential, for an ethical situation that should be given. He goes on to argue that ‘a good life is a life suited to the circumstances justice requires’. Moreover, Dworkin (2000) goes on to argue that justice as a normative parameter resolves the puzzling interplay between ethics and morality – between living well and living a moral life (Nathan, 2010: 79). I shall discuss the issue of ethics and morality later on in this chapter. From the above arguments, it is important that we should be concerned about the just conditions – the circumstances of justice – for deliberation by all relevant stakeholders. So, the question is: what are the just conditions that are minimal and common for stakeholder deliberation within the model of deliberative democracy?

Dworkin (2000: 264–265) argues within the context of living well – ‘responding in the right way to the right challenge’ – that resources should figure as a normative parameter and therefore tied to justice (Nathan, 2010: 80). Although the distribution of resources is a matter of concern for justice, so may the issues of recognition (Honneth, 1995; Fraser and Honneth, 2003) and many other conditions figure as normative parameters ...

Table of contents

• Cover
• Title Page
• Copyright
• Contents
• List of Figures and Tables
• Notes on Contributors
• Introduction
• 1. Multi-stakeholder Deliberation for (Global) Justice: An Approach from Modern Civic Republicanism
• 2. Forging the Iron or Chasing the Wind? New Challenges to Europe’s Governance
• 3. Shaping the European Mindset: A Governance Design and Policy Innovation Agenda
• 4. New Governance for New Challenges in the European Union
• 5. The Transatlantic Regulatory Timing of Policy Innovations: The Case of Renewable Energy
• 6. From Consensus to Scepticism: The Uncertain Future of Europe
• 7. Renewing European Politics
• 8. An Integrated Europe: Undermined by Transactional Interests
• 9. The Future of Europe: A Perspective from Asia
• 10. Russia Looking at EUrope
• 11. Europe Seen from Africa
• 12. EU versus Russia Standoff: Georgia’s Virtual ‘Choice’
• Index