Input and Output Legitimacy of Multi-Stakeholder Initiatives
Under which conditions can multi-stakeholder initiatives be legitimated? – Mena and Palazzo try to give the answer by presenting a set of newly developed legitimacy criteria, illustrating their concept with a wide range of MSI examples.
In their conceptual paper the authors explain that national regulatory schemes have failed not only to tackle environmental externalities of global markets, but also to tackle corruption in weak governance states. This is why private governance and self-regulatory activities are on the rise in recent years. They manifest in multi-stakeholder initiatives (MSI), defined as private governance mechanisms involving corporations, civil society organizations, and sometimes other actors, such as governments, academia or unions, to cope with social and environmental challenges. But these MSI have been criticized for not being legitimated democratically. The authors distinguish between output and input legitimacy and develop a set of criteria which they also try to operationalize giving detailed definitions of each criterion. Interestingly, Mena and Palazzo present a comprehensive table of examples of MSI, including three initiatives that explicitly tackle the problem of corruption, namely, the Wolfsberg Process, the Extractive Industries Transparency Initiatives (EITI), and the Partnering against Corruption Initiative (PACI) of the World Economic Forum.
In a globalizing world, governments are not always able or willing to regulate the social and environmental externalities of global business activities. Multi-stakeholder initiatives (MSI), defined as global institutions involving mainly corporations and civil society organizations, are one type of regulatory mechanism that tries to fill this gap by issuing soft law regulation. This conceptual paper examines the conditions of a legitimate transfer of regulatory power from traditional democratic nation-state processes to private regulatory schemes, such as MSIs. Democratic legitimacy is typically concerned with input legitimacy (rule credibility, or the extent to which the regulations are perceived as justified) and output legitimacy (rule effectiveness, or the extent to which the rules effectively solve the issues). In this study, we identify MSI input legitimacy criteria (inclusion, procedural fairness, consensual orientation, and transparency) and those of MSI output legitimacy (rule coverage, efficacy, and enforcement), and discuss their implications for MSI democratic legitimacy.
S. Mena & G. Palazzo, “Input and Output Legitimacy of Multi-Stakeholder Initiatives”, Business Ethics Quarterly 22 (3), 527–556 (2012)