Structuring Power: Business and Authority Beyond the Nation-State – with Abraham Newman

What is the relationship between globalization and the political power of business? Much of the existing literature focuses on the ability of mobile capital to threaten exit in order to press for more business friendly rules. In this article, we refine arguments about exit options in global markets by arguing that the relative exit options available to business and other actors are neither fixed, nor exogenous consequences of some generically conceived process of globalization. Instead, they themselves are the result of struggles between actors with different interests and political opportunities. Since exit options play a crucial role in determining the relative structural power of business vis-à-vis other actors, we dub the power to shape exit options structuring power, distinguishing it from structural power, and argue that it is crucial to explaining it. We identify two channels through which actors can shape exit options – extending jurisdictional reach and reshaping the rules of other jurisdictions – and the factors that will make regulators and business more or less capable of exercising structuring power. We then use two exploratory case studies – one involving privacy regulation, the other accountancy standards – to illustrate how structuring power can work to shape exit options, and thus structural power. We conclude by considering the relationship between structuring power, structural power, and the existing literature in comparative and international political economy.

Henry Farrell and Abraham Newman (2015), “Structuring Power: Business and Authority Beyond the Nation-State,” Business and Politics, 17,3:527-552.

Other Writing:

Chapter in an Edited Volume

Privatization as State Transformation

Privatization is an ambiguous term covering many loosely related phenomena. In this essay, I focus on one specific aspect of privatization-the privatization of governance. This sidesteps arguments about the presumed efficiency gains of, e.g., turning state-owned entities into for-profit corporations, and highlights the political consequences of privatization-how it takes decisions which had once been within ...
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Academic Article

Hybrid Institutions and the Law: Interface Solutions or Outlaw Arrangements?

Much discussion of law and e-commerce focuses on the extent to which e-commerce and the Internet weaken sovereign states’ effective control. Recently, in e-commerce, there has been a trend towards “hybrid institutions” which blend public oversight and private enforcement in the international arena. Do these institutions reflect the weakening of state legal orders, and the ...
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