Informal Governance, Networks and the Politics of Transnational Public-Private Security Governance

Transnational institutions in which states, firms, and NGOs cooperate to govern the negative externalities of global corporate conduct vary in their institutional designs. Although these regulatory regimes are typically concerned with prisoners’ dilemma-like problems, they often lack the institutional structures required for effectively dealing with them. Rational choice-based theories of international cooperation are weak in explaining such inefficient institutions. I propose a political model of transnational institutional design that places distributional conflict and power asymmetries at the center of analysis. I argue that states, firms, and NGOs use multiple power variants, such as economic, institutional, and network power, to secure favorable institutional choices and that the extent to which different forms of power are effective and efficient means of influence is conditioned by the formality of the institutional context in which bargaining takes place. Integrating case study techniques and network analysis, I draw on data from the Kimberley Process on the regulation of “blood diamonds” to probe the explanatory power of my model.