Transnational Corporations as Social Actors: An Institutional approach to explaining the Effectiveness of Corporate Social Responsibility (CSR) Programmes

The engagement of transnational corporations (TNCs) in governance arrangements targeting the social and environmental externalities of globalization processes arguably is one of the most dynamic areas of research in international politics. The concept of corporate social responsibility (CSR) lies at the heart of this research program. While a burgeoning amount of research has examined what motivates TNCs to engage more actively with their social environment through CSR, the unanswered question remains if and when CSR is actually contributing to narrowing the governance gaps that gave rise to the proliferation of CSR policies and programs in the first place. By filling the empirical gap regarding the effects of TNCs’ engagement in CSR on local stakeholders in a developing country context, this paper aims to contribute to a more empirically-grounded conceptualization of the role of TNCs in global politics. The paper draws from empirical research in Guatemala (including 120+ semi-structured interviews with firm representatives and local stakeholders) that assessed the effects of CSR on governance issues pertaining to social and environmental conditions in four industry sectors (mining, textile, coffee, and sugar). Based on the empirical findings and drawing on institutional analysis, the argument is advanced to conceptualize TNCs as social actors whose ability to contribute to global governance issues is not only contingent on rationalist constraints related to efficiency but also to diverging expectations originating from diverse institutional environments. Subsequently, three situational factors are identified that affect the propensity of TNCs to contribute to the alleviation of governance problems: 1) configuration of preferences and interests between TNCs and various stakeholder groups, 2) problem structure characteristics and 3) norm conflicts and contestation.