Business Strategy and International Environmental Governance: Towarda Neo-Gramscian Synthesis · David L

BusinessDavid L. StrategyLevy and and Peter International J. Newell Environmental Governance Business Strategy and International Environmental Governance: Towarda Neo-Gramscian Synthesis · David L. Levy and Peter J. Newell

Thecentrality of business innegotiating, structuring, and implementingre- gimesof internationalenvironmental governance is all too obvious to negotia- tion participants. Dupont’s inuence over theUS administration’s position on ozone-depleting gasses and thefossil fuel industry’s leverage over negotiations to limitgreenhouse gas emissionshave been welldocumented. 1 Thetrend to- wardprivatization of governance, inthe areas of environmentalmanagement systems, chemicalsin foodstuffs, and related trade disputes, have also received some criticalattention. 2 Nevertheless, theoreticaltools for understanding therelationship of business tointernationalenvironmental governance are underde- veloped. Despite considerable popular concernwith the growing power of multinational corporations (MNCs) and thelack of democraticaccountability ininternational governance, therehas been littlescholarly attention to the mechanismsand effectivenessof corporate political strategies directed toward internationalenvironmental regimes, nor to theunderlying processes by which corporate perceptions of their interests develop. Afocus on therole of theprivate sectorsuggests theneed for apolitical economy approach. Theinterdisciplinary framework developed herebridges macroand micro-levelsof analysis by bringingtogether perspectives fromInter- national Relations (IR) withtheories of managementand organization. In broad terms,we view the uneven and fragmented nature of internationalgover- nanceas theoutcome of aprocess of bargaining, compromise, and alliancefor- mationat thelevel of specic regimes.These negotiations, whichare constitutive of thebroader structuresof global governance, engage arangeof actors includingstates and transnationalorganizations, businesses and industry asso- ciations, and social forcessuch as environmentaland labor groups. Organiza- tions suchas theUN and theWorld Trade Organizationserve in multiple capacities; as fora for bargaining, as targets of policy,and as semi-autonomous agents in their own right.

1. Levy 1997; Newell 2000; and Parson 1993 2. Clapp 1998; and Cutler et al. 1999.

84 David L. Levy and Peter J. Newell · 85

Specic regimesare constitutive of global governancestructures as wellas aproduct of thesewider con gurations. Thedevelopment of eachenvironmen- tal regimeis shaped by micro-processesof bottom-up bargaining and con- strained by existingmacro-structures of production relationsand ideological formations. Thesestructures, whichthemselves are the outcome of historical conicts and compromises, ensurethat thebargaining process isnot apluralis- ticcontest among equals, but ratheris embedded withinbroader relationsof power. Nevertheless, thecomplexity and dynamicnature of thebargaining process, withinwhich alliances, interests, and capacities of actors canshift and mu- tate, lends adegree of indeterminacyto thecompromises reached over theform and mechanismsof individual regimes.Sensitivity to astrategicdimension of power suggests that intelligentagency cansometimes outmaneuver resource- rich adversaries.

Beyond Regime Theory Thebasic conceptof regimesin International Relations retainsconsiderable value for analyzing internationalgovernance. Keohane denes regimes as “per- sistentand connectedsets of rulesand practicesthat prescribebehavioral roles, constrainactivity, and shape expectations,”3 whileKrasner similarly refers to clustersof “norms,rules, principlesand decision-makingprocedures.” 4 Notable inthese de nitions is the recognition of regimesas lociof governance, distinct fromstates or governments, whosecognitive and normativedimensions can structuresocial behavior. 5 Rules, norms,and practicesgenerally operate inthe contextof specic organizations, “materialentities possessing ofces, person- nel, budgets, equipment, and moreoften thannot, legal personality,”6 which typically have some capacity for monitoringand enforcement.Regimes thus comprisenetworks of actors, routines, principles,and rules, simultaneously constituting and discipliningtheir subjects, constrainingand enabling patterns of behavior. Despite therichness of theregime concept, thedevelopment of regime theory has been somewhatconstricted. It has primarilybeen used to explain the existenceof internationalinstitutions of governanceas mechanismsfor “resolv- ingcon icts, facilitating cooperation, or moregenerally ,alleviating collective- actionproblems ina world of interdependent actors.”7 Thisfunctionalist orien- tation presumes that regimesare benign entitiesnegotiated ina pluralisticcon- text to provide public goods suchas environmentalprotection. Moreover, regimetheory has been muchcriticized for its state centricity 8 and neglectof non-

3. Keohane et al. 1993, 4. 4. Krasner 1983, 2. 5. Rosenau 1992; and Young 1994. 6. Young 1994, 15. 7. Young 1994, 3. 8. Strange 1996. 86 ·Business Strategy and International Environmental Governance state actors, particularly NGOsand business. 9 Bycontrast, theGramscian frame- workadvanced inthis paper points to theimportant roleof business actors, whilesuggesting theimportance of civilsociety as aeld of political struggle. Regimetheory also tends to neglectthe embeddedness of particular regimesin broader economicand discursive structuresof theglobal capitalist economy, thelinkages between domestic and internationalpolitics, 10 and thedynamic processes withinwhich interests are rearticulated and coalitions recongured across these levels. AGramscianframework promises considerable value inunderstanding theprocesses of contestation, resistance,and accommodation at theregime level, as wellas therelationship between regimes and broader relationsof power. Gramsci’s work,which has been applied by anumberof IRscholarsin recentyears, also has value inanalyzing thestrategies pursued by MNCsas they engage withenvironmental regimes. Gramsci’ s workcombined abstract conceptual development withdetailed, bottom-up analysis of particular social situa- tions. Byextending thiswork to examinecorporate engagementwith environmentalregimes, we highlight the political nature of strategies to protect market position, legitimacy,and autonomy inthe face of environmentalissues; technological innovation, partnershipswith NGOs, and thedevelopment of private standards are all “political” in this broader sense. Gramscianideas provide aconceptual linkagebetween corporate strategy and internationalrelations in constructing a political economy of international environmentalgovernance. We use theterm “ neo-Gramscian”in acknowledge- mentthat our conceptual frameworkdoes not relyon Gramsci’s writingin any doctrinairesense and that italso owes intellectualdebts elsewhere.Our frame- workoffers anumberof unique insights. It addresses relationships betweenna- tional and internationallevels of analysis, betweenstates and non-state actors, and betweenagency and structural relationsof power. It points to particular pat- ternsof strategies likelyto be adopted inbargaining over complexregimes, and highlightsthe dynamic, and somewhatindeterminate path of regimeevolution. Finally,itsuggests astrategicconcept of power that presentsopportunities for resource-poor groups to outmaneuver rivals.

Gramsci’s Politics Perhaps Gramsci’s most signicant contribution to political thought isthe concept of hegemony,referringto thepersistence of specic social and economic structuresthat systematically advantage certaingroups. Hegemony isnot de- pendent on coercivecontrol by asmallelite, but ratherrests on coalitions and compromisesthat provide ameasure of political and materialaccommodation withother groups, and on ideologies that convey amutuality of interests.Hege-

9. Haas et al. 1993; and Hauer 1998. 10.DeSombre 2000; and Schreurs 1997. David L. Levy and Peter J. Newell · 87 monicstability isrooted inthe institutions of civilsociety ,suchas thechurch, theacademy ,and themedia, whichplay acentralrole in ideological reproduc- tion, providing legitimacythrough theassertion of moraland intellectuallead- ershipand theprojection of aparticular set of interestsas thegeneral interest. Civilsociety ,inGramsci’ s view, has adual existence.As theideological arenain whichhegemony issecured, itrepresents part of the“ extended state,”comple- mentingthe coercive potential of state agencies. However, therelative autonomy of civilsociety fromeconomic structures and fromstate authority turnsthe ideological realm into a key site of political contestation. Ahegemonicsocial structure, or an“ historicalbloc” in Gramscian terms, exerciseshegemony through thecoercive and bureaucratic authority of thestate, dominancein the economic realm, and theconsensual legitimacyof civilsociety.Gramsciused theterm historical bloc to referto thealliances among various social groupings and also to thespeci c alignmentof material,organizational, and discursive formations whichstabilize and reproduce relationsof production and meaning.These two meaningsof “historicalbloc” are closely related, for theability tomobilize aneffective alliancerequires not just economicside- payments but also discursive frameworksthat actively constitute perceptions of interests. For Gramsci, hegemony entails:

not only aunisonof economic and political aims, butalso intellectual and moral unity ...the developmentand expansionof the [dominant] group are conceived of, and presented,as being the motorforce ofauniversalex- pansion. ..Inother words,the dominant groupis coordinated concretely with the general interests of the subordinate groups. 11

Hegemony isalso contingentand unstable. Theeconomic and ideational realmsevolve indialectical tension, generatingunderlying fault-lines and contradictions. Gramsciwas acutely sensitiveto theresulting dynamics: “What is thiseffective reality? Is itsomething static and immobile, or isit not rathera relationof forcesin continuous motion and shiftof equilibrium?”12 This understanding of thecomplex dynamic nature of social systems, suggestive of contemporary complexity theory, 13 led Gramscito emphasize theimportance of agency and strategy inchallenging groups withsuperior resources. Drawing fromMachiavelli, Gramsci posited that thepolitical party could serveas the“ ModernPrince,” who could analyze the“ relationsof forces”to reveal weaknessesand points of leverage, and possess theorganizational capacity to interveneduring criticalwindows of opportunity.Gramsciwarned against fa- talismthat stemsfrom overly deterministic,structural accounts of history,and also against utopianism that results fromexcessive faith inunconstrained agency.

11. Gramsci 1971, 181. 12.Gramsci 1971, 172. 13.Stacey 1995. 88 ·Business Strategy and International Environmental Governance

Gramscioutlined two particular formsof strategy commonlyevinced in social conicts. The term “ passive revolution”was used to describe aprocess of reformistchange from above, whichentailed extensive concessionsby relatively weakhegemonic groups, often inthe guise of populist or nationalist programs, inan effort to preserve theessential aspects of social structure. Theconcept of “warof position”employed amilitarymetaphor to suggest howsubordinate groups mightavoid afutile frontal assault against entrenchedadversaries; rather,the war of position constitutes alongerterm strategy, coordinated across multiple bases of power, to gain inuence in thecultural institutions of civilsociety, develop organizational capacity, and to win new allies.

Gramsci and International Relations If therole of business has been somewhatneglected inregime theory ,ithas takencenter stage inthe work of anumberof scholarswho have applied Gramscito questions of internationalrelations. Cox argues that thisapproach “regards classformation and theformation of historicblocs as thecrucial factor inthe transformation of global political and social order,”14 generatinga bottom-up understanding of theworld economy and state system that avoids the economicdeterminism of world systems theory.Cox and othersdescribe theas- cendancyof atransnationalhistorical bloc comprisinga managerialelite from MNCs, professionals fromNGOs and academia, and governmentalagencies. 15 Cox contends that weare witnessing the growth and coordination at aglobal level of economicstructures, neoliberal and consumeristideologies, and aset of economic/political institutions suchas theWorld Trade Organizationand Inter- national MonetaryFund. Sklairpoints to thestrategic function of transnational industry groupings suchas theTrans-Atlantic Business Dialogue and theEuro- pean Roundtable of Industrialists increating the infrastructure of theemerging bloc.16 At thecenter of thisbloc, Cox argues, isa transnationalmanagerial class, which,despite internalrivalries, displays an“ awarenessof acommonconcern to maintain the system.”17 Gillrefers to thedominant ideology of thetransnational elite as “disciplinary neo-liberalism,”which incorporates afaith inmarket forces, privatization, unfettered internationaltrade and investment,and minimalprovision of social services. 18 He describes thesurveillance mechanisms that impose disci- plineon states, companies, and individuals inthe new order, fromthe monitor- ingof ination rates and budget decits to corporate and personal creditrat- ings. Theresult of thisrestructuring is a “newconstitutionalism” in which the rights of capital over states are enshrined in global accords.

14.Cox 1987, 357. 15.Murphy 1998; and Robinson 1996b. 16.Sklair 1997; and Sklair 1998. 17.Cox 1987, 359. 18.Gill 1995a, 1995b. David L. Levy and Peter J. Newell · 89

Theapplication of Gramscianthought to currenttrends in the international political economy has not been without critique. Germainand Kenny have questioned whetherGramsci indeed offers acoherentperspective on the relationshipbetween economic structure, ideology,and agency. 19 As Rupert ack- nowledges ina response, “Gramsci’s legacy isfragmentary ,fraught withanalyti- caland political tensions, and eminentlycontestable.” 20 Thisis hardly surpris- ing, given theun nished nature of Gramsci’s notes and thecomplexity of the theoreticalchallenge. Gramsci’ s value lies, rather,in the inspiration he has given to contemporary theorists in their sophisticated treatments of these issues. 21 Germainand Kenny’s critiqueof neo-GramscianIR for neglectingpro- cessesof resistanceis pertinent for some IRscholarswho provide aratherdeter- ministicreading of Gramsci.The writings of Cox, Robinson, and van der Pijl, for example, appear inplaces to reect an overly economisticdepiction of thedevelopment of structuresof governance, whilelacking a sophisticated theory of ideology. Cox, for example, denes the internationalization of the state thus:

First, there isa processof interstate consensusformation regarding the needs orrequirements of the worldeconomy that takesplace within acommon ideological framework. ... Second, participation in this consensusformation ishierarchically structured. Third, the internal structuresof statesare ad- justedso that each can besttransform the global consensusinto national policy and practice. 22

Thisrather top-down renditionpositions thenational state as aservant of international capital. Robinson likewiseargues that national states areconverted into “transmissionbelts and lteringdevices for theimposition of thetransnational agenda.”23 Vander Pijlpaints anabstract picture of conict between fractionsof capital based intheAnglo-US “ Lockeanheartland” and morepro- tectionistand interventionist“ Hobbesian”states. 24 Thewriting of theseneo- Gramsciansis similar in spirit to thebusiness conict model, whichattempts to explain foreignpolicy of states interms of competition among indus- trialblocs. 25 Thework of Gilland Sassoon, by contrast, ismore attuned to the signicance of discursive formations and the opportunities for contestation. 26 Germainand Kennyalso question therelevance of Gramsci’s analysis of thestate-civil society relationshipto contemporary internationalrelations, par- ticularlythe meaning of internationalcivil society and hegemony intheabsence of asupra-national state, or a“corresponding structureof concretepolitical authority.”27 As Rupert and Murphy emphasizein their responses, theproblem

19.Germain and Kenny 1998. 20.Rupert 1998, 427. 21. Giddens 1984; Hall 1986; and Laclau and Mouffe 1985. 22.Cox 1987, 254. 23.Robinson 1996a, 19. 24.van der Pijl 1998. 25.Cox 1996; Ferguson 1995; and Skidmore-Hess 1996. 26.Gill 1995a; and Sassoon 2001. 27.Germain and Kenny 1998, 17. 90 ·Business Strategy and International Environmental Governance isnot one of tryingto discernthe intent or truthof Gramsci’s originaltext, but ratherwhether the core concepts retain value. 28 We argue that hegemony retainsvalidity indescribing the stabilization of aspecic ensembleof economicand discursive relationsthat bind anetworkof actors withina frame- workof internationalinstitutions. Thisframework includes international agenciesthat exercisenormative and disciplinarysanctions, ifnot sovereign powers. Similarly,Gramsci’s conceptof civilsociety has application ifemergent internationalNGOs play thesame dual roleenvisaged by Gramsci;as semi- autonomous arenasof cultural and ideological struggle, and also as key allies in securinghegemonic stability .In securingsupport for market-based approaches to environmentalproblems, environmentalNGOs such as World Resources Institute and EnvironmentalDefense have become majoradvocates for market solutions and private partnerships. 29 Boehmer-Christensen’s workalso shows that internationalscienti c groups suchas theIPCC aremore embedded in thepolitical process thansuggested by conventionalaccounts of epistemiccom- munities.30 At thevery least, aGramscianperspective should provoke amore criticalengagement with pluralist accounts of global civilsociety that cham- pion NGOsas theautonomous social groups balancingthe power of states and capital.31 WhileGermain and Kennyare correct in arguing that muchof Gramsci’s workfocused on hegemony inthenational context, Gramscidid recognizethat capitalismand classconsciousness traversed national boundaries. 32 Some of his workwas comparative, examiningthe speci c historicalcon gurations of economic,ideological, and political forcesin different countries, but healso ad- dressed theshifting relationships among majorstates, suchas thegrowth of re- gionalism.33 He also noted theemergence of “internationalpublic and private organizations that mightbe theshapeless and chaoticcivil society of alarger, economicallyconcrete social order, and that certainlypromoted suchan order—the League of Nation’s economicagencies, theInternational Chamber of Commerce,the World Councilof Churches,the ILO, and various international fraternal orders.”34 Gramsci’s analysis wasacutely sensitiveto theinterplay of forcesoperating at multiple and intersectinglevels; regional, national, and international. Gramsci’s contribution tointernationalrelations, and to our understanding of environmentalregimes in particular, therefore,lies less inhis scattered notes on internationalpolitics and economics,and morein the concept of hegemonic formations as complexdynamic systems comprisingoverlapping and interpen- etrating subsystems:

28.Murphy 1998; and Rupert 1998. 29.Helvarg 1994; and Rowell 1996. 30.Boehmer-Christiansen 1996; and Haas 1992. 31. Lipschutz 1992; Mathews 1997; and Wapner 1995. 32.Gramsci 1971, 240–24 1. 33.See, for example, Gramsci 1995, 191–269, especially 232–233. 34.Murphy 1998, 423. David L. Levy and Peter J. Newell · 91

international relationsintertwine with theseinternal relationsof nation- states, creating new,unique and historically concrete combinations. Apar- ticular ideology,for instance, bornin ahighly developedcountry ,isdissemi- nated in lessdeveloped countries, impinging onthe local interplay ofcom- binations. Thisrelation betweeninternational forcesand national forcesis further complicated bythe existencewithin every State of severalstructurally diverse territorial sectors, with diverse relations of force at all levels. 35

Gramsci, Organization Theory, and Corporate Strategy We have noted howthe IR literaturetends to treat corporate interestsat anabstract, aggregate level; capital ratherthan corporations. Apolitical economy approach, whilerecognizing the embeddedness of regimesin broader structures, needs to address thespeci c conditions under which rmsengage withparticu- larissue arenas; atheory of the rmas apolitical actoris needed. 36 Management and organization theory offers several perspectives on corporate political strategy that provide insightinto therelationship between business and governance at thenational level. Muchof thisliterature, however, isconcerned with empiri- calinvestigation and categorization of thedrivers and formsof corporate politi- calstrategy (CPS), ratherthan posing largerquestions concerningthe extent and signicance of corporate power. 37 Early writingin the eld emphasized corporate dependence on governmentpolicy and characterizedstrategies along acon- tinuum, fromreactive to moreeffective, proactive approaches. 38 Thisrange of responses has also been associated empiricallywith corporate reactionsat differentstages of anissue’ s lifecycle. 39 Whilemuch of theliterature has viewed CPSas aset of non-marketactivities quite distinctfrom market-oriented strategies, Baronhas argued for theirintegration and Schulerhas noted that political strategies frequently serve as a substitute for failing competitive strategies. 40 TheCPS literature draws froma disparate set of conceptual frameworks. Political strategy at theindustry level has been viewed asaformof collectiveac- tion; thequestion isthenone of thecosts and benets of participation. Thisper- spective suggests that industries aremore likely to undertake coordinated action when rmsface a commonthreat, whenlarge economiesof scalefrom cooperation areavailable, and whenindustry concentrationenables afewlarge rmsto bear thecosts. 41 Anotherstream of researchexamines the strategic use of regulation by rmsto increasecosts for competitors or reduce thethreat of competitive marketentry .Thedifferential cost of meetingregulation frequently leads to thecreation of “winnersversus losers.”42 Osterhas argued that industries form

35.Gramsci 1971, 182. 36.Amoore 2000. 37.Getz 1997; and Shaffer 1995. 38.Mahon 1983; and Weidenbaum 1981. 39.Clarkson 1995. 40.Baron 1997; and Schuler 1996. 41.Lehne 1993; and Yofe 1987. 42.Leone 1986. 92 ·Business Strategy and International Environmental Governance

“strategicgroups” clustered around commonmarket and non-marketstrategies, and found that rmspursue political strategies that hurtrivals even whenthe outcome wasdetrimental to theindustry as awhole. 43 Shaffer’s study of theUS automobile industry’s response to CAFEstandards points to thedynamic evolution of political strategies as regulations and compliance costs evolve. 44 Severalcontributions have examined rm-leveland institutional variables that affect thepolitical strategy formulation process. 45 Boddewyn and Brewer have asserted that theintensity of political behavior islikely to be greaterwhen thestakes arehigher, opportunities for leverage aregreater, and rms’political competenciesare more developed. Moreover, thispolitical behavior islikely to be conictual ratherthan accommodating whenpotential policies have ahigh strategicsalience, when the situation isperceived as zero sum, and rmshave sufcient power to affect theoutcome. 46 Writinga decade before climatechange becamean issue for thefossil fuel industry,Gladwinand Walter, argued that se- curesupplies and stable demand arethe “ jugular veins”of MNCsin the oil industry,suchthat any threatwould likelyprovoke an assertive and uncooperative corporate response. 47 Whilethe corporate political strategy literaturesuggests ageneralantago- nismtoward environmentalregulation, thereis a rapidly growingstream of writingon corporate environmentalmanagement, whose central theme is an exploration of theeconomic bene ts of pursuing “green”strategies. Various sources of economicgain areposited. Theapplication of total quality and lean production managementtechniques to theenvironment offers thepotential for redesigningproducts and production processes to reduce pollution whilesi- multaneously reducingfuel and materialexpenses and thecosts of waste dis- posal, insurance,legal fees, and liability. 48 In addition, skillfulmarketing of greenproducts cangenerate positive publicity and createattractive newmarket segmentswith premium prices. 49 Despite theattractions of “win-win”rhetoric, however, thetheoretical case is more complex and empiricalevidence is mixed.50 Thequestion of whetherbusinesses have truly “changed course”regarding thenatural environment,as alleged inthe title of Schmidheiny’s inuential book, has generated acritical,populist literature. 51 Theway inwhich rmshave sought to deal withenvironmental challenges needs to be understood inapo- liticalcontext. Environmentalmanagement can be understood inGramscian termsas astrategy of accommodation, combiningmaterial and discursive efforts to preserve corporate legitimacyand autonomy inthe face of growingpub-

43.Oster 1982. 44.Shaffer 1992. 45.Hillman and Hitt 1999; and Hillman and Keim 1995. 46.Boddewyn and Brewer 1994. 47.Gladwin and Walter 1980. 48.Fischer and Schot 1993; and Smart 1992. 49.Coddington and Florain 1993. 50.Cairncross 1991. 51. Beder 1997; and Rowell 1996. David L. Levy and Peter J. Newell · 93 licenvironmental concern; it is thus moreabout political and economicthan environmentalsustainability .Thegrowth of systems of private regulation and environmentalstandard-setting through stewardship and certication schemes, for example, have provided akey route for rmsto projecttheir legitimacy as re- sponsible environmental actors. 52 Somecontributions attempt to examinecritically the signi cance of these trendsas patterns of business regulation ina contextof globalization. 53 While connectionsto theconstruction of internationalregimes are few, thisliterature provides evidenceof theplurality of roles played by rmsin creating and en- forcingdiverse structuresof governance. That theseare emerging alongside and partly inplace of inter-stateinitiatives suggests theshifting nature of alliances betweenactors and provides furtherinsight into theemergence of private regimes and the privatization of regulation. 54 Whilemanagerial and organizational approaches enrichour understand- ingof corporate environmentalstrategies, they tend to be decontextualized fromthe wider relations of power incapitalist society.Thereis also too littleat- tentionto contestation fromsocial groups, to thesigni cance of ideology,and to theprocess of corporate adaptation and accommodation. Here weuse Gramsci’s multi-level analysis of social systems to build acoherentframework that canlink the macro world of internationalgovernance structures with the microlevel of specic issue arenassuch as environmentalregimes. According to Aronowitz, Gramsci’s theory of thehistorical bloc canbe applied tocontempo- rarypolitics by “building froma micropoliticsof autonomous opposition movements, whether derived from production relations or not.”55 Gramsci’s conceptionof hegemony provides abasis for acriticalapproach to corporate political strategy that emphasizes theinteraction of materialand discursive practices,structures, and strategems insustaining corporate domi- nanceand legitimacyin theface of challengesfrom social actors and economic rivals. Corporations practicestrategy toimprove theirmarket and technological positioning, sustain social legitimacy, disciplinelabor, and inuence governmentpolicy .Theinterrelationships among theseactors and among marketand non-marketgoals leads to theconclusion that, ina broad sense, all strategy is political. As aresult, thetraditional distinctionbetween conventional (market) and political (non-market)strategy isuntenable. 56 It isnot just that rmsneed to coordinate marketand non-marketstrategies to achieveeconomic goals; Shrivastivadescribes the“ continuingpolitical battles that proactively shape the structureof competition,”and emphasizes theneed to analyze “thesocial and materialconditions withinwhich industry production isorganized, thelinkages of economicproduction withthe social and cultural elementsof life, the

52.Murphy and Bendell 1997. 53.Newell 2001. 54.Cutler et al. 1999. 55.Aronowitz 1981. 56.Callon 1998; and Granovetter 1985. 94 ·Business Strategy and International Environmental Governance political and regulatory contextof economicproduction, and thein uence of production and rmstrategies on theindustry’ s economic,ecological, and so- cialenvironments.” 57 Strategiesto engage withthese complex, interconnected economicand political structuresaffect therelative position and privilege of actors, and arethus inherentlypolitical. Thisinsight suggests a strategic concept of power. Thenetworks of actors and concomitantmaterial and discursive structures related to specic issue arenasclosely resemblethe “ organizational elds”dis- cussed ininstitutional theory, 58 particularly those renditionsthat attempt to in- tegrate aspects of the“ old”institutional theory,whichpays moreattention to power and alliances, 59 withthe new emphasis on legitimacyand norms. 60 Ac- cordingto Hoffman’s analysis of environmentalmanagement in theUS chemi- calindustry ,organizational “elds become centersof debates inwhich compet- inginterests negotiate over issue interpretation.”61 Fligsteinexplicitly uses the “marketsas politics”metaphor as aconceptual tool for analyzing internalbat- tles for corporate controland externalcompetition for marketdomination. 62 In Gramscianterms, eld-level politics canfruitfully be viewed as a“warof position,”a contested process of assembling and stabilizing anhistorical bloc. Simi- larly,theestablishment of hegemony isequivalent to theprocess of eld stabilization. Actorsseek to build coalitions of rms,governmental agencies, NGOs, and intellectualswho can establish policies, norms,and institutions that structure the eld inparticular ways. Industry,unable to relyon economicpower or governmentalconnections alone, needs support froma broader group of actors. TheGlobal ClimateCoalition, for example, theleading industry association op- posing theKyoto Protocol, invested considerable efforts to framepublic debates of thescience and economicsof climatechange in a way that would build alli- anceswith groups concernedabout energycosts, suchas farmersand retirees,as wellas otherindustry sectors. Whereinstitutional theory emphasizes pressures for convergenceand stability,however, aGramscianframework highlights dis- equilibrium and change.Contradictions, competing ideologies, and active agents ensurethat theterrain of economicand political contestation isforever unfolding.

Conclusion: Toward a neo-Gramscian Synthesis on Business and International Environmental Governance Asynthesisof themacro-level International Relations perspective withthe more micro-levelapproaches fromorganization theory provides thebasis for aframe-

57.Shrivastava 1986, 371–374. 58.DiMaggio and Powell 1991; and Scott and Meyer 1994. 59.Pfeffer and Salancik 1978. 60.Brint and Karabel 1991; and Fligstein 1991. 61.Hoffman 1999, 351. 62.Fligstein 1996. David L. Levy and Peter J. Newell · 95 workfor understanding therole of business ininternational environmental governance. Thedevelopment of individual regimesis constitutive of the broader system of governance, yet simultaneously constrainedby it. Theterrain of bargaining among MNCs, states, and NGOsover eachregime has unique fea- tures associated withthe particular environmentalissue inquestion; for example, climatechange and geneticallymodi ed organismsinvolve differentsets of actorsand institutions, scientic understandings, public perceptions of risks, and corporate interests.Nevertheless, both regimesare developing ina broader system of environmentalgovernance with some overlap inactors and institutions, and acommonset of normsand expectations regarding, for example, the role of market instruments and private initiative. Theprocess of regimeformation described hereresembles, insome respects, thebargaining theory of MNC-host country relationsdeveloped inthe 1970s.63 Accordingto thebargaining model, thedistribution of benets from foreigndirect investment was contingenton relative bargaining power, whichin turnwas a functionof thespeci c assets and capabilities held by eachside. In our framework,actors arebargaining over thevery structuresand processes of internationalgovernance. Regimestructures and processes thus reect the power, resources, preferences,and strategies of thevarious actors inthese con- tests. Theuneven outcomes of thesenegotiations among national states, business, and civilsociety ,over aseriesof specic issue arenas, account for thefrag- mentedand untidy formof global governance. Forexample, thedif culties in concludingthe Cartagena Protocol on Biosafety and theambiguous compromisesthat remainin the text of theagreement re ect the differences in approach to theregulation of geneticallymodi ed organismsbetween Europe and North America.These, inturn, areunderpinned by theshifting nature of relationsbe- tweenbiotech rms,government regulators and environmentalpressure groups, whichdetermine what sort of deal ispossible inlight of theneed to ac- commodate commercialconcerns regarding marketaccess and public concerns about the environmental and human health implications of the technology. Ourframework differs fromthe traditional investmentbargaining approach inseveral key respects. First,where the traditional model assumed that only MNCsand states participate innegotiations, amodel of bargaining inin- ternationalgovernance needs totake account of multiple actors. Second, thetraditional model emphasized theeconomic dimension of bargaining power aris- ingfrom access to unique resources, whilethe new model points to the importanceof discursive and cultural power to framedebates inspeci c ways, and thesigni cance of organizational capacity and alliances.These sources of power arenot simply additive; theinterplay of material,discursive, and organizational resources in a “war of position” is critical to success. It isuseful to highlightsome distinctivecontributions that aneo- Gramscianperspective bringsto regimeanalysis. First,we might expect to ob-

63.Fagre and Wells 1982; and Vernon 1971. 96 ·Business Strategy and International Environmental Governance servespeci c strategies as actors engage ina “warof position”across the three pillars of hegemony.Onthe material level, companiesdevelop product and technology strategies to secureexisting and future marketpositions. Onthedis- cursivelevel, companiesattempt to challengethe scienti c and economicbasis for regulation and use public relationsto portray themselvesand theirproducts as “green,”adopting thelanguage of sustainability,stewardship, and corporate citizenship.On the organizational level, companiesbuild issue-specic coalitions that crosssectoral and geographic boundaries and reachinto civilsociety to includelabor and othergroups. Wherepartners in civil society cannotbe lo- cated, one industry tactichas been to establish organizations ostensibly repre- sentingprivate citizensin order to give theimpression of grass roots lobbying, anactivity termed“ astroturf organizing.”64 AGramsciananalysis suggests, however, that without realroots incivilsociety ,historicalblocs arelikely to be weak; theultimate failure of theGlobal ClimateCoalition’ s challengeto climatesci- ence can be understood in these terms. Theframework is encouraging for environmentalNGOs because itpoints to thepotential for outmaneuvering rivalsthrough theuse of sophisticated analysis, cleverstrategy ,good timing,and some luck. NGOsare sometimes able to compensate for theirlack of resourcesby coordinating theirefforts, appealing to moralprinciples, and exploiting tensionsamong states and industry sectors withvarious interests.Such strategic opportunities arelikely to be morepreva- lentwhen issues arehighly complex, withmultiple actors, contingencies,and issue linkages, because itbecomes moredif cult to foresee consequences of ac- tions and to exercisepower inconventional ways. Paterson, for example, describes theway inwhichenvironmental groups have sought to mobilize the insuranceindustry to speak infavor of actionon climatechange, thereby frac- turing industry opposition to controls. 65 Greengroups have also been successful inthe UK inencouraging retailersto rejectGM ingredientsin theirfoods inre- sponse to consumerconcerns with a directimpact on themarket share of biotech companies. 66 Despite theselimited achievements, hegemony ,by its nature, isresilient. As Gramsciacknowledged, dominant actors often attempt to absorb social pressures and protect theirposition through anaccommo- dationist strategy of “passive revolution.”For example, European deance in the faceof strong pressure fromthe United States to open marketsto GMOsmay be worndown by thecredible threat of acasebeing brought before theWTO and US concessions on labeling of exported GMOs. Theneo-Gramscian framework suggests that stable and effective international regimesrequire theformation of anhistorical bloc inboth sensesof the term: rst, analliance among states, leading business sectors, NGOs,and as- sorted professionals; second, analignment of economic,organizational, and ideological forcesthat coordinate theinterests of themembers of thebloc. New-

64.Stauber and Rampton 1995. 65.Paterson 1999. 66.Levy and Newell 2000. David L. Levy and Peter J. Newell · 97 ellshows how, inthe case of climatechange, the boundaries of acceptable action arecon gured through amutually reinforcingrelationship between ideas, materialcapabilities and institutions. Thedebate concerningthe legitimacy and economicviability of various courses of actionis framed by anensemble of institutions and actors that transcendnational boundaries and whoseposition is bolstered by theirembeddedness withina particular structureof production that relies heavily on the use of fossil fuels. 67 Thecontested and contingentnature of Gramsci’s notion of hegemony nds apath betweenstate-centered accounts of traditional regimetheory and overly instrumentalaccounts of corporate power. The process of formingan historicalbloc also accounts wellfor thedynamics of issue development. Even in theabsence of externalshocks, a seriesof minordevelopments inthe economic, discursive, and organizational realmscan lead to aperiod of instability and change.The rapid movementof companiesin fossil-fuel related industries towarda moreaccommodating stanceafter 1997 cannotsimply be explained in termsof newscienti c discoveries or technologicalchanges, but owed froma cascading sequence of events endogenous to theissue arena, inwhich actors’ in- terestsevolved along withtheir strategies. 68 Whilethe indeterminacy of complex negotiations makesit impossible topredict theprecise form of anenvironmen- tal regime,a detailed analysis of actors’strategies and theshifting balance of forcescan help to provide insightinto thereasons whyspeci c mechanismsand structures evolve in the context of a particular environmental issue.

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