L ondon School of E conom ics and Political Science Precious Stones, Black Gold and the Extractive Industries: Accounting for the Institutional Design of Multi­ stakeholder Initiatives Carola Kantz A thesis submitted to the Department of International Relations of the London School of Economics for the degree of Doctor of Philosophy in International Relations 2008 UMI Number: U615275 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U615275 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 W S C 5 f °[01X Declaration I certify that the thesis I have presented for examination for the MPhil/PhD degree of the London School of Economics and Political Science is solely my own work other than where I have clearly indicated that it is the work of others (in which case the extent of any work carried out jointly by me and any other person is clearly identified in it). The copyright of this thesis rests with the author. Quotation from it is permitted, provided that full acknowledgement is made. This thesis may not be reproduced without the prior written consent of the author. I warrant that this authorization does not, to the best of my belief, infringe the rights of any third party. Carola Kantz Abstract Why was the Kimberley Process (KP) able to devise a soft law institution ‘with teeth’ whereas the Extractive Industries Transparency Initiative (EITI) failed? In various policy fields and particularly in the extractive industries, multi-stakeholder initiatives (MSIs) are becoming more important for regulating business behaviour. However, International Relations (IR) has as yet failed to explain why some succeeded in designing a strong international institution whereas others failed. To answer the research question the thesis first establishes a methodology for assessing strong and weak institutionalisation of MSIs. I argue that functional regime theory is inadequate at assessing MSIs as it does not capture institutional variety within soft law. Based on the Global Governance literature, the thesis establishes four indicators - membership, obligation, monitoring and enforcement, which allow us to evaluate the degree of institutionalisation. How can we account for institutional variety of MSIs? Mainstream IR theories are not able to explain the differences between the two case studies as they gloss over the differences in normative and material structures assuming that complete rationality and concerns for efficiency are critical when determining institutional design. I argue that norm entrepreneurs push for strong institutionalisation by the social mechanism of norm diffusion. Succeeding in diffusing the norm by using political strategies such as framing and structural power galvanises support for strong institutionalisation. Nevertheless, norm diffusion can fail when political opportunity structures empower norm opponents rather than norm entrepreneurs. I argue that the impact of norms varies, depending on distinct structural settings. Thus I unveil the circumstances under which new norms do not gain acceptance from the international community. In summary, when accounting for the MSI institutionalisation process, we not only need to pay attention to political strategy and agents, but must include in the analysis normative and material structures as drivers of or constraints to norm diffusion. 3 Acknowledgements Before I started this project, I was warned by some who had gone down this road that writing a PhD was a hard, at times frustrating and lonely journey. At that time, I did not know how right they were. However, along my way I was able to meet remarkable people who gave me vital intellectual and emotional support. It is they who made my PhD journey such a rewarding experience. I am indebted to my supervisor, Robert Falkner, for his encouragement, patience and continuous support. He was able to strike the hard balance of giving me intellectual and practical advice when I needed it whilst nonetheless granting me the space to develop my own ideas. Academically, this thesis has also benefited tremendously from discussions with the fellows of the Centre of International Studies (CIS) at LSE. I particularly would like to thank Andreas Antoniades, Moshe Gat, Linda Hantrais, John Kent, Eva Nag, Daniel Mugge, Mario Pianta and Leslie Vinjamuri for critically discussing some of my ideas. I am further grateful to Sally Razeen, John Sidel and Andrew Walter from the International Relations Department, who gave me a painful upgrade panel pushing me in directions I would have never gone alone. Moreover, the many participants and panellists of the various conferences I attended helped me to refine or drop some of my arguments. Particularly, I would like to mention Doris Fuchs and Markus Lederer, who encouraged me to turn a conference paper into a journal article. This thesis would have looked very different without the time and patience of my interview partners in governments, international organisations, NGOs and the private sector. The conversations with them not only introduced me to the exciting world of diamonds, oil and gas but also ensured that I would not drift too far off into the theoretical world of International Relations. My warmest thanks go to my friends and the PhD community at LSE who helped me through the ups and downs such a project normally entails. With my friends in Carr-Saunders Hall, Annalena Baerbock, Laure Criqui and Alexis Sztejnhom, I could not only discover my new home, London, but could ease some of my frustration through conversations with them, particularly in the first year. Natalie Benjamin-Pinel, Emma DeAngelis, Sasha Mills, Claudia Paradis and Evelyn Volkel 4 were always there to put my worries into perspective in long phone calls, during badminton or walks in the beautiful English countryside. With Lisa Aronsson, Cristina Barrios, Simon Curtis, Maijo Koivisto, Simona Manea, Serena Sharma and Chris Wright, I shared both the joy and sorrows of writing a PhD. I would like to thank particularly Jonas Meckling who read three chapters of my thesis and provided valuable feedback. Florian Wastl’s support and patience was incessant in all categories. Most of all, I would like to thank him for reminding me each day that there is so much more to life than research - and for making my life so wonderful. I dedicate this thesis to my parents. Without their love and support I would never have been able to start and finish this project. My gratitude to them goes far beyond that which can be expressed in words. 5 Table of Contents Declaration......................................................................................................................2 Abstract...........................................................................................................................3 Acknowledgements........................................................................................................ 4 Table of Contents........................................................................................................... 6 List of Figures............................................................................................................... 11 List of Tables................................................................................................................ 11 Abbreviations............................................................................................................... 12 1 Precious Stones, Black Gold and Institutional Design....................................IS 1.1 The Extractive Industries, Conflict and the Transparency Norm .................18 1.2 Accounting for Institutional Design ................................................................22 1.3 Institutional Design, Political Opportunity Structures and Norm Diffusion 28 1.4 Ideas, Norms and Multiple Stakeholders ........................................................31 1.5 Methodology.................................................................................................... 35 1.6 Overview of the Thesis....................................................................................39 2 The Institutional Design of Multi-stakeholder Initiatives............................. 41 2.1 Measuring the Impact of MSIs in International Relations ............................42 2.1.1 Old Wine in New Bottles? .....................................................................43 2.1.2 Measuring Institutions: Effectiveness, Compliance and Institutional Design....................................................................................................51 2.2 The Institutional Design of International Institutions ....................................55 2.2.1 Theories of Institutional Design .............................................................55 2.2.2 The Variety of Soft Law, MSI and the Extractive Industries ............. 57 2.2.3 Theories of Institutional Design and MSI .............................................63 2.3 The Institutional Design of MSIs