For lack of anything better?International organizations and global corporate codes

This paper analyzes the two most important international programs for the voluntary regulation of corporate behavior: the OECD Guidelines for Multinational Corporations and the UN Global Compact. It argues that international organizations adopted them mostly for reasons of political feasibility: by imposing minimal constraints on constituents the standards circumvented the most pressing problems of political acceptability associated with standard-setting. It finds no clear evidence, however, that the network solutions adopted are technically more effective than more traditional forms of regulation. The paper concludes that while it is unlikely that corporate behavior will change simply as a result of participation in these programs, if the programs increase their ability to consistently discriminate between good and bad performers, the resulting ‘soft’ sanctioning power has the potential to alter corporate behavior in the long run.