|1. A new kind of international regulatory system is spontaneously arising out of the failure of international "Old Governance" (i.e., treaties and intergovernmental organizations) to adequately regulate international business. Nongovernmental organizations, business firms, and other actors, singly and in novel combinations, are creating innovative institutions to apply transnational norms to business. These institutions are predominantly private and operate through voluntary standards. The Authors depict the diversity of these new regulatory institutions on the "Governance Triangle," according to the roles of different actors in their operations. To analyze this complex system, we adapt the domestic "New Governance" model of regulation to the international setting. "Transnational New Governance" potentially provides many benefits of New Governance and is particularly suitable for international regulation because it demands less of states and intergovernmental organizations (IGOs). However, Transnational New Governance does require states and IGOs to act as orchestrators of the international regulatory system, and that system currently suffers from a significant orchestration deficit. If states and IGOs expanded "directive" and especially "facilitative" orchestration of the Transnational New Governance system, they could strengthen high-quality private regulatory standards, improve the international regulatory system, and better achieve their own regulatory goals.
2. International organizations (IOs) have been widely criticized as ineffective. Yet scholars and practitioners assessing IO performance frequently focus on traditional modes of governance such as treaties and inter-state dispute-resolution mechanisms. When they observe poor performance, moreover, they often prescribe a strengthening of those same activities. We call this reliance on traditional state-based mechanisms “International Old Governance” (IOG). A better way to understand and improve IO performance is to consider the full range of ways in which IOs can and do operate – including, increasingly, by reaching out to private actors and institutions, collaborating with them, and supporting and shaping their activities. Such actions are helping to develop an intricate global network of public, private and mixed institutions and norms, partially orchestrated by IOs, that we call “Transnational New Governance” (TNG).
With proper orchestration by IOs, TNG can ameliorate both “state failure” – the inadequacies of IOG – and “market failure” – the problems that result when the creation and evolution of norm-setting institutions is highly decentralized. Orchestration thus provides a significant way for IOs to improve their regulatory performance. Some IOs already engage actively with private actors and institutions – we provide a range of illustrations, highlighting the activities of the UN Environment Programme (UNEP). Yet there remains a significant “orchestration deficit” that provides real opportunities for IOs. We draw on the lessons of existing IO activities to suggest additional possibilities for improving IO performance.
Kenneth W. Abbott
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