Corporate Social Responsibility in Global Economic Governance: A Comparison of the OECD Guidelines and the UN Global Compact

This chapter focuses on private business as one of the central actors in global economic governance. It explains the rise of business ethics and corporate social responsibility (CSR) and in particular why transnational corporations (TNCs) only act in response to particular, predominantly voluntary, governance mechanisms and not to others. Governance mechanisms are defined as instruments that ask TNCs to comply with provisions concerning human rights, labour and environment, such as the OECD guidelines for multinational enterprises, the UN Global Compact or standards such as the Social Accountability 8000. Based on the assumption that TNCs have to take moral and ethical aspects into consideration, the concept of authority is crucial to TNC behaviour. The concept is based on three elements: power, interest and legitimacy. I argue that only if governance mechanisms meet these three elements are TNCs willing to change their behaviour in accordance with provisions laid out in these governance mechanisms. In a case study I show that the Global Compact has a comparative advantage to other governance mechanisms by fulfilling this condition.