Tuesday, September 24, 2013

Foreign Direct Investment, Human Rights, INGOs

. Tuesday, September 24, 2013

One of the major areas of underdeveloped research within political science is the interaction between non-state actors. From an international political economy perspective, the literature has largely ignored the interaction of various non-state actors that are growing in importance, and its effects on different forms of trade. In a recently published article "Avoiding the Spotlight: Human Rights Shaming and Foreign Direct Investment" by Colin Barry, Chad Clay and Michael Flynn, they lay the foundation for examining this interaction. They examine the interaction between non-state actors (INGOs) and multinational corporations (MNCs) and the extent to which private actors' choices to invest in countries are affected by the reputational costs of doing business in those countries who have been targeted by human rights activists. In particular, they analyze how INGOs "naming and shaming" actions affect the level of FDI. Their results suggest that the naming and shaming approach by INGOs tends to reduce the amount of FDI received by developing states, thus providing evidence for INGO efforts affecting the behavior of MNCs.

While this research is certainly innovative it does leave open a couple of issues regarding the type of human rights needing to be examined. First, when focusing on foreign direct investment and human rights in general, is physical integrity rights the correct "form" of human rights abuse to look at in-depth. In particular, why is there no labor rights measure incorporated into the research design? If we are trying to determine the conditions under which multinational corporations will become concerned with a country's human rights record, it would certainly make sense that labor rights is probably the most important human rights issue to MNCs. That is, these would be the types of issues that MNCs would be cited and given numerous media attention by the international community.

As a human rights researcher from a political economy perspective, I am very excited to see the direction of our field moving down this route and examining the interactions between different non-state actors. I think these interactions will certainly reveal more of the underlying mechanisms at work in determining the conditions under which MNCs and other non-state actors choose to invest abroad.

240 comments:

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Lynn said...

Hi Lindsay , nice post!

Ronan said...

This is a really interesting topic. With the caveat that I havent read the paper yet (so feel free to tell me to read it!) does the pressure from Human Rights INGOs (which can lead to a lack of investment in developing countries?) generally encourage the country to improve its HR record? Or does it just lead to less investment and no real gains in HR standards?

Unknown said...

Thanks for the comments! Ronan, on the topic of whether or not INGOs influence countries' human rights standards there is mixed evidence of it. The best article I can point you to on that specific question is the Murdie and Davis (2011) paper on the impact of Human Rights INGOs shaming on states' human rights behaviors. In short, the authors find that states shamed or targeted by these organization do improve their human rights practices, however, shaming is not enough. The actual improvements in human rights practices are a result of both shaming by the international community (third party states, individuals.. etc) and domestic human rights organizations. Definitely worth a read!

Ronan said...

Thanks Lindsay! Going to look it up now

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