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.
IPE @ UNC
IPE@UNC is a group blog maintained by faculty and graduate students in the Department of Political Science at the University of North Carolina at Chapel Hill. The opinions expressed on these pages are our own, and have nothing to do with UNC.
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Tuesday, September 24, 2013
Foreign Direct Investment, Human Rights, INGOs
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Hi Lindsay , nice post!
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?
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!
Thanks Lindsay! Going to look it up now
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Your analysis of FDI and human rights is eye-opening. It’s a compelling read that highlights an important global issue. Thanks for shedding light on this
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This is an insightful post that highlights an often overlooked aspect of international trade and investment—how the reputational influence of INGOs affects the behavior of multinational corporations. The focus on human rights “naming and shaming” is particularly interesting, as it suggests a powerful role for INGOs in shaping corporate decisions. I also agree with the point about incorporating labor rights into such research, as it seems to be a critical issue for MNCs. It will be exciting to see how this intersection between human rights and economic policies evolves.
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Neel KBH
kbhneel@gmail.com
This is a fascinating exploration of the intersection between INGOs, MNCs, and human rights. The impact of "naming and shaming" on FDI highlights the power of reputational considerations in global investment decisions. Looking forward to more studies in this direction!
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"Such a thought-provoking post! The impact of foreign direct investment on human rights is an important issue, and you’ve done an excellent job of outlining the key considerations. It’s crucial that businesses and governments balance economic interests with respect for human rights. Very timely topic
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