Voluntary governance arrangements focusing on responsible business behavior have proliferated over the past decades, and in many sectors of industry, different governance organizations now compete for business participation. This private governance competition has negative conse- quences for the effective functioning of these arrangements. In the literature up until now, optimism prevails on how a process of policy convergence between organizations may come about that would solve some of the prob- lems that arise because of this competition. It is remarkable, however, that in one of the key industries referred to in this literature, the garments industry, convergence is virtually absent. This article explains why this is so and suggests that next to three existing approaches to the evolution and possible convergence of private governance organizations, actually a fourth, pessimistic type should be introduced, taking into account the evolution and perseverance of political difference between interest groups creating and supporting private governance arrangements. (Fransen, supra, abstract, 359).
private governance organizations are a product of political negotiation, their functioning affects the distribution of power among interest groups, and their competition has political consequences as well. Following this line of reasoning the convergence between private governance organizations may be of a different nature than as portrayed by proponents of the discussed economic and idealist– institutional approaches. It is likely that convergence processes are riddled with strategic calculation by both representatives of governance organizations, firms, and societal interest groups. Every possible step of policy adjustment and every effort of policy practitioners to engage may be predated by political strategizing and followed by con- siderations on wins and losses. This dynamic can easily stall efforts at convergence. (Id., 363-64).
Yet it might be possible to understand Fransen's notion of politics inhibiting convergence, as product differentiation in a market for standards where there is no cultural consensus on a "standard product" or even where in the face of consensus on a "standard product" differences in the ability to service standard's products may contribute to a vibrant and quite differentiated market for standards delivery. Even small differences in ideas may produce competitive pressure and reinforce competition. And, of course, where there is little difference in standards, differences in methodology or operation (that is differences in service and expertise on an ongoing basis) may also create incentive toward competition. In a sense, then, the institutionalization of standards producers may not foster divergence in standards so much as competition among standards providers for market share grounded in a variety of factors, only one of which might be the standards themselves. That, perversely enough, might be institutionally efficient, as firms compete both for the production of the "best" standards and the delivery of the "best" standards of implementation on a going forward basis. Product delivery and maintenance, then, suggests not merely politics but the development of an industry the product of which needs to be serviced by competing entities.
Advocates of private labor standards can be found among global unions, labor activist networks, national trade unions, developmental NGOs, and consumer and/or shareholder movements in North America and Western Europe. These groups vary in significant ways in the depth and width of ties with workers on the ground, as well with regard to overall advocacy goals, organizational agendas, and the support base that these groups are accountable to. (id., 367).
First, regarding political characteristics of industry, private governance organizations focusing on garments production have tailored to a fragmented market in terms of sectors and geography, with complex power relations between firms, that could affect preferences for different governance setups. A more homogeneous sector with simpler structures of competition might have been easier as a basis for convergence. Similarly, civil society organizations could have been a greater stimulus for convergence had they been less divided among themselves. Regarding the political characteristics of governance, two things became clear through the issue of control of governance dividing different organizations: First, labor standards governance is about governing an unequal power relation between societal and business actors, meaning that who governs (fairness in procedures) may matter as much as how is governed (effectiveness in methodology); second, groups involved in governance may benefit from permanently exercising certain roles in organizations. Both these aspects severely complicate convergence between organizations, compared to a governance issue that is more easily objectifiable and of which the distributional consequences of particular governance setups are smaller. Finally, the history of different governance organizations shows that many of them evolved in opposition to or after conflict with other governance organizations and their supporters, and to date these supporters may use public campaigns to shame the approaches of governance organizations that are not to their liking. These legacies of conflict and repertoires of contention form a further challenge to convergence. (Id., 383-384).