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Turned Inside Out: The Rise of Private, Networked, Data-Centric Governance

  • Author(s): Lollo, Niklas
  • Advisor(s): O'Rourke, Dara
  • et al.
Abstract

The pursuit of more sustainable consumption and production of consumer goods has taken an inside-out turn. Instead of external stakeholders devising carrot-and-stick methods of influence, industry players like brands, retailers, and platforms are increasingly finding value in sustainability governance. Able to collect data streams inaccessible to stakeholders, with the market power to implement rapid changes transnationally, and guided by a vision of Industry 4.0, there has been renewed hope in private solutions to public issues. Firms are arguing that they can leverage their considerable power to achieve what NGOs and governments have struggled to achieve in thirty or so years: comparable and actionable data, market transparency, supply chain and product innovation, and enforcement of labor and environmental standards. Using interdisciplinary methods and novel empirical research, I describe and assess the emerging phenomenon of private, networked, data-centric governance (PNDG). First, I present a literature review of sustainable consumption. I demonstrate that the potential impact of so-called citizen consumption is extraordinarily limited, and argue that structural policies and politics are more likely to yield the necessary transformative change. My empirical work, in turn, focuses on production networks. In chapter three, through data analysis, surveys, and case studies, I examine the Higg Index, an apparel-industry wide initiative to collect and utilize environmental and social data. I find that after ten years, the Higg Index is a scale without a diet—it solves a number of measurement issues, but fails to address root issues of incentives and transparency. In chapter four, I perform a primarily econometric analysis of an intervention in a Thai clothing factory. My analysis demonstrates factory worker compensation formulas can incent higher productivity through higher wages, thereby showing a financially viable path towards living wages. And yet, the project highlights limitations on potential gains absent further external pressure by organized labor, NGOs, governments, or consumers. By offering novel empirical insights, as well as describing the phenomenon of PNDG, my findings inform ongoing policy debates, industry investments, and stakeholder projects. While PNDG holds promise, it needs to be complemented with more external accountability mechanisms that promote stronger incentives.

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