sustainability, collaboration, and governance: a harbinger of institutional change?

Sustainability, Collaboration,and Governance: A Harbinger

of Institutional Change?

JOHN W. DIENHART AND JESSICA C. LUDESCHER

The root cause of the business and human rights [sustain-ability] predicament today lies in the governance gapscreated by globalization.

John Ruggie

INTRODUCTION

In this essay, we set the stage for four papers presented at aconference on Collaborating for Sustainability: Learning fromFailure and Success held at Seattle University in 2009.1

Two assumptions laid the groundwork for the conference. First,we assumed an undifferentiated demand for a good life.2 Next, weassumed that meeting this demand requires, at the minimum, alivable physical environment, economic opportunity, and a justsocial order: the three pillars of sustainability. We combined theseassumptions with the fact that in many areas of the world, andfor billions of people, one or more of the pillars of sustainabilityare threatened by our de facto world governance systems.3 Theconference addressed how we can close this gap between demandand supply.basr_369 393..416

A conference that addresses closing the gap between thedemand and supply for sustainability could focus on the defects

John W. Dienhart is the Frank Shrontz Chair for Professional Ethics, Director of NorthwestEthics Network and Director of Albers Business Ethics Initiative, Invited Fellow, EthicsResource Center, Albers School of Business and Economics—Management, Seattle University,Seattle, WA. E-mail: [email protected]. Jessica C. Ludescher is an Assistant Professor ofPhilosophy, Seattle University, Seattle, WA. E-mail: [email protected].

Business and Society Review 115:4 393–415

© 2010 Center for Business Ethics at Bentley University. Published by Blackwell Publishing,350 Main Street, Malden, MA 02148, USA, and 9600 Garsington Road, Oxford OX4 2DQ, UK.

of the government, business, or civil society sectors, and recom-mend changes to each sector. Another way to address closing thisgap is to focus on how these sectors can and do collaborate tosolve sustainability problems. As the title of the conference indi-cates, we focused on collaboration. We did not want a conferencethat simply sang the praises of sustainability and collaboration,so we actively sought submissions that described failure as wellas success. Furthermore, when submissions focused on success-ful projects, we urged presenters to discuss the obstacles andhow the projects surmounted them. Over 50 presenters fromthe United States, the United Kingdom, Canada, and Central andSouth America analyzed how cross-sector collaborative projectsaddressed the tripartite view of sustainability. Many of thesepresenters described how difficult sustainability issues are, andsome encountered disappointing failures. Several were practitio-ners and did not submit academic papers.4 Of the academicpapers that were submitted, we are honored to work with Busi-ness and Society Review to present four high-quality papers thatillustrate the breadth, depth, and complexity of cross-sectorcollaboration.

Our research for this introductory piece on cross-sector col-laborative partnerships led us to examine the governance of theseprojects, which is very different from organizational governance. Ifthese patterns of governance grow and persist, we hypothesizethey could alter the institutional patterns of governance on a largescale. We support this hypothesis by noting parallels between ourtime and historical periods of substantial institutional change.

FRAMING THE ISSUE OF SUSTAINABILITY

The globalization of market economies, along with climate changeand the concomitant increase of environmental toxicity, the ubiq-uity of poverty, inequality, and political oppression, “threaten thecapacity [and legitimacy] of contemporary institutions to governand lead” (Senge et al. 2006). All of these problems fall under thetripartite rubric of sustainability, defined as the pursuit of eco-nomic development, environmental health, and social justice(Dienhart 2004; Rushton 2002). There is growing consensus thatthese three issues must be addressed together, as they are part

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of an interdependent system (Dienhart 2004; Senge et al. 2006;Dienhart 2010). Let us consider one way in which ecologicalissues, social justice, and economics are intertwined: Environ-mental toxicity disproportionately affects the poor, a problemsometimes called ecological injustice. Take the South Bronx as anexample, which is one of the poorest areas of New York. Pollutionfrom trucks and industry, along with illegal dumping, made thisarea a dangerous place to live, with asthma and other illnessesreaching much higher rates than normal. To solve this environ-mental problem, the poor need political and economic voice(Dienhart 2004). Pulling together the three sectors resulted in asuccessful strategy devised by Majora Carter, a MacArthur GeniusGrant recipient, as she worked to improve conditions. She formeda civil society organization (CSO), Sustainable South Bronx, whichengaged the city; the federal government; and business to improvethe quality of the environment in the area, and hence the healthof its citizens (TED 2006). In this case, cross-sector partnershipshelped to address the social justice and environmental dimen-sions of sustainability, as well as the economic one.

To understand contemporary institutions we divide them intothree sectors: government, business, and civil society organiza-tions5 (Aoki 2000; North 2005). Given this division, we can statethe problem as follows. No one sector has the capacity or legiti-macy6 to address the tripartite challenges of sustainabilitybecause these challenges cross sectors. The pressure for entre-preneurs and leaders in each sector to address these problemsforces them to work together in either bi- or tri-sector collabora-tions or as we will call them, cross-sector collaborative partner-ships (CSCPs).

Unfortunately, these three sectors are defined by conflictingideologies, different logics, and mutual distrust of one another.(Friedland 1991; Selksy and Parker 2005; Forthcoming). There aretwo general strategies to resolve the difficulties seemingly inherentin any attempt for these sectors to work together. One strategyis to have one institutional sector lead and direct the other two.This approach streamlines governance, since one sector is incharge, but may not solve the problem of cooperation on accountof the distrust between the sectors. Another strategy is for thesectors to work together collaboratively on projects in whichthey hold shared interests. Shared interests can be the basis for

395DIENHART AND LUDESCHER

cooperation, but collaboration between sectors raises structuralquestions about governance.

The first strategy, in which one institutional sector dominatesresource allocation, has a long and prominent history. In WesternEurope, for example, the Church was arguably the lead institutionafter the fall of the Roman Empire. In 1648, The Peace of West-phalia established national government as the lead institution.Following World War II, business arguably becomes the lead insti-tution, as multinational corporations acquire wealth and prestige(Phillips and Margolis 1999), and concurrently incur virulent criti-cism for their expanded power in global society. The control ofresource allocation can be illustrated with a brief look at prominentarchitecture through the ages. From about 400 to 1600 CE, cathe-drals, such as Chartres, exemplify church dominance. From about1600 to the 1940s, government built the great capitals andpalaces, such as Versailles. After World War II, buildings like thePetronas Towers and the former World Trade Center illustratebusiness dominance (Phillips and Margolis 1998).

In addition to this empirical basis for viewing one institution asbeing in the lead, there is also theoretical and ideological supportfor this premise. Theorists grant leadership to different institu-tions on the basis of distinct sociopolitical economic worldviews.Libertarians like Milton Friedman favor business and marketsolutions (Friedman 1970). Market mechanisms fail, according tothis line of thought, when government or CSOs interfere withbusiness operations via regulations or media pressure. Advocatesof a free market acknowledge the need for a minimal governmentand the right of individuals to create CSOs. However, they arguethat government and CSOs should not interfere with marketforces. Those like Georg Kell, Executive Director of the GlobalCompact, on the other hand, favor intergovernmental coordina-tion of business, government, and CSOs. They point out thatcorrupt businesses can interfere with these solutions, as canCSOs that may represent interests that want to enrich themselvesat the expense of others. Economists like Joseph Stiglitz supportthis intergovernmental approach because they believe that infor-mation asymmetry and bounded rationality make market self-correction an unrealizable ideal (Stiglitz 2002). Finally, there arethose, like Paul Hawken, who argue that CSOs are coming to be,and ought to be, the dominant institutional sector (Hawken 2007).


They argue that CSOs should set the agenda that business andgovernment should follow. Theorists like Habermas (1984) wouldsupport this approach because they believe the values of everydaypeople are represented in the conversations CSOs are able tosponsor and encourage. Hierarchies in business and governmentsubvert the process of public discourse. In each worldview, thepreferred sector is perceived as relatively flawless, and one thatonly fails in governance because of interference from organiza-tions in the other sectors.

The other strategy for organizations in different sectors to worktogether is through collaboration to pursue shared interests. Col-laborative projects do not have a single institutional leader,though sectors may lead different aspects or phases of the project.This strategy also has a long history, but is less recognized. Earlyin the second millennium, those in commerce joined with feudallords in Western Europe to create alliances that eventually led tothe nation state (Giddens 1986; North 2005). In the seventeenthand eighteenth centuries, privateers joined with governments topursue common objectives (Mabee 2009). It should be noted thatin each of these cases, one sector, the government, eventuallycame to dominate the others. More recently, we have seen anincreasing number of collaborations between business, govern-ment, and CSOs (Selksy and Parker 2005; Forthcoming; Senge2008; Senge et al. 2006). As we said, CSCPs are characterized bythe fact that no one sector dominates the project. Whether onesector will eventually dominate is a central issue we will discusslater in the paper.

COLLABORATING FOR SUSTAINABILITY: LEARNINGFROM FAILURE AND SUCCESS

The reliance on CSCPs to promote sustainability was the guidingprinciple of the conference held at Seattle University in 2009,Collaborating for Sustainability: Learning from Failure and Success.The four papers from the conference that follow this one eachrepresent a different level of analysis. “Preventing GlobalWarming: The United States, China, and Intellectual Property,” byChris K. Ajemian and David McHardy Reid, discusses how fearof intellectual property infringement is restraining the use and


distribution of technology aimed at reducing global warming. Theysuggest a novel solution, inspired by the Marshall Plan, whichhelped reconstruct Europe after World War II. Their “CleantechMarshall Plan” involves collaboration between business, govern-ment, and civil society organizations. The second paper, “Environ-mental Legislation and Harms to Remote Resource-BasedCommunities: The Case of Atikokan, Ontario,” by A. Scott Carson,exposes the tension between the ecological and social justicedimensions of sustainability by showing how environmentallysound legislation can displace marginalized populations. Carsondiscusses a collaborative plan in Canada between business, gov-ernment, and civil society organizations that reduces the harmfulsocial and economic impacts on these marginalized populations.The third paper, “Expanding Prosperity by Becoming an Eco-Municipality,” by Jane Silberstein describes how eco-communitiesinvolve collaboration between the three sectors. She argues thatan eco-community adopts ecological and social justice values inconcert with The Natural Step. Eco-communities will work only iforganizations in each sector take the other sectors’ values seri-ously, and implement them according to their own sector’s capac-ity. For example, businesses adopt the ecological standards andsocial justice standards we might typically associate with CSOs.On the other hand, CSOs come to understand the importance ofvalue creation in the business sector as measured by profit.Government then sees its role as a convener and enabler ofecologically sound principles, as well as profit making. In theconcluding paper, Phillip L. Thompson describes a project toprovide clean water to communities in developing nations byworking with government, business, and civil society organiza-tions. While the project that Thompson discusses is at a verymicro scale, the organization with which Thompson is affiliated,Engineers without Borders, is working on small projects like thesein thousands of places.

Each paper discusses sustainability problems that can betraced to deficiencies in one or more of the three sectors. It isnoteworthy that the papers do not argue for radical changes tothe sectors themselves to solve these problems, that is, they donot call for government reform in the form of more or less regu-lation or for business to ignore profit. Instead, their solutions arebased on collaboration between the sectors. In what follows, we


argue that these cross-sector collaborative projects to promotesustainability, and specifically their governance, are indicators ofsubstantial change in the way these sectors govern our lives. Todevelop this argument, we divide the rest of the paper into fivesections. First, we examine where in institutional space CSCPsare governed. Second, we examine specific features of CSCP gov-ernance, and argue that collaborative governance will come toprevail over structures favoring single sector dominance. Third,we argue that the growth of CSCPs and collaborative governancehas the capacity to transform the way business, government, andCSOs—our de facto world governance systems—influence ourlives. This change can be as important as, but not isomorphicwith, the shift in Western Europe from the religious/feudalnetwork to the nation state. Fourth, we discuss how the papersfrom the conference presage what some of these changes maylook like. Fifth, we conclude by discussing the limitations of ourargument and provide suggestions for further research.

SUSTAINABILITY, CSCPS, AND GOVERNANCE: A NEWINSTITUTIONAL SPACE

To date, most research on CSCPs has focused on product inno-vation, rather than innovations in governance (Moore and Hartley2008). Our focus is on how CSCP governance combines the capac-ity and legitimacy of the different sectors to solve complex sus-tainability problems. Selksy and Parker (2005; Forthcoming) arguethat cross-sector collaborative relationships represent a revolutionin governance. Relying on Moore and Hartley (2008), part of whatis revolutionary is that governance of CSCPs is not “housed” in anyone of the collaborating organizations or sectors. As Moore andHartley say, the governance occurs “above” the organizations.CSCP governance is separate from the governance of the collabo-rating organizations. To interpret what Moore and Hartley mean by“above,” we follow Mohr and Guerra-Pearson, who argue thatinstitutions exist in logical space. Logical space is the way inwhich institutions relate to each other (Mohr and Francesca forth-coming). Another revolutionary aspect is that no one sector con-trols the governance. In different phases or aspects of the project,of course, one sector may provide more capacity or legitimacy than


others. Overall, though, no one sector dominates. Each sectorneeds the other, and each can foil the project by withdrawing.

Domestic Level

To illustrate the importance and nature of CSCP governance,Moore and Hartley (2008) discuss two projects: a successful CSCPinvolving the New York City Parks Department and an unsuccess-ful CSCP involving Child Protective Services in Boston. We discusstheir examples in turn.

When the New York City Parks Department ran out of fundingto maintain and improve many of the small neighborhood parks inits domain, they turned for help to private civic groups composedof wealthy individuals. The Parks Department had the authorityand legitimacy to maintain the parks, but lacked the financialcapacity to do so. The private sector groups had the financialcapacity to improve the parks, many of which lay in their neigh-borhoods, but not the authority or legitimacy. The Parks Depart-ment joined with the civic groups to improve the smaller parks,with successful results. The Parks Department had to allow indi-viduals who are not part of the city government to participate indecision making and to adopt the aesthetic values of the civicgroups. The civic groups had to relinquish control of improvementprojects and agree to the governmental norms of public access tothe areas they were improving. Each side had to adopt centralnorms of the other and each had to abide by the core decision-making processes of the other.

In what sector did this governance occur? Our answer, follow-ing Moore and Hartley, is that it occurred in neither of thecollaborating sectors. Individuals in the civic groups did not jointhe government sector and individuals in the Parks Departmentdid not join CSOs. Rather, a new institutional space emerged(Considine and Lewis 2007) as members from both sectors con-vened to govern the shared project.

Consider a cross-sector collaborative project that did notsucceed. The Massachusetts Department of Child Protection Ser-vices (CPS) was being attacked for not responding appropriatelyto immigrant populations in Boston. To resolve this problem, CPSjoined with CSOs representing and composed of immigrantpopulations. CPS then handed off child protection responsibilities


to these CSOs without providing any oversight. In a sense, CPSdeputized these civic organizations, granting them legitimacy.They also gave them the financial means, one aspect of capacity,to carry out these duties. As it turned out, the civic groupspossessed neither the organizational capacity nor members withthe requisite skill sets to carry out the job. Children were harmed.There was no governance mechanism, no institutional space thatbrought together CPS and civic group members to oversee theprojects. CPS treated this program as a simple market transac-tion, much like purchasing computers. When the governmentpurchases computers from a private company, it sets up thespecifications, acquires the computers, and pays the bill. Noinstitutional space was created for governance, which all butguaranteed the failure of the project in this case.

International Level

The Sustainable Food Lab’s (SFL) mission exemplifies the tripar-tite notion of sustainability.

The mission of the Sustainable Food Lab is to acceleratethe shift of sustainable food from niche to mainstream.

We define a sustainable food and agriculture system as onein which the fertility of our soil is maintained and improved;the availability and quality of water are protected andenhanced; our biodiversity is protected; farmers, farmworkers, and all other actors in value chains have livableincomes; the food we eat is affordable and promotes ourhealth; sustainable businesses can thrive; and the flow ofenergy and the discharge of waste, including greenhouse gasemissions, are within the capacity of the earth to absorbforever. (SFL 2010)

Its members include governments, businesses, and CSOs(Senge et al. 2006; SFL 2010). Each sector lends capacity andlegitimacy needed to fulfill SFL’s mission. Governance occurswithin the auspices of SFL, so no new institutional space isneeded. While governance occurs within SFL, it focuses on themission and the projects, not the continued existence of theorganization itself. In fact, if the governance of SFL found thatSFL was unsuited to its mission and projects and could not be


repaired, it would disband SFL to form a new organization. More-over, there is a distinction between the governance of the SFL andthe governance of its projects. For example, SFL helped coordi-nate a project to deliver quality French Beans to Costco whileincreasing farmer income and protecting the environment. Thiswas a CSO and business sector collaboration. Farmer income andland management improved across the board, and Costco gotquality green beans (Lundy 2007). The governance of the project,which was often complex and involved time-sensitive matters,was in the hands of representatives from the collaboratingorganizations/sectors. Once again, we see an institutional gover-nance space emerge.7

The Chad–Cameroon pipeline CSCP project to mitigate the“resource curse” is an example of project and governance failure.The resource curse refers to underdeveloped countries that haverich material resources but remain poor despite the wealthcreated by extracting their resources. When planning an oil pipe-line project through Chad and Cameroon, these two countries,along with Exxon Mobile, Petronas, and the World Bank, set upan agreement that designated a percentage of the revenues forbuilding roads, schools, hospitals, and other infrastructure inChad and Cameroon (Werhane et al. 2003; Hargrave 2009; Loumet al. 2009; Dienhart 2010). The World Bank set up a group calledthe International Advisory Group (IAG) to oversee the project andreport to the World Bank. Unfortunately, the IAG had neither thecapacity nor the legitimacy to govern effectively. None of themembers of the IAG were actual stakeholders, and they had nopower to disburse or restrict funds. Chad played by the rules forthe first few years of the project, but by 2009 had formallywithdrawn from the project so the government could use thefunds to buy arms (Loum et al. 2009).

We have argued that sustainability presents challenges that noone sector can address successfully alone. This requires sectorsto work together collaboratively, what we have called CSCPs. Wehave also argued that CSCP governance occurs in a largely unrec-ognized institutional space. We have given two examples of thisinstitutional space. We do not take these examples alone to provethe existence of this institutional space. Our argument is concep-tual, not empirical: when there is a collaborative project thatinvolves different sectors, and there is a governance mechanism


to direct it, this governance mechanism does not occur in any oneof the sectors. We take these examples to instantiate the vari-ables, so to speak, of the conceptual argument.

The two CSCPs that were successful made use of collaborativegovernance that focused on the success of the project. The twoCSCPs that were not successful were marked by the absence ofgovernance or weak governance by one sector. To be clear, we donot take these examples to prove that collaborative governance isa necessary or sufficient condition for successful CSCPs. Theremay also be examples of successful CSCPs characterized by singlesector dominance. However, there are compelling reasons, whichwe discuss next, to believe that collaborative governance is animportant determinant of CSCP success.

A NEW, COLLABORATIVE GOVERNANCE MODEL

While different projects will have different needs, Moore andHartley (2008) argue that the cross-sector collaboration has fiveinnovative aspects. If so, then governance should be structuredto reflect these aspects. For the purposes of this paper, weaccept the features for which Moore and Hartley argue, and usethem to generate five hypotheses about successful cross-sectorgovernance.8

We hypothesize that successful cross-sector collaborative gov-ernance will have the capacity and legitimacy to perform fivetasks:

1. Monitor the network of cross-sector inputs and outputs (asopposed to each sector monitoring the inputs and theoutputs salient to its own sector).

2. Evaluate the efficiency of how the sectors contribute andintegrate resources (financing, materials, human capital, andother inputs) to promote the project and redirect them whennecessary.

3. Use the members’ capacity and legitimacy to convene,exhort, or redefine rights and responsibilities.

4. Distribute the right to define and judge the value of what isbeing produced.

5. Evaluate and alter the governance and the project in termsof justice, fairness, and community well-being.


Let us briefly review the domestic and international cross-sector collaborations discussed above in light of these governingfeatures. In the park renewal project in New York City, all fivetasks were carried out. The failed collaboration between Massa-chusetts CPS and civic groups needed governance, but noneexisted. Had governance emerged, the five tasks would haveprovided a blueprint. The governance of the Sustainable Food Labwill have to pay attention to tasks 1, 2, and 5 to develop techni-cally feasible projects, but implementing these projects on a largescale will require government and business to focus on tasks 3and 4. Finally, the governance of the Chad–Cameroon pipelineproject had 1 and 2, but lacked the others. The most obviousweakness was the failure of task 3, since Chad was not willing toalter its rights to the pipeline funds that had been set aside.However, focusing on this aspect of the Chad–Cameroon Pipelineproject could mislead us into thinking that the solution lay simplyin altering power dynamics. The point of designing effective cross-sector governance, however, is not to let problems get to the pointwhere one of the members unilaterally can direct resources.

We argue that collaborative governance, not single-sector gov-ernance, is more likely to fulfill these five tasks. Single-sectordominance could take at least two forms. Board members could beselected exclusively from one sector, in which case the dominanceof that sector would remain unchallenged. Alternatively, boardmembers could be from some or all of the participating sectorswith one sector having ultimate power. One question about single-sector dominance is whether sectors would join a project in whichanother sector controlled the resources. Assuming that sectormembers reflect the mission and values of the organization/sectorfrom which they come, it would seem risky to let anothersector control the project. As we have stated, government, busi-ness, and CSOs operate from different ideologies and logics, andrelationships between them are characterized by mutual distrust.

If different sectors did join a project in governance that waspopulated with only those from a single sector, there are reasonsto believe it would be ineffective. While there are always excep-tions, such a governance structure, we suspect, would havetrouble with task 1, getting timely and salient information aboutthe network of inputs and outputs. It may also lack the skill setsto analyze the information, task 2. The other feature of task 2 is


to use information to redirect the project, which combines legiti-macy and capacity. How likely are independent sectors to imple-ment policies that have been mandated by a different sector?Without effective governance around tasks 1 and 2, the otherswill fail. The other form of dominant governance, the form thatincludes members from different sectors, could also suffer frominformation problems, but for different reasons. In contentiousissues, the different sectors could have incentives to shape andwithhold information so as to influence the dominant sector. Thisproblem puts the other tasks at risk. Of course, there are ways todesign governance to reduce these risks. However, in collaborativegovernance, the risks associated with having a lead sector arereduced. This is not to say that collaborative governance wouldnecessarily preclude concealing or manipulating information topromote specific agendas that do not promote the project; it justremoves one incentive for such sector selfishness. There are stillimportant design issues that must be solved if a collaborativeboard is to implement all five tasks successfully. Discussing thesespecific design issues is beyond the scope of this paper.

For all these reasons, we hypothesize that cross-sector part-nerships with collaborative governance schemes will come toprevail over ones characterized by single-sector dominance.

Institutional Change, Then and Now

The CSO community has grown dramatically. While it is hard toget accurate numbers, Senge et al. (2006) states that there are 2million CSOs in the United States with another 2 million in India,and that the UN has over 29,000 registered NGOs. Along with thisgrowth, there has been an increase in CSO partnerships withbusiness and government (Selksy and Parker 2005; Forthcoming).The World Bank now collaborates with CSOs on 81% of itsprojects (World Bank 2010). These data suggest that at the opera-tional level, the divide between sectors is beginning to be bridged.As leaders of organizations in different sectors realize they lackeither the capacity and/or legitimacy to fulfill their organizationalmandates, they seek to collaborate with organizations in differentsectors. As we argued above, the collaborative governance hasmany advantages. Collaborative governance does not take place innor is controlled by any one sector. If such collaborations become


more common, they can change the institutional network of gov-ernance itself (Giddens 1986; North 2005; Selksy and Parker2005; Forthcoming). To understand institutional change in moredetail, we turn to the work of Douglass North and AndrewGiddens.

North (1990) argues that organizations, or more specifically,entrepreneurs and leaders, are the main drivers of large-scaleinstitutional change. North supports this thesis, in part, byshowing how threats to the feudal/religious governance networkin Western Europe resulted in the creation of the nation state. Weargue that the factors that threatened the feudal/religious gover-nance network a thousand years ago are remarkably similar tofactors that threaten our current governance networks.

In Western Europe, between the tenth and seventeenth centu-ries, there was a tremendous increase in commerce and trade,large demographic changes (rapid increase with new agriculturalmethods followed by rapid decrease with a series of plagues), andnew technology, such as the printing press and instruments tomake shipping more efficient. These pressures, according to Northand to Giddens, outstripped the capacity of the religious/feudalinstitutional networks to govern. North focuses on how commercein the religious/feudal network has high transaction costs.Guilds, trading companies, the newly developing cities, and largerand more innovative feudal lords began to collaborate in waysthat led to the development of the nation-state (Giddens 1986).The nation-state provided security, a monetary system, and otherinfrastructure that accommodates banking and insurance, greatlyreducing transaction costs. In sum, the governance structureswere local but the problems were not. The nation-state evolved tomanage the expanding scope of issues.

As we suggested above, the pressures on the religious/feudalgovernance network bear an uncanny resemblance to the prob-lems we face today: growth of commerce and trade, substantialdemographic changes, and new technology. In addition, we nowhave another, quite daunting, pressure: local and global environ-mental threats. We discuss each of these factors briefly.

Based on WTO data, the volume of international trade in manu-facturing has grown from a base unit of 1 in 1948 to 45 in 2001(EEA 2010), or to put it more dramatically, world trade hasincreased 4,500% since the end of World War II. The world popu-


lation has more than doubled since 1950, with 60% of the increaseoccurring in Asia, India, and the Middle East (Vaughn 2010). TheWorld Meteorological Organization reports that, since recordkeeping began in the 1850s, 2000–2009 was the hottest decade,the next most recent decade the next hottest, with this patternrepeating back to 1850 (WMO 2010). The news has been repletewith the bad effects of global warming on droughts, desertification,hurricanes and typhoons, and flooding. Whether or not globalwarming is caused by human activity and whether or not a con-nection can be established between global warming and specificweather events, the effects of these problems are felt keenly bybillions of people, exacerbating political instability and economicinequality. Add to these problems inexpensive international com-munications and social networking that allow people to commu-nicate with one another about these problems, accurately andinaccurately, within minutes. Virtual interest groups spring up,again with very little cost to the members, and pressure business,government, and CSOs for solutions. The combination of thesefactors creates pressures, as Senge put it, that threaten the capac-ity and legitimacy of our current networks of governance. In sum,our problems are global but our governing systems are not. Gov-ernance needs to adapt to manage the expanding scope of issues.

While we cannot predict the course of institutional change, wecan map out some emerging proposals and trends. Globalizationand its attendant sustainability challenges have promptedextreme responses, on one side to call for a more rapid integrationof nations into a single global society, on the other to retract fromglobal integration into protectionism or localization. Those whofavor more globalization argue about how globalization shouldproceed, via political and planned mechanisms or economic andmarket mechanisms. Of those who favor political mechanisms,some advocate more national governmental control of globaliza-tion processes. Others propose the democratization of and height-ened power for intergovernmental organizations like the WTO.Some even advocate a world government. Those who are ideologi-cally committed to market mechanisms support the furtherweakening of government except to protect property rights, andseek to place control of globalization processes in the hands ofbusinesses, specifically multi- and transnational corporations. Allof these trends fall under the rubric of single-sector dominance.


The trend toward increasing the scope of political mechanismsvia national or supranational government bears the most resem-blance to the nation state response to the feudal-religious insti-tutional governance structure analyzed by North. Perhaps theclearest example of success with this trend is the continuingintegration of the once independent nations that now make up theEU. While it might be tempting to apply North’s research on theformation of the nation-state form of governance to today’s emerg-ing global society by suggesting that a world government or moreIGOs are inevitable, this conclusion is not warranted. The impli-cation of North’s findings is not that bigger, more expansivegoverning institutions are better, but rather that new forms ofgovernance emerge once the incentive structures of the old onescease to enable entrepreneurs and leaders to fulfill their goals. Itis possible that a world government will facilitate institutionalproblem solving in ways that are superior to those provided by anational government. But supranationalism is not the only, ormost viable, trend developing today.

The least recognized and valorized trend is marked by theexpansion of collaboration between organizations among the threeinstitutional sectors defining the second trend, discussed aboveas an emerging strategy for cross-sector engagement. The papersfrom the conference illustrate these collaborative projects at theglobal, national, and local levels. But, even when the projects arelocal, the collaborating partners can be international.

WORKING COLLABORATIVELY FOR SUSTAINABILITY

We began by assuming that people have an undifferentiateddemand for living well and that the tripartite view of sustainabilityis a necessary condition for meeting this demand. We added tothese assumptions the fact that the demand for living well isunmet for many, threatening the capacity and legitimacy of con-temporary institutions to govern and lead. Each of the papersbelow discusses how CSCPs can help reduce these threats.

The paper, “Preventing Global Warming: The United States,China, and Intellectual Property,” by Ajemian and Reid, discusseshow fighting global warming is limited by the problem of localpatent laws and the protection of intellectual property rights for


green technology or Greentech. Their “Cleantech Marshall Plan”involves collaboration between business, government, and civilsociety organizations to develop an organization that would createincentives for sharing and creating more Greentech IPR, includingcompensation for lost revenues to IPR holders because of patentinfringement. They argue that business, government, and NGOshave a common interest in solving these problems, a centralingredient in making CSCPs work. While Ajemian and Reid do nottalk about the governance of this project, we would argue that forit to have the capacity and legitimacy to fulfill its mission, relevantstakeholders from all sectors should design and participate ingovernance so all five cross-sector collaborative governance tasks,described above, can be fulfilled.

In “Environmental Legislation and Harms to Remote Resource-based Communities: The Case of Atikokan, Ontario,” A. ScottCarson addresses the problem of national and global well-beingcreating localized harm. Carson argues that we should not let thisharm occur in our attempts to promote the greater good, anddescribes a tri-sector collaborative project that embodies thatprinciple. The organizations that participated shared a commoninterest, but not always common motives. While people and theorganizations/sectors they represent are multiply motivated, wecan say with some confidence that government wanted to be, andwanted to be viewed as, fair and just. Business saw market andproduct development opportunities, plus a way to gain sociallegitimacy. Universities saw research opportunities and new waysto connect with their important constituencies. A CSO, AtikokanBio-Energy Research Centre (Carson uses the term NGO), wasestablished, which served as a convener and governance mecha-nism, much like the Sustainable Food Lab, discussed earlier, forprojects that would help affected communities find new ways tosupport themselves. These new projects would themselves have tomeet the standard of sustainability. While the CFO was formallygoverned, the participants, who had to report regularly to theconvening CSO, governed the projects. Carson’s description ofthe Atikokan Bio-Energy Research Centre is consistent with thefive tasks of effective cross-sector collaborative governance.

The paper “Expanding Prosperity by Becoming an Eco-Municipality” by Jane Silberstein describes how eco-communitiesinvolve collaboration between the three sectors. While eco-


communities are by definition local, it is important to rememberthey are not defined by standard geopolitical boundaries. Onceagain, even at a small scale, the premise is that standard insti-tutional boundaries do not accommodate projects to meet theundifferentiated demand of living well. While Silberstein does notdiscuss governance per se, she does emphasize the importance ofcollaboration, as well as the necessity of shared norms of honestyand fairness among the participants, which support the validity ofthe five tasks of collaborative governance.

In the concluding paper, Phillip L. Thompson discusses how heled a student chapter of Engineers Without Borders to provideclean water to communities in Thailand and Zambia. By neces-sity, he and his team had to work with government and business.The governance of the project is informal, much like the parksexample in New York discussed above. Thompson, his students,on-site citizens of the countries, and local businesses have tomake decisions on the fly. While many of these decisions areoperational, individuals have to ensure that their activities alignwith the overall strategy and mission of the project, as well thevalues and missions of the participating organizations/sectors. Inessence, governance issues can arise at any moment. EngineersWithout Borders is working on small projects like these in thou-sands of places with the kind of governance just mentioned.

Going Forward

The conference, the papers that follow, and the research for thispaper itself ground our view that we are standing at the thresholdof history in which a major transformation in governance is takingplace, not unlike the formation of the nation-state analyzed byNorth and by Giddens. We posit that new governance paradigmsemerge when existing governance structures lose the capacityand/or legitimacy to carry out their institutional objectives. Thesustainability crisis has issued in a state of affairs where threetraditionally independent sectors, government, business, and civilsociety, have run adrift of their separate incapacity to cope withthe tripartite aims of sustainability. This loss in capacity hasoccurred in tandem with and even led to a demise in the legiti-macy of institutions in each of these three sectors. To solvesustainability problems, a plethora of organizations across sectors


have formed collaborative partnerships that have been marked bya new governance paradigm. This trend marks an alternativestrategy to one favoring the dominance of one particular sectorover the others. We hypothesize that collaborative governance willcome to prevail in CSCPs due to superior performance of gover-nance tasks.

The new governance paradigm is one characterized by afunctional, project-oriented approach that occurs in a new insti-tutional governance space. Ownership, defined in terms ofidentification and investment in the objectives of the project,becomes shared and malleable, as old projects give way to newones. Cross-sector cooperation around projects is possible, as wehave shown and as the ubiquity of CSCPs testifies. However,we do not want to underestimate, as Gioia (1999) points out, thedifficulties of sectors with different ideologies working together.Analysis of such struggles, as well as models to resolve theseproblems, is one area for more research.

This paper has proceeded primarily from an inductive analysisof a variety of case studies in cross-sector governance. From theseobservations and the observations of other theorists studyingcases in cross-sector governance, we have noticed a new para-digm emerging. This paper has provided a rudimentary theoreticalmodel for analyzing this paradigm. We have looked mainly atissues of effectiveness, at what has and has not worked, and in sodoing attempted to characterize the features of successful cross-sector governance.

A more full-fledged study would conduct broad empirical inves-tigations of cross-sector partnerships to see if the features wehave identified hold more generally. In addition to evaluating theeffectiveness of instances of this new governance model, we willneed to examine the justice of supplanting single institutionaldominance with cross-institutional governance. History hasshown us that control by any single institution has always led tosome measure of inefficacy and injustice. The failure of any insti-tution to lead perfectly does not entail that all of them takencollectively will do any better at solving world problems. In fact,similar to the critiques of stakeholder theory made by Jensen(2010), Boatright (2006) and others, handing power over to allgroups may in the end lead to inaction and power mongering.This open state of affairs may issue in a new form of anarchy. If


we are not to enter a new “state of nature” scenario with respectto justice, then we will have to be quite careful about the way inwhich power will be adjudicated and traditional justice concernsserved.

Future research will need to proceed along both empirical andtheoretical lines. Empirically, as we have said, more comprehen-sive studies need to be conducted of cross-sector partnerships.Studies can compare and evaluate partnerships in terms of thenumber and variety of sector components, the industries or typesof projects carried out, the regions or cultures in which theyoccur, and the degree of internationalism involved. Theoretically,models need to be elaborated to determine what counts as effec-tiveness and what counts as justice in this new cross-sectorgovernance paradigm. To help us with question of justice, weneed to explore the relationship between sustainability and ethics.Is one a subset of the other? Do they overlap? Gomis et al. arguethat sustainability is a proper subset of ethics (Gomis et al. 2010).In addition, anarchist studies will have to be applied to an erathat permits the continued devolution of the nation-state.

NOTES

1. We would like to thank Emily Marshall, Aaron Hayden, and AlpTurkman for conversations and research that helped us immensely withthe paper. Marc Cohen read the penultimate draft and made manyhelpful suggestions. Any and all defects are solely ours.

2. This undifferentiated demand becomes differentiated in differentcontexts. The particular demands for living well in a hunter-gather tribealong the Amazon will be different from the specific demands for livingwell in New York City.

3. It may seem odd to call the hodgepodge of government, business,and civil society actors a system. It is certainly not a planned or consis-tent system. It grew over time and can change significantly in a shortperiod. Consider how the United States changed its global relationshipsafter 9/11. Still, if an actor in a sector wants to implement a projectsuccessfully, they need to understand and work with the governancesystem as they find it at the time and as it will develop. For sustainabilityissues, this system will usually include government, business and CSOactors and organizations.


4. For the agenda, see: http://www.sustainability.org/.5. We include under the rubric of civil society organizations NGOs, not

for profits, and faith-based organizations.6. By capacity we mean resources to complete projects or attain goals.

By legitimacy, we mean “. . . consistent with cultural beliefs, norms, andvalues that are presumed to be shared by others” Johnson et al. (2006).

7. Information on SFL is a result of print sources, SFL web page, andemail correspondence with Don Seville Co-Director of SFL.

8. The five features that Moore and Hartley cite focus on governmentbeing a central actor. They are: bursting the boundary of organization/creating network-based production systems; tapping new pools of financ-ing, material resources and human energy; exploiting government’scapacity to convene, exhort, and redefine private rights and responsibili-ties; redistributing the right to define and judge the value of what is beingproduced; evaluating the innovations in terms of justice, fairness, andcommunity building, as well as efficiency and effectiveness. We havetaken this list and generalized it so that it can apply to any one sector.

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sustainability, collaboration, and governance: a harbinger of institutional change?

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