Note: Industry Self-Regulation: Sustaining the Commons in the 21st Century?

Industry self-regulation has, in general, a lousy track record. Many studies have shown that it is often ineffective unless backed by the power of the state, and that in some cases it serves rather to forestall government intervention or to reduce competition than as genuine self-regulation. Many observers doubt that accelerated private sector regulation could really make a difference against the major public goods issues of our time. Yet we live in a time when many public goods issues are global and global governance mechanisms are at the very earliest stage of development, and in industry after industry leading firms are banding together in an attempt to regulate conduct—designing metrics, relying on independent auditors, and attempting to enforce compliance. Is this a plausible path forward? This note summarizes work in history, political science, and economics—drawing particularly on the work of Eleanor Ostrom—to explore this issue in depth.