Title: Governance beyond borders
Description: In the 1990s anti-sweatshop activism gave rise to private regulation of global labor standards. The two key elements of private regulation are the codes of conduct adopted by brands and retailers and the social audits of their suppliers. This study examines the impact of this market-driven regulation on garment and footwear factories in Vietnam. Private regulation is intended to set uniform standards for labor conditions across global supply chain. But this study shows that its enforcement is inextricably tied to state regulation, suggesting that market pressures alone do not effect significant changes. In contrast to the view that institutional pressures lead only to symbolic compliance and decoupling in organizations, this study finds some real changes resulting from private and state regulation. Drawing on original data from a management survey of 124 factories and interviews with 111 workers, this study assesses private and state regulations' influence on health and safety conditions, wages and working hours, and worker abuse.

The study concludes that, first, social audits had the strongest effect on health and safety conditions, complementing state efforts to enforce legal mandates. Second, market pressures have not improved wage conditions in Vietnam, which had unrealistically low minimum wage rates, with the role of social audits limited to reducing wage law violations. This finding challenges the claim that private regulation can improve wage conditions in isolation from state regulation. Lastly, social audits have not ameliorated worker abuse. Factories have adopted anti-abuse policies in response to private regulation. But the old managerial assumption--that abuse is a quality-control and productivity management technique--remains largely intact on shop floors. In Vietnam, egregious labor abuse has instead been reduced through worker struggles, media attention, and the intervention of state agents. The findings suggest that the debate on private regulation should direct attention to how its enforcement is entangled in the state regulation of different countries. For local actors, the meaning of private regulation does not lie in the codes of conduct but rather emerges from interactions provoked by state regulation. For better or worse, governance beyond borders cannot leave behind the state.