Monday, March 10, 2008

Keenan: Financial Globalization and Human Rights

Patrick Keenan (Univ. of Illinois - Law) has posted Financial Globalization and Human Rights (Columbia Journal of Transnational Law, forthcoming). Here's the abstract:
In this Article, I develop a model of the enforcement of human rights that attempts to account for financial globalization. I advance two principal arguments. First, I argue that, in practical terms, the traditional approach to protecting human rights, documenting violations of human rights to embarrass states into changing their ways, is becoming much less likely to succeed. This reputational approach, often referred to as naming and shaming, has long been the primary mechanism of enforcing human rights norms. Shaming was sometimes accompanied by a form of economic shunning, with countries who violated human rights norms finding it more difficult to find trading partners in the developed world. The rapid economic growth that is characteristic of globalization, particularly in China and India, has altered this dynamic. Increased competition for the raw materials necessary to sustain economic growth has rendered it more difficult to ignore resource-rich states, even if they are regular violators of human rights. Many states no longer face a powerful incentive to maintain a good reputation for compliance with human rights norms. Second, I argue that as the reputations of states have become less critical, the reputations of corporations have become more important. Two relatively new features of financial globalization have changed the picture and created incentives for firms to act as the watchdogs of other firms. The market for capital is now global. It is only a slight exaggeration to say that firms everywhere are competing for the same investors. Similarly, it is no exaggeration to say that firms from around the world are selling their products in the same markets. Thus, as capital and consumer markets have become more integrated, firms now face powerful incentives to police the human rights conduct of their rivals.