QLLC-STATION

The article looks at the evolution of the Roundtable for Sustainable Palm Oil (RSPO) as it enters a tumultuous time in its development. While a very large library has been written looking at the rise and impact of private standards, or civil regulations, very little has studied the diverse internal and external organizational interests that collectively produce the ambition and scope of individuals’ civil regulations. The article builds on the institutional work perspective by considering the diversity of interests involved in institutional creation, linking micro-level concerns of institutional workers engaged on a range of issues with macro-level outcomes in the field of sustainable palm oil. Developed from research conducted at the European Roundtable for Sustainable Palm Oil in Milan (June 2016), the article’s key findings were the following:

 Incumbent firms may be motivated to support strong environmental civil regulations if these produce new markets or control market entry.

 As powerful actors within multi-stakeholder initiatives are often motivated by reputational considerations, there is a risk that civil regulations increase costs of monitoring and transparency to protect reputation at the cost of locking small producers out of the market.

The paper maps the tension between rigor and inclusion that characterizes debates within RSPO and similar PES-like transnational standards. By isolating these tensions, the article proposes a simple verbal model that translates the specific interests held by organizations into outcomes at the level of the standard that either promote rigor or inclusion. A series of policy suggestions result from the model, with the clear understanding that further research must be directed to testing its predictive capacity and generalizability. In essence, the model developed in the paper can be used to address questions about the conditions under which different actors will engage in the institutional work of increasing rigor or expanding the scope of an emerging institution, and with what effects.

57

Visual Abstract

Advancing the Payments for Ecosystem Service Discourse Through Institutional Theory

Research Problem: Design for Payments for Ecosystem Services (PES) programs have very “thin” models of institutions, largely derived from transaction cost economics, which leads would-be institutional workers to adopt a “field of dreams” approach to institution building: “if you build it, they will come.”

Research Question: How are institutions in support of PES

created? Article Research Question

A1) The Mundane Work of Building Payments for Ecosystem Services

How has institutional emergence figured in the PES literature to date, and with what effects?

A2) Institutional Working as Institutional Networking: Building Transnational Anti- Deforestation Efforts

What kinds of institutional work are undertaken during the emergence of PES, and by whom?

A3) Payments for Ecosystem Services: Rife with Problems and Potential—for Transformation towards Sustainability

What opportunities and deficiencies of PES as a mechanism are visible from existing experiments? A4) The “Teenage” Years:

Organizational Interests and the Evolution of Private Standards

How do concerns about reputational risk drive the emergence of private sustainability standards?

Theoretical Approach – Institutional Work

“Institutions are created through considerable, but mundane, effort expended in ongoing negotiations, experimentation, competition and learning, which resolve over time into shared conceptions of problems and solutions in organizational fields”

(Zietsma & McKnight, 2009: 145).

Methodological Assumptions – Scientific Realism

1) The physical world exists independently of our minds; 2) Nature is governed in different domains by different processes

Finding

A1) PES literature ignores some institutional work of creation and all institutional work of maintenance and disruption

A2) Specialization in types of institutional work on the part of actors leads to centralized normative networks engaged in institutional work A3) The current shortcomings of PES can be overcome by broadening the initiative to include supply chains and resolving existing compensation bottlenecks

A4) While reputational concerns can motivate support for standards, the resulting standards may be a poor balance between the costs of reputation protection and environmental improvement

58

5 Discussion

Synthesizing across all the submitted articles, my research suggests an initial answer to the key question, “How are institutions in support of PES created?” As argued throughout this discussion, the thin conception of institutions found in most work on PES is insufficient to address – or, in fact, to pose – this question. Rather, PES institutions are created as the result of a concatenation of a series of different types of power wielded by and flowing through a diverse range of actors. The success of these institutions requires not only that the formal rules that form the coercive apparatus of PES systems are in place but also that they are consistent with – and ideally supported by – the less formal institutions and modes of power that underpin social life. Different types of institutions – social norms, religious practices, cultural mores, and so on – can be created and mobilized by different types of power in ways that can support or undermine the formal institutions that form the tip of the PES iceberg. In the two sections below, I expand on this basic response to the core research question; outlining the implications of this answer can inform studies of PES, as well as practices in the field itself.

Much of the previous work on PES has adopted a thin conception of institutions as formal – or at least explicit – rules, derived in large part from the influence of transaction cost economics. In the framework outlined by Fleming and Spicer (2014), there are four major faces, or dimensions, of power (see also Lukes, 2005; Hayward, 2000). The first, coercion, is the ability of an actor to directly affect the behavior of another. The second, manipulation, refers to an actor’s ability to pull institutional levers to determine what issues are raised to institutional agendas and addressed by organizations. The third, domination, refers to the diffusion of ideologies that benefit certain actors, usually elites, more than others, but are nonetheless widely held. The final, subjectification, refers to the constitution of actors’ identities in ways that make them governable by particular institutions and techniques of power.

Mainstream research on PES has tended to focus on power understood as coercion or manipulation – that is, as the power of one actor to alter the behavior of others directly or to influence which issues are raised to the agenda (Lukes, 2005). The problem with this approach is, in essence, that it takes a relatively small part of the social systems that make up PES – a market transaction – as a stand-in for the whole suite of practices and meanings that actually

59

underpin economic systems. In terms of power dynamics, that means the approach overlooks what Fleming and Spicer (2014) refer to as domination and subjectification – the power of an actor to either promulgate norms or perspectives or to reinforce a system in which others who believe they are pursuing their own interests are in fact complicit in their own self-regulation. By taking an institutions-as-rules approach, the literature on PES has been led to examine only the tip of the power iceberg, missing social processes of domination and subjectification that are also part of making institutions work (Agrawal, 2005; Gebara & Agrawal, 2017). If institutions are simply the “rules of the game” (North, 1990), PES advocates need only construct formal institutions with the expectation that they will, in turn, directly alter behaviors (Williamson, 1975; North, 1990; Lawrence et al., 2009). All the complex labor involved in constructing – let alone maintaining – the market transactions that are the most visible aspect of PES often go unremarked and, as a result, unexamined, a problem noted in Article #1.