Supporting Sunlight: When Firms Promote Global Transparency Standards
Corporate transparency standards have proliferated worldwide over the last three decades. But most businesses prefer secrecy to openness and actively oppose corporate transparency standards. Becoming more transparent is often materially and/or reputationally costly, and the concentrated costs of collecting and sharing information experienced by disclosing businesses generate diffuse societal benefits that are hard to justify. Yet some businesses not only support greater transparency, but they also actively lobby national governments and transnational organizations over the opposition of other powerful business actors. Why do some businesses support corporate transparency standards, and when do their (inter)national lobbying efforts succeed?
Drawing from historical institutionalism and theories of economic regulation, this book argues that the cost of information collection shapes whether businesses sincerely support corporate transparency standards. Policy feedback and/or market change increase information collection costs for businesses, who seek to outsource these costs to governments or to transnational bodies through supporting industry-level corporate transparency standards. These businesses often ally with civil society activists and government officials to secure the adoption of corporate transparency standards over the remaining business opposition.
I demonstrate this argument by analyzing the surprising evolution of staunch business opposition to enthusiastic support for three corporate transparency standards at the national and transnational levels. I examine the (un)successful adoption of beneficial ownership transparency laws to ban shell companies in the United States, United Kingdom, Canada, and Australia since the late 2000s. I then compare the successful adoption of an international commercial airplane registry compared to the failed international commercial space asset registry under the Cape Town Convention from the early 1990s through the present. Finally, I trace the success of social media platform transparency rules in the European Union compared to their failure in the United States since the mid-2010s.
This book counters arguments that crises are the only time when business opposition to corporate transparency standards can be overcome and contributes evidence of when business supports stronger rules that encompasses both domestic and transnational regulatory processes.