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Beyond voluntary: state–firm bargaining over corporate social responsibilities in mining

ABSTRACT This paper investigates how and why governments use both regulatory and extra-juridical pressures to influence what are normally considered to be the voluntary corporate social responsibility contributions of mining firms to local social and economic development that go beyond compliance with regulatory requirements. Based on a modified version of the obsolescing bargain model, the paper argues that governments opt to co-produce corporate social responsibility when they face pressures to reform the firm's relationship with society but are unable or unwilling to change the legal framework that governs it. In this regard, institutional stickiness can result in the displacement of bargaining from the formal rules and regulations that govern foreign direct investment, to the unregulated and informal practices associated with the social responsibilities of business. The argument is confirmed through a qualitative examination of state–firm relations in the mining sectors of Argentina and Peru.