Causal Complexity

Abstract

This chapter examines causal complexity. The determinants of improvement in working conditions in supplier factories in global supply chains are complex. The complexity arises from the interaction between heterogeneous actors (companies, auditing firms, suppliers) following a multiplicity of practices, combined with the effect of local institutional conditions and industry and workplace context. Along with the general lack of transparency in private regulation, this combination of causal factors leads to uncertainty with respect to cause–effect relationships. The central assumption of the private regulation model is that if standards are set by codes of conduct (whether based on international conventions or local laws), and if supplier factories comply with the codes, sweatshop conditions will be avoided and improvements will be made in the lives of workers in global supply chains. But this assumption may not be warranted; buyers and brands may not have the power to force suppliers to compel compliance. And within the businesses of most global buyers and retailers, sourcing may not be sufficiently well integrated with compliance, so the incentive effects of rewarding good factories that are making improvements in compliance are not realized in practice — even though such incentives are the very basis for the model of private regulation of first-tier supplier factories.