Production Goes Global, Compliance Stays Local: Private Regulation in the Global Electronics Industry

Concerns about poor working conditions in global supply chains have led to private initiatives that seek to regulate labor practices in developing countries. But how effective are these regulatory programs? We investigate the effects of transnational private regulation by studying Hewlett Packard’s (HP) supplier responsibility program. Using analysis of factory audit records, interviews with buyer and supplier management, and field research at production facilities across seven countries, we find that national context — not repeated audits, capability building, or supply chain power — is the most important predictor of workplace compliance. We then use field research to identify two local institutions that complement transnational private regulation: domestic regulatory authorities and civil society organizations. Although these findings imply limits to private regulation in institutionally poor settings, they also highlight opportunities for productive linkages between transnational actors and local state and society