David Vogel Interview: Conversations with History; Institute of International Studies, UC Berkeley

Business, Government, and Ethics in an Era of Globalization; Conversation with David Vogel, Solomon P. Lee Distinguished Professor in Business Ethics, Haas School of Business, University of California, Berkeley; July 11, 2007, by Harry Kreisler

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Environmental Issues

One of the issues that you've followed quite a bit, both in comparative terms and in the U.S., is environmental policy. In this book there is a long essay on the Clean Air Act, one of the defining pieces of legislation that came as a result of the rise of the environmental movement.  There was legislation in 1970, and then legislation in 1977, and there were changes -- let's talk a little about them. Give us a sense of how this piece of legislation helps one understand the complexity of business and environment.

The 1970 law was an extraordinary law, enacted very hastily in response to substantial public pressure. It turned out to impose much more stringent stands than anyone in the beginning had ever thought were possible. So, it was an example of regulatory overreach, but showed the enormous strength of public pressure on companies. By the mid seventies some of the pressure had diminished, [due to the] energy crisis, etc. The visions in business had become more striking, and the '77 legislation was a much more complicated piece of legislation. Many of the issues involved various sectors of business, for example, Eastern coal versus Western coal fighting against each other, and so became a much more complicated situation.

In 1990, which I've not written about, but the 1990 legislation under the first Bush administration was an even more complicated story. So, the politics became more murky. There's some rollback in '77 but in '90 they sort of rekindled [the flame]. Although we've had no new clean air legislation now for seventeen years, the regulations on the book continue to be implemented. Automobile pollution, which was the central focus of the '77 legislation, continues to be quite stringent in the U.S.

In the case of the automobile emission standards, when there was something of a rollback in '77, you are saying that the key element was the fact that the automobile companies were able to create alliances with their unions, who were concerned about the loss of jobs.

Yes, that was very important. I think also the intensity of public anxiety over the issue had diminished somewhat. Surveys showed there was less public concern in the mid-seventies, but then in the late eighties [to the] second half of the eighties, the poll data shows public levels of anxiety increased dramatically, and the result is a significant strengthening of clean air legislation through the 1990 legislation. So, both mobilization and public opinion matter a lot.

Is it the case then that you get a piece of legislation and then the fight continues? What are the key variables? Creating alliances, having public opinion on your side, pressure on individual congressmen -- how does this play out, and at what point does it actually move to the bureaucracy, where the fights [between] groups come before the regulatory agencies?

The legislation is the most critical because that's the framework. I'm doing more writing in this area; I think public opinion and public pressure plays a very central role. When the public is in a mood or perception where they're willing and eager to have laws enacted that impose more constraints on companies, the government will be more or less responsive. When the public is less enthusiastic, then companies have more room to play. So, that plays a critical role.

When it gets to the bureaucracy, then the administration's preferences matter. The Clinton administration, for example, was always quite ambivalent about environmental standards, took a long time before they imposed more stringent ones.

Why is that? Is that surprising to you?

Yes, it's a little surprising. I think Clinton didn't feel there was a lot of pressure, I think he never cared personally about environmental issues, he never thought they were very important and not a priority for him. It is surprising that he didn't do more, actually, being a Democrat, but I think it was part of his centrist policies. The areas where he chose to challenge companies, like on health care, were different areas. He was more hesitant to challenge them on environmental issues.

The Bush administration, administratively in many areas, actually, has gotten a very mixed record. There have been areas of weaker enforcement, but there have also been areas, particularly on air quality standards, in which there's been a strengthening of rule making. So, it's a complicated story.

I think part of what's happened is that rule making has become more technocratic, more based on cost-benefit analysis, risk assessments. When those assessments and analyses support standards, the bureaucracy seems to be willing to roll along and enact them. When it doesn't, they're more hesitant. The risk assessment and cost-benefit analysis, by making it more technocratic, sometimes inhibits more stringent standards because the government is less vulnerable to public hysteria, and sometimes also can lead to more stringent policies. It's a complex story.

Comparing Britain to America in an earlier period (and I'd be interested if it's still the same), you say that American environmental policy is marked by a frequent use of prosecution, its insensitivity to the cost of compliance, its centralization in Washington, its reliance on fixed rules and rigid deadlines, its limitation on administrative discretion. Has this earlier description eased up, and what were the factors in making that happen?

I think it has eased up. Intellectual pressures have made a big difference. [There's] been an enormous intellectual critique of regulatory policy as ineffective, too expensive, inefficient, and I think that has had a big impact. The declining influence [of the] environmental movement has had a big impact. Clearly the Republican control of Congress essentially since '94 has had a big impact. On the other hand, the EU has also changed and become much more like America, much more centralized, much more rule oriented, much more open to public opinion and public pressure. People tell me that my book National Styles of Regulation, which should have captured the British regulatory style through the mid-eighties, is now read as a historical piece, in a way, that people see what it used to be like and how much it's changed under EU pressure. In a lot of ways the EU looks a lot like America used to look like in the seventies and eighties, and America, in some ways, looks a little more like Europe was in the seventies and eighties.

What is this the result of? Is this a consequence of globalization, and with that the internationalization of the environmental movement?

No. If that were true, you'd expect convergence, but in fact, you're seeing divergence, only in a different pattern. No, I think it's mostly due to domestic political pressures. I think environmental pressures domestically have been stronger in Europe, given the sets of scares and crises and anxieties and regulatory failures.

We now see, of course, a major concern about global climate change, which is quite recent, but until fairly recently, environmental issues had become less salient in the U.S. The level of anxieties, the perceptions of policy failures, have declined. I'm now writing a book which tries to explain why Europe and America have sort of traded places over the last forty years.

Do you have any working hypotheses that you want to talk about?

I think the demand for regulation is critical. That's the public pressure. But it's in turn mediated both by political institutions (so the EU's role has played an important role, and the federal government's importance has played an enormous role), and by the party in power. All the things being equal, even if the pressure is the same, if you have administrations and governments in power who are from more conservative political parties, which has been true in the U.S., they're less likely to be responsive to those pressure. In Europe, political governments in power, and the EU itself, have been more pro-regulation, pro-environment, and are more likely to be responsive. My working hypothesis [is that] it's public pressure mediated by political institutions and the preferences of the governing party in power.

Which presumably also reflects public attitudes ...

Not always. I think it's fairly rare, actually, that electoral outcomes are shaped by public concerns about environmental issues, one way or the other. They really don't go in sync.

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