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Almost all regulatory policy stops at the national border. Thus, when conducting business abroad, the behaviour of firms i s r egulated b y t heir h ost, n ot t heir home country. Yet, international institutions have issued (non-binding) codes of conduct on social/environmental aspects of firm behaviour, and various high-income countries discuss how to improve extraterritorial firm b ehaviour -w ith h igh p olitical contestation over the appropriate mix of state intervention and corporate self-regulation. Exploiting a unique national referendum on this issue in Switzerland, we investigate how these interact from a public opinion standpoint. Based on a nationally representative survey experiment (N=1564), we find that while baseline support for state intervention is high (approx. 60%), corporate self-regulation decreases such support. However, only credible voluntary business initiatives lead to substantial reductions. Our results speak to a broad policy debate in European countries and the EU on how to ensure compliance of firms with human rights and environmental standards.

Almost all regulatory policy stops at the national border. Thus, when conducting business abroad, the behaviour of firms is regulated by their host, not home country. Yet, international institutions have issued (non-binding) codes of conduct on social/environmental aspects of firm behaviour, and various high-income countries discuss how to improve extraterritorial firm behaviour – with high political contestation over the appropriate mix of state intervention and corporate self-regulation. Exploiting a unique national referendum on this issue in Switzerland, we investigate how these interact from a public opinion standpoint. Based on a nationally representative survey experiment (N=1564) we find that while baseline support for state intervention is high (approx. 60%), corporate self-regulation decreases such support. However, only credible voluntary business initiatives lead to substantial reductions. Our results speak to a broad policy debate in European countries and the EU on how to ensure compliance of firms with human rights and environmental standards.

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Environmental policy is touching on ever more aspects of corporate and individual behavior, and there is much debate over what combinations of top-down (government-imposed) and bottom-up (voluntary private sector) measures to use. In post-industrial, democratic societies, citizens’ preferences over such combinations are crucial, because they shape the political feasibility space in which policymakers can act. We argue that policy-designs relying on voluntary measures receive more public support if they are based on inclusive decision-making, use strong transparency and monitoring mechanisms, and include a trigger for government intervention in case of ineffectiveness. Survey experiments focusing on two green economy issues in Switzerland (N=1941) provide strong support for these arguments. The findings are surprisingly consistent across the two contexts. This suggests that our study design offers a useful template for research that explores politically feasible green economy policy designs for other issues and in other countries.

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Vastly increased transnational business activity in recent decades has been accompanied by controversy over how to cope with its social and environmental impacts. The most prominent policy response thus far consists of international guidelines. We investigate to what extent and why citizens in a high-income country are willing to restrain companies to improve environmental and social conditions in other countries. Exploiting a real-world referendum in Switzerland, we use choice and vignette experiments with a representative sample of voters (N = 3,010) to study public demand for such regulation. Our results show that citizens prefer strict and unilateral rules (with a substantial variation of preferences by general social and environmental concern) while correctly assessing their consequences. Moreover, exposure to international norms increases demand for regulation. These findings highlight that democratic accountability can be a mechanism that motivates states to contribute to collective goods even if not in their economic interest and that awareness of relevant international norms among citizens can enhance this mechanism.