INTERLOCKING JUDGES: ON JOINT EXOGENOUS AND SELF-GOVERNANCE OF MARKETS

Abstract

This study stresses the importance of considering a “joint” governance of interfirm relations as an alternative to external governance (by the State) and self-governance (by the business community) of these relations. We argue that a broadly-conceived structural and organizational approach to economic institutions provides insights into this joint governance because it shows how such a system spreads the costs of control among several kinds of stakeholders. We look at how transactions between any two firms are regulated through jurisdiction by “consular” judges (i.e. judges elected through the local Chamber of Commerce) who indirectly represent other firms and industries in that market, and are therefore considered to be at the same time third parties and potential levers of influence acting on behalf of corporate interests. We study an empirical case of such joint governance: The Tribunal of Commerce of Paris (TCP). Following previous work on lateral control and leverage, we hypothesize that industries and/or companies that have a strong stake in the conflict resolution process will be more represented among the judges of this court than other industries and/or companies, and that judges who are socially active in the court that enforces this joint governance will be sought out for advice more than other judges, and thus gain influence on their peers by suggesting specific outcomes. The analyses of the composition of the bench and of the advice network data collected in this court display an influence structure that confirms these hypotheses and that is likely to affect conflict resolution between businesses. It thus characterizes joint governance of markets as a complex set of social processes worthy of economic sociologists’ attention.

Citation

Lazega, E. and Mounier, L. (2003), "INTERLOCKING JUDGES: ON JOINT EXOGENOUS AND SELF-GOVERNANCE OF MARKETS", Buskens, V., Raub, W. and Snijders, C. (Ed.) The Governance of Relations in Markets and Organizations (Research in the Sociology of Organizations, Vol. 20), Emerald Group Publishing Limited, Leeds, pp. 267-296. https://doi.org/10.1016/S0733-558X(02)20010-5