As public institutions have lost capacity and legitimacy, private actors have filled governance gaps with governance systems of their own. The implications for democratic accountability are significant.
Private Governance at Scale
Private governance — the exercise of governance functions by private actors who set rules, enforce standards, adjudicate disputes, and determine access to services in ways that affect millions of people — has grown significantly as public institutional capacity has declined and as private actors have accumulated the scale and the infrastructure to govern at scale without public authorisation. The content moderation policies of major social media platforms are speech governance affecting billions of users. The supply chain standards of major retailers are labour and environmental governance affecting millions of workers in dozens of countries. The credit scoring models of major financial institutions are access-to-credit governance affecting hundreds of millions of households. The algorithmic decision systems of major employers are labour market governance affecting millions of job seekers.
The rise of private governance does not represent a choice between governance and its absence — it represents a choice between publicly accountable governance and privately exercised governance. Private governance fills the gaps that public governance leaves, and the populations subject to private governance have less protection, less recourse, and less capacity to contest the decisions that govern them than populations subject to equivalent public governance would have. The accountability mechanisms that democratic theory has developed for public governance — transparency requirements, procedural protections, judicial review, electoral accountability — are not applied to private governance at anything approaching equivalent scale.
The rise of private governance is not a retreat from governance — it is a transfer of governance from accountable public institutions to unaccountable private ones. The populations subject to this transfer have not gained freedom from governance. They have lost the protections that public accountability provides.
Discussion