NEGOTIATING AGREEMENTS WITH ENVIRONMENTAL ACTIVISTS IN THE SHADOW OF REGULATION

Abstract

This paper examines the conditions under which firms reach agreements with environmental activists in regulatory agency proceedings to mutually settle disputes. The paper argues that actions of firms will be dictated by the regulatory decision-making process which is susceptible to pressures emanating from the presence of multiple stakeholder interests and the prevailing political environment. As such, the chapter predicts that the likelihood of firms reaching agreements with environmental activists will be a function of how these regulatory considerations interact with the heterogeneity in the attributes of firms, activists, and the regulators. These predictions are tested in the context of participation by environmental activists in regulatory proceedings initiated by electric utility firms with State Public Utility Commissions (PUCs) in the US between 1990 and 2015. Results indicate that engagement of firms in practices contested by environmental activists, economic power wielded by firms’ other influential stakeholders, spill overs from environmental activists’ participation in extra-institutional tactics, and the political ideology of regulators influence the likelihood of firms reaching agreements with an activist.