organizations and credibility
In a conversation with guest blogger emeritus Tim Bartley, we got into a discussion of when organizations join associations and when they are expelled. E.g., a firm being expelled from a “fair trade” group for bad labor practices. Other examples: colleges losing accreditation, or churches being expelled from their league for apostasy. A few issues came up:
- These associations rarely expel organizations. It seems to be hard. Partly, if you expel too many people, you lose your audience.
- A decent chance of expulsion of censure may discourage people from trying. If you know that your firm has a 30% of triggering a labor violation to start with, why join?
- Tim brought up state sanctions, there is no way to dodge.
- Upon reflection, states are complicated as well. There is capture, when the regulated gain influence over the state. There is also repeal, firms may successfully lobby to have certain rules revoked (e.g., the repeal of Glass-Steagall).
- In the case of higher ed, for example, accreditation standards (e.g., law schools need law review journals) often appear to be make work, rather than genuine quality signals.
Overall, I remain skeptical of these associations and their attempts to provide a seal of approval for businesses.
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