By Sameer Azizi, Tanja Börzel,  & Hans Krause Hansen

Consider for a moment the situation in Europe. Here climate change induced natural disasters, such as floods in Germany, recently caused havoc, with public authorities struggling to reconstruct basic infrastructures and develop preventive measures. Or consider when Hurricane Katrina hit New Orleans in 2005. It took long for US authorities to restore order, and so did the rebuilding of especially black community neighbourhoods, which are now seriously hit by the COVID-19 pandemic. Or consider how the pandemic put national health systems on the brink of collapse all over Europe, with groups of citizens protesting against lock-downs, vaccination and health passports. Indeed, privileged Western industrialized countries offer many examples of limited state capacity and challenges to state authority in certain sectors and under specific circumstances.

But these examples fade when compared to the situation in other parts of the world where the state has been severely constrained for generations, if not centuries.  In most countries in the global South, state capacity is considerably weaker and state authority, as such, is much more contested. A wealth of complex factors is at play: extreme economic scarcity and social inequality, ethnic diversity, unequal dependency relations in the global political economy, and historically entrenched political and violent conflicts.

But even where severe resource constraints, deep-seated inequalities and violent conflicts challenge formal public authorities to the point of their extinction, one finds alternative forms of governance. Non-state actors like local and transnational businesses, NGOs, other civil society organizations, rebel groups and warlords, and even drug cartels, help make rules and provide goods and services, including security, health, and education. While this gap-filling is partial and has little or no formal democratic accountability, it certainly plays an important role. In large parts of the global South, such governance gaps existed well in advance of the global spread of neoliberalism, which later came to hollow out the already scarce governmental provision of public health and education, for example.

Our special issue focuses on such complex governance and business-society relations in vastly different countries – Syria, Nigeria, India, and Palestine. Specific trajectories of colonization and decolonization characterize these countries – state formation, business operations, and struggles between social groups within and across national borders are specific to each country. We highlight the governance of business-society relations, business contributions to governance, the role of the state for both, and how transnational actors, including NGOs, interact with the local realities in question.

We take inspiration from recent literatures on Areas of Limited Statehood (ALS). This allows us to analyze how governance takes place when states are structurally constrained and how non-state actors come to act as providers of collective goods. This is an always precarious, problematic, and contested matter, as our four contributions clearly demonstrate. Two of them focus on the role of corporations. Belhoste and Nivet, in their study of the French corporation Lafarge’s operations in war-torn Syria, show how Lafarge became entangled in a web of local and international conflicts but nevertheless continued operating, resulting in the financing of terrorist groups like ISIS. Nwoke, in his study of the oil industry in the Niger Delta, discusses why corporate social responsibility practices based on Western approaches have a hard time contributing effectively to the sustainable development of host-communities. Vakkayil explores the Meghalaya region in Northeastern India and highlights the importance of indigenous authorities and industries often overlooked in conventional studies of governance and business-society. Finally, Arda and Banerjee focus on Palestine and analyze the transformation of local voluntary grassroots organizations into professional NGOs – private actors often more concerned with pleasing international donors than serving the needs of local communities.

Overall, we show that the ALS perspective provides a useful way to investigate the governance of business-society relations and the role of business and other non-state actors as governors when the state is too weak or absent. By focusing on the global South, we do not want to imply that areas of limited statehood are confined to the postcolonial world. Industrial democracies, too, contain areas where state authorities lack the ability to enforce the law, if only temporarily. The binary understanding of the “underdeveloped” global South and the “modern” as well as “developed” global North misses the fact that ALS constitute a global phenomenon in our present time. The insights of the special issue, therefore, travel beyond the global South.