Stakeholder engagement: Building participatory and deliberative spaces in subsistence markets

Journal of Business Research 65 (2012) 1728–1735

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Journal of Business Research

Stakeholder engagement: Building participatory and deliberative spaces in subsistence markets Canan Corus a,⁎, Julie L. Ozanne b, 1 a b

St. John's University, NY, USA Virginia Tech, VA, USA

a r t i c l e

i n f o

Article history: Received 1 March 2011 Received in revised form 1 November 2011 Accepted 1 January 2012 Available online 9 March 2012 Keywords: Subsistence markets Deliberative democracy Stakeholder engagement Participatory methods Deliberative methods

a b s t r a c t Corporate practices often affect poor communities in subsistence markets yet these consumers are not always consulted as legitimate stakeholders. Both subsistence communities and firms can benefit from more inclusive and democratic corporate engagement with stakeholders. Toward this end, a deliberative democratic approach to stakeholder engagement is proposed for more equitable exchanges among firms and their stakeholders in subsistence markets. Building participatory spaces can activate marginalized communities to influence constructively the corporate actions that affect their well-being and firms can gain valuable insights for strategic decision making. Four practical methods and applications for improving participation and deliberation are examined and evaluated. © 2012 Elsevier Inc. All rights reserved.

1. Introduction Corporations are growing in size, reach, and power, largely as a result of the processes of deregulation and privatization associated with economic globalization (Scholte, 2000). As the influence of global firms grows, their power is not matched by a corresponding increase in corporate accountability, which is particularly problematic in developing markets (Garvey & Newell, 2005). The goal of this paper is to suggest that participatory and deliberative spaces and processes can improve corporate–community relationships and expand stakeholder representation. Stakeholder engagement often assumes that negotiations will be adversarial; for example, communities might leverage land rights against companies who might leverage the opportunity for new jobs (Garvey & Newell, 2005). Such an approach may overlook important opportunities to engage in more collaborative and effective interactions. For instance, more democratic corporate engagement might involve the communities as partners in local corporate projects. The Aboriginal Canadian Inuit community collaborates with Diavik Diamonds to form environmental policies and monitor water quality (Missens, Dana, & Anderson, 2007). Far from confrontational, these programs depend on trustworthy and committed relationships. Cooperation may even extend to communities gauging their own needs

⁎ Corresponding author at: Department of Marketing, Tobin College of Business, St. John's University, NY, USA. E-mail addresses: [email protected] (C. Corus), [email protected] (J.L. Ozanne). 1 Department of Marketing, R.B. Pamplin College of Business, Virginia Polytechnic Institute and State University, VA, USA. 0148-2963/$ – see front matter © 2012 Elsevier Inc. All rights reserved. doi:10.1016/j.jbusres.2012.02.014

and developing plans to build capacities with the aid of corporations (Forstater, Dupré, & Oelschlaegel, 2007). This vision stands in sharp contrast to past practices where firms made payments to community leaders to insure smooth operations with little concern for the welfare of the community (Wasserstrom & Reider, 1998). Deliberative democracy is offered as a conceptual structure for stakeholder engagement, along with a set of concrete methods. Even well-intentioned firms who seek more authentic engagement may be stymied by the lack of discursive and egalitarian spaces in subsistence markets (Cornwall & Coelho, 2007). Thus, firms may have to play a more active role in establishing deliberative spaces where no community tradition exists. Deliberative methods are explored that invite stakeholders to participate in more effective twoway exchanges of information, deeper reflection, and constructive problem solving. First, the need for democratic corporate conduct and accountability in subsistence markets is examined. Next, deliberative democratic theory is proposed as a guiding framework for more equitable exchange and to achieve more effective stakeholder engagement. Four applied methods for increasing participation and deliberation are explicated and applications from subsistence markets are presented and critiqued. Finally, the challenges and benefits of deliberation in subsistence markets are discussed. 2. Corporate accountability in subsistence markets For corporations, their negative impact on human rights in communities in subsistence markets is rarely a top concern (Garvey & Newell, 2005). A common vision of corporate accountability stresses

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financial reporting, which overlooks the political processes by which corporate actors proffer accountability in subsistence markets (Newell & Wheeler, 2006). Recent initiatives, like the UN Global Compact (UNGC), 2 address corporations' potential broader negative impact on human rights (e.g., the right to take part in government, have an adequate standard of living, or freely express thought). This compact asserts that companies not only should avoid human rights abuses but also should support human rights (UN Global Compact, 2010). Deeper corporate accountability needs to embrace a wider set of stakeholders and concerns. A “myopic” focus on the needs of consumers may keep firms from considering other crucial stakeholders that could impact their decision making (Smith, Drumwright, & Gentile, 2010). Expanding stakeholder involvement is based on the assumption that responsibilities for accountability arise in a relational context. The exclusion of impacted communities from decision processes can undermine even well intentioned corporate projects and adversely impact human rights. For example, Chevron Texaco donated money to development agencies in Angola, which aroused suspicion when they subsequently bid on Angola's most prized oil asset. Local stakeholders believed the firm had made contributions to channel money and gain influence from Angolan government officials (Frynas, 2005). The most powerful and influential social networks are often those linking the cultural elite, business groups, and the government, whereas poor communities are usually excluded from the very networks that can help them build support for their claims (Garvey & Newell, 2005). At times, overt mechanisms of exclusion purposefully and even violently silence members of poor communities (Gaventa & Barrett, 2010). Citizen consent loses its meaning when obtained through pressure from the government, undue influence by experts and media, and even threats of employment termination (Newell & Wheeler, 2006). Constructive community–corporate dialog is an important basis for claiming this deeper accountability especially when citizens' rights are not protected by governments. Corporations are increasingly aware of this necessity and some firms consult panels of community leaders, workers' unions, and experts. For instance, AREVA announced investments in renewable energy and Lafarge shifted their focus on sustainable construction programs after conferring with their consultation panels (Forstater et al., 2007). Deliberative democracy asserts that justification for policies that affect other parties must survive the test of common rationality (Gutmann & Thompson, 2004). Following this principle, corporate accountability should involve providing justifications that are understandable and acceptable to the affected parties to make citizens informed partakers in the corporate decisions that affect their lives. 3. Deliberative democracy and stakeholder engagement Deliberative democratic theory is a normative theory that can be used to explore conflicting perspectives and interests through public discussions guided by rational argument (Chambers, 2003). In a deliberative democracy, citizens engage in open deliberations to make collectively binding decisions, such as town hall meetings or neighborhood councils. According to this view, moral validity is not the result of any single individual's reasoning but instead emerges from the inter-subjective process of dialog (Habermas, 1990). This notion is rooted in Habermas' discourse ethics, which proposes the “ideal speech situation” as a frame for analyzing deliberation as more authentic or distorted. Communications must exhibit general symmetry so that all participants are offered the same opportunity to speak free from constraints, tradition, or authority. Implicit rules or norms also 2 1 UNGC is an extension of the UN Statement of Universal Human Rights, started in 2000, with over 8700 corporate participants today.

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guide valid deliberations including the norm of truthfulness (i.e., making accurate statements), the norm of sincerity (i.e., speaking one's true intentions), and the norm of comprehensibility (i.e., the utterances are understandable). While the ideal speech situation is an unattainable goal, its value lies as a bench mark against which to judge communication as more or less legitimate (Habermas, 1998). Similarly, stakeholder engagement that is guided by deliberative processes calls for public reasoning and critique as a prerequisite for legitimate corporate decisions (Gaventa, 2006; Ozanne, Corus, & Saatcioglu, 2009). Stakeholder engagement suggests that the authenticity of a decision rests on the discursive quality of the decisionmaking process such that general symmetry exists in exchanges and the implicit norms guide the communication (Habermas, 1998). For example, all parties who are affected by the firm's actions should participate; thus, space must be made at the table for those marginalized groups who are so often excluded. Public democratic deliberations on corporate actions must employ the best evidence at hand (i.e., the norm of truthfulness), participants must speak their true intentions (i.e., the norm of sincerity), and technological language should be minimized (i.e., the norm of comprehensibility). Alternative courses of action and their justifications are evaluated through the common rationality of the participants. Acceptable decisions arise and survive discussion and the critique of stakeholders. Including communities as co-creators of corporate policies can stimulate innovation and identify new opportunities in subsistence marketplaces (Prahalad, 2005). Yet, traditional market research methodologies are designed with Western consumers in mind (e.g., surveys and experiments); they often prove inappropriate to use in the context of issues in subsistence markets such as low literacy or to examine communal practices so common among the poor (Chakravarti, 2006). Steenkamp (2005) similarly recommends expansion of methods to capture consensus-based decision making within socially interdependent contexts. More recently, researchers highlight the significant potential of participatory and dialogical approaches in understanding subsistence markets (e.g., Hill, 2010; Ozanne & Saatcioglu, 2008; Ozanne et al., 2009; Weidner, Rosa, & Viswanathan, 2010). Other researchers call for greater deliberation to establish corporate legitimacy (e.g., Nill, 2003; Scherer & Palazzo, 2007). They propose dynamic and discursive processes of moral reasoning to revise the validity claims of taken for granted norms (Gilbert & Behnam, 2009). A dialogic approach is particularly appropriate for dealing with moral issues in cross-cultural settings (Nill, 2003). This discursive turn is due in part to the dated and untenable position that universal norms even exist much less that executives can use these norms to adjudicate claims of multiple stakeholders. When firms operate in unfamiliar foreign environments, effective community engagement can help them navigate local norms of appropriate conduct, identify new opportunities, strengthen marketing initiatives, and build their reputation. More equitable, discursive stakeholder engagement would meet a higher standard of moral legitimacy than demonstrated by either legal compliance or adversarial negotiations for establishing corporate legitimacy (Gutmann & Thompson, 2004). Policies that are built using deliberative processes are perceived as procedurally fairer and meet less resistance in their implementation (Tyler, 1990). In addition to greater legitimacy, engaging in deliberative forums can also convey respect and consideration, while avoiding such forums may signal lack of corporate transparency (Hendriks, 2005, 2006). Deliberation with communities can also be good business to the extent that risks are identified, which helps improve the long-term viability of a project. For example, Shell's town hall meetings helped address public concerns during the development of the Malampaya, Philippines natural gas project. While these deliberations cost about six million dollars, it is estimated that over fifty million was saved in potential penalties and delays (see Herz, La Viña, & Sohn, 2007).

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A dialogic approach can bolster community involvement and offer competitive advantages. Consider Marriott's welfare-to-work program that successfully trains, mentors, and – more importantly – retains entry-level employees in an industry plagued by high employee turnover (Kanter, 1999). Deliberations encourage the comparisons of competing views, may reveal new information, and can stimulate a search for new solutions. Authentic public dialog allows participants to consider several possibilities. Of course disagreements will arise, but a curious and open attitude to the potential of this share content can spur the creation of new opportunities (Bohman, 2006). The next section discusses deliberative forums to realize these deliberative principles. Specific cases in subsistence markets are evaluated as well as the obstacles to realizing such a vision. 4. Participatory and deliberative methods 4.1. Overview We present deliberative inclusive processes (DIPs) as methods that bring together citizens, governmental bodies, key stakeholders, and corporations to discuss shared concerns. DIPs ideally involve pre-meeting contacts, the development of balanced briefing materials, time for participants to become educated on the topic, and opportunities for citizens to ask questions on both technical matters and broader issues of concern (Holmes & Scoones, 2000). Unlike a debate where the emphasis is on refuting the opponent's position, participants assume that initial opinions will be transformed as a result of exposure to other viewpoints (Button & Mattson, 1999). Thus, participants share both strongly held views as well as uncertainties in their search for common ground. While four methods are highlighted in this article, dozens of other methods exist (see Gastil & Levine, 2005). Deliberative spaces can be informal and unstructured, such as spontaneous dialog in community councils, or they can be formal and structured, such as citizens' juries and consensus conferences (Fung & Wright, 2001). DIPs can be small scale, such as deliberative focus groups and multi-criteria mapping, or large scale, such as deliberative polling and 21st century town meetings. Many DIPs are time-intensive single event projects like the Prajateerpu citizen jury, yet others meet regularly, like participatory budgeting in Porto Alegre and health councils in Brazil (Cornwall & Coelho, 2007), both of which are discussed later. Different deliberative methods are appropriate depending on the goal of the organization or the group using the method. Many deliberative methods are used by governments to get public input on very specific issues such as bridging the digital divide in rural communities. Alternatively, dissemination of information may be the main objective of the deliberative process. The study circles that are reviewed next offer one such case and, similarly, in Bavaria deliberation occurred to explore broad issues of consumer protection (Sturm & Weilmeier, 2003). These methods can also be used to evaluate policies, such as participatory audits and scorecards. Over two-hundred methods were identified across a range of disciplines (Lukensmeyer & Torres, 2006), contexts (Holmes & Scoones, 2000), contribution to accountability (Ackerman, 2004), potential for community empowerment (Fung & Wright, 2001), participant selection, duration (Rowe & Frewer, 2000), as well as the resources required (also see www. peopleandparticipation.net). DIPs involve interaction, usually face-to face (although online permutations are expanding rapidly), where different perspectives are discussed; in addition, they frequently involve some combination of expert presentations, round table discussions, creation of potential solutions, and critique of these alternatives. The majority of DIPs were originally developed and extensively used and tested in the United States and Europe. The Danish Board of Technology was an early pioneer and created consensus conferences and scenario workshops to gather public input on controversial technologies, such as

genetic testing and genetically modified foods (Hendriks, 2005). These methods have spread widely to such countries as Japan, South Korea, Australia, and New Zealand (Einsiedel, Erling, & Breck, 2001). These methods are extensively used at the intersection of food and biotechnology, particularly in the aftermath of the ‘mad cow’ crisis (Einsiedel et al., 2001; Sturm & Weilmeier, 2003). While deliberative methods are used heavily in the areas of technology and the environment, they have multiplied to a wide range of industries including waste management, urban planning, and water allocation. Companies in extractive industries, like Rio Tinto and BP, are building spaces for constructive dialog to minimize tensions, reduce costs, and improve their operating environment (Forstater et al., 2007). 4.2. Evaluation of deliberative methods The Forest Stewardship Council (FSC) is a successful, long term attempt to implement deliberative democratic ideals in a practical context. Most industry codes are formulated by corporate executives and prominent actors in the industry, usually without the involvement of civil society (Garvey & Newell, 2005). The FSC's code of conduct is a form of corporate self-regulation arising from constructive dialog among affected stakeholders. Diverse stakeholders convened to develop principles for sustainable forest management including IKEA, Home Depot and OBI, NGOs, development aid agencies, and indigenous peoples (Scherer & Palazzo, 2007). While deliberative approaches may be evaluated against different criteria, generally four principles are important (Levine, Fung, & Gastil, 2005; Ozanne et al., 2009). The process must achieve democratic validity by including those stakeholders who are affected. In the FSC, participants included industry, indigenous peoples, and aid organizations who worked together collectively. Dialogical validity establishes whether stakeholder parties are able to discuss ideas free from constraints and coercion. All FSC members were encouraged to propose motions and no limitations existed regarding topics to be discussed (FSC, 2008b). In addition, spaces were provided especially for marginalized groups, such as indigenous people, to work separately to create codes sensitive to their needs (FSC, 2009). Process validity establishes whether adequate time existed to deliberate and if the briefing materials represented the best current evidence. A series of educational seminars on current issues facing wood workers and managers preceded FSC's general assembly (FSC, 2008a). Finally, outcome validity explores whether the product of the deliberations is effective and meets the diverse needs of the participants. The FSC process currently informs policy discussions and benefits stakeholder relations, especially in countries with weak policies on forestry governance. For instance, stakeholder consultations in South Africa and Mexico resulted in the inclusion of previously marginalized groups into national debates on forestry (Pattberg, 2005). Moreover, FSC's certification process and monitoring procedures are broadly accepted among industry players and civil society organizations (Scherer & Palazzo, 2007). 5. Participatory and deliberative experiments in subsistence markets Four methods were purposively selected to vary on the level of participation and deliberation exhibited. For example, participatory social audits represent a traditional approach to corporate accountability that is extended to be more participatory (although less opportunity exists for deliberation). Alternatively, the method of study circle is low-cost, builds human capacities, and develops skills of deliberation. The Porto Alegre participatory budgeting represents one of the most effective approaches to state-society co-governance for accountability in the developing world. Finally, Prajateerpu Citizen

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Jury seeks to encourage both multi-stakeholder participation and deliberation. 5.1. Participatory social auditing Social auditing is a method for measuring and reporting on the extent to which corporations are engaging in fair and ethical conduct toward their stakeholders. Social audits address issues such as living wages, rights to collective bargaining, working conditions, and various types of discrimination. These audits are conducted regularly to track the organization's social responsibility performance based on stakeholders' expectations and company objectives. Social auditing is a growing business practice that provides a feasible method to assess firms' level of compliance with their social responsibility objectives (Forstater et al., 2007). Nevertheless, this approach is criticized for being narrow or ignoring controversial issues (Bendell, 2001). For instance, many external audits are conducted from the perspective of executives and based on the interests of the firm. While auditors ostensibly gather the testimonies of workers, this evidence may be insufficient to identify unfair working conditions particularly if workers fear losing their jobs. Two PricewaterhouseCoopers audits conducted at factories in Asia relied primarily on information from managers and consequently overlooked significant issues related to health, safety, and fair wages and hours (Auret & Barrientos, 2004; Bendell, 2001). A participatory approach to social audits can overcome these limitations by seeking out input from diverse groups and minimizing the chance of coercion. Auditors from the host culture encourage wider and deeper participation by gathering input at various levels of operation while being sensitive to cultural norms. The concerns of workers can be explored using interviews to encourage the identification of novel issues. More inclusive participation includes representatives from a range of management levels, trade unions, and NGOs (Auret & Barrientos, 2004). When persistent problems exist, the participatory audits can drill more deeply to explore these issues, such as participatory gender audits that examine companies' strengths and weaknesses with regards to gender inequality. Chiquita seeks stakeholder input in their work with the Rainforest Alliance in the Better Banana Project for environmental responsibility and better labor conditions (Bendell, 2001). As an element of this initiative, a study of banana plantations in Costa Rica used participatory social auditing techniques with members from trade unions, workers' unions, and NGOs. These social audits followed the standards of Fair Labor Associations and Ethical Trading Initiative that are more detailed than the governmental codes. The participatory social auditing process involved educating producers and workers on the provisions of the code; the process proved an effective tool for revealing important issues such as sexual harassment (Bendell, 2001; see Table 1 for an evaluation of this process). 5.2. Study circles Study circles encourage adult learners to participate in public dialog. The study circle process starts with a series of separate small groups who gather concurrently to deliberate on an issue of local concern. Once the small groups develop their individual recommendations, a community wide study circle, or “action forum,” is conducted. Participants discuss various plans until they form a consensus on a common solution and develop a joint action plan (Torres, Gunn, Bernier, & Leighninger, 2004). This deliberative method is used widely by local, grassroots organizers given it is inexpensive and easy to implement (Gastil & Levine, 2005). The Zimbabwe Farmers Union uses this method in their local educational groups, especially in farmer-to-farmer training. In these initiatives, local farmers are the main actors and developmental agencies, such as Africa Book Development Trust (ABDT), support

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study circles by providing training materials and facilitators (Naidoo, 2001). Here, the study circles consist of small groups of five to fifteen people who meet regularly for 2-3 hours to learn about a topic of interest (Braun, 2006). For instance, study circles were formed upon the request of communities in Gokwe North district to learn about cattle grazing and marketing. Educational materials were prepared by ABDT and were reviewed by trained facilitators (Naidoo, 2001; see Table 1). As a deliberative method, study circles help promote self reliance since in-group learning is encouraged rather than turning to outside experts. The goals and resources of the local community dictate the scope and size of the program but study circles tend to be cost effective. Study circles are open-ended and dynamic, making them particularly flexible when compared to other deliberative forums. Given this method relies on peer-to-peer learning, limits exist such as the need for outside experts for more extensive or technical programs. 5.3. Participatory budgeting Originating in Porto Alegre, Brazil, participatory budgeting (PB) processes are utilized in a number of countries, including Canada, India, Uganda, and South Africa (Torres et al., 2004). PB is a participatory process that allows citizens to influence directly public resource allocation (Gret & Sintomer, 2005). Porto Alegre's PB process provides an exemplar of building participatory spaces for effective, sustained engagement of citizens in policy making. Citizens assertively engage in decision processes, transforming traditional patterns of policymaking, and establishing new standards of transparency and accountability. The participatory budgeting of Porto Alegre illustrates productive links among participation, legitimate macroeconomic policies, and more equitable governance. Citizens actively formulate the city budget during a year long process across two phases of preparation and structured deliberation. In the preparatory phase, sixteen city meetings take place to develop themes for the larger regional meetings, organized around topics such as transportation, health, economic development, and taxation. In the city meetings, all citizens attend and determine the allocation of local budgets. In addition, citizens elect delegates to the city-wide deliberative phase. Two meetings constitute the deliberative phase. In the first meeting, delegates from the regions present their themes ranked in priority to the Mayor and government officials. Government officials have the responsibility to analyze the proposed themes and report the technical and financial feasibility of citizens' demands. A budget matrix is prepared that lists expenditure items, costs, and revenue streams. In the final meeting, delegates review the government's analyses, confer, and vote upon a final version of the plan of investments and spending (Torres et al., 2004; see Table 1). 5.4. Citizens' jury Inspired by the legal jury model, the citizens' jury method involves a small group of citizens who act as representatives of society and are willing and able to deliver decisions in the public interest. The citizens' jury is provided with background information and hears testimonies from experts in order to reach a conclusion about the best course of action on a public problem. Citizens actively participate by directly questioning expert witnesses, scrutinizing the evidence, and deliberating as a group to arrive at a verdict (Torres et al., 2004). Prajateerpu (translated as ‘the people's verdict’) employed a citizens' jury of subsistence farmers in Andhra Pradesh, India to assess issues key to the future of local farming. In the late nineties, subsistent farms were failing, farmers were burdened with debt primarily from the costs of pesticides, and farmers' suicides were rising. Supported by the Andhra Pradesh ministry and the World Bank, fundamental transformations of the food system were first proposed in the Vision 2020 plan without the involvement of the rural people affected by

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Table 1 Evaluations of participatory and deliberative experiments in subsistence markets. Process validity

Dialogical validity

Outcome validity

Participatory social auditing of plantations in Costa Rica (Bendell, 2001; Prieto- Carrón, 2006; Werre, 2003)

Good –Input sought from a diverse group of workers and stakeholders –Conversations with workers revealed issues like their knowledge of rights and job security

Mixed –Allowed for discovery and exploration of novel issues, but little opportunity for education on fair standard codes –Only a few women were aware of corporate code of conduct for social responsibility

Low –More focused on getting participation and input from stakeholders as opposed to engaging stakeholders in analyzing the findings, deliberating, and forming action plans (except for focus group interactions)

Study circles of Zimbabwe Farmers Union in Gokwe North (Bond-Stewart, 2005; Naidoo, 2001)

Good –Socially inclusive and relatively informal, taking place in comfortable settings –Good fit with local traditions since locals often form informal social support groups to improve their lives

Good –Educational materials used during the study circles –Proved useful even after the study circles were completed because problems with cattle were identified

Very good –Emphasis on building citizens' confidence and communicative capacities –Facilitators ensured a balanced discussion –Encouraged discussions and knowledge sharing rather than lecturing

Participatory budgeting in Porto Alegre (Baiocchi, 2001; Gret & Sintomer, 2005; Torres et al., 2004)

Very good –About 50,000 citizens annually –Marginalized groups have a stronger presence relative to their population when compared to affluent residents –Trade unions and business associations also included

Good –City agencies offer seminars on budgeting for citizen delegates and interested participants from the regional assemblies

Good –Economically disadvantaged groups actively engage in decisions on public expenditures –Survey finds that the poor participate during meetings at least as much as middle class participants

Prajateerpu citizens' jury in Andhra Pradesh, India (Pimbert & Wakeford, 2002; Wakeford & Pimbert, 2004)

Good –Farmers whose livelihoods were threatened by policies were key players –While formally uneducated, most farmers possessed substantial indigenous knowledge about their local land and crops

Very good –The jurors were able to learn about unfamiliar subjects, such as GM seeds and information was presented clearly –Increased capacities to speak publicly, defend position; and distinguished between logical evidence and propaganda

Mixed –Provided safe spaces, discussions guided by reasoned claims –An oversight panel checked for possible logical biases and inconsistencies in the discussion –At times experts were patronizing and disrespectful

Good –Identified constraining conditions, particularly for women –Local management teams implemented plan of corrective action –Helpful feedback for integrating CSR into Chiquita's core business strategy (additional resources for CSR) Good –Establishment of livelihood activities related to cattle farming –Participants benefited from gained technical knowledge –Community benefited from new alliance on breeding with the local veterinary office Good –Increased efficiency and less corruption –Influenced the investment of more than $1.6 billion Reals (about US$ 930 million) much toward poverty policies –Local businesses benefit from greater transparency of taxes and fair contractor bids Good –Significant impact on the farming policy –Report influenced advisory and technical committees on local agricultural policy –Global media coverage on inclusion of local farmers in policy making

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Democratic validity

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the new policies. The Prajateerpu citizens' jury was designed to let rural farmers give input on the Vision 2020 plan, which involved reducing the number of people farming the land from 70% to 40% and consolidating small farms in order to use new technologies, such as genetically modified crops (Pimbert & Wakeford, 2002). Poor women farmers from lower castes represented the majority of participants and rural farmers. The expert witnesses were representatives from government, industry (SYNGENTA Seeds AsiaPacific), and civil society. The process combined elements from both citizens' juries and scenario workshops. The jury was presented with three scenarios (30-minute videos) regarding the future of local farming: the scenario proposed by the Andhra Pradesh ministry, a scenario to grow eco-friendly organic crops for export, and a scenario based on self reliance with greater localization of production and markets. The jury's task was to either choose a scenario or create a new vision and develop an action proposal to realize their preferred vision. In making their decisions, the jury consulted with the expert witnesses about the feasibility and the economic and environmental impact of the different scenarios. At the end of five days of hearing, the jury's verdict was to reject Vision 2020's proposal to consolidate land and displace rural farmers. Instead, their vision fused practices that increased self-reliance and community control over food production and developed indigenous knowledge and local institutions to support agriculture. Overall, Prajateerpu is a good example of an equitable deliberative process (see Table 1). 6. Obstacles and incentives for participation in subsistence markets Even though deliberative mechanisms can provide the most marginalized social groups the opportunity to be heard, they are hardly a panacea given the complexity surrounding corporate–stakeholder interactions. Building participatory spaces is especially challenging in countries that lack traditions of free speech and civic engagement (Fung & Wright, 2003). Entering spaces of participation can be intimidating for subordinates in the social system, undermining participation as a reasoned, fair democratic practice (Cornwall & Coelho, 2007). Power is embedded in language through various cultural discourses, which may lead to uneven access to the deliberation process and disadvantage in arguments (Kohn, 2000). Moreover, deeply engrained power hierarchies or political systems can affect the outcome of a public deliberation process (Cornwall & Coelho, 2007). As a case in point, even though the Prajateerpu jury is acclaimed for the use of public hearings that provided relatively safe spaces for the marginalized farmers, at times, experts were patronizing and disrespectful. For instance, a senior government official dismissed questions about potential mortalities due to pesticides as follows: ‘We cannot do anything. It is in the hands of God.’ Not surprisingly, some of the jurors were offended and refused to ask questions immediately following this comment. Unsurprisingly, deliberative spaces are often filled with those people who are most motivated, educated, and articulate (Button & Mattson, 1999). Advocates of participatory governance often assume some degree of socioeconomic and political equality is necessary for these methods to be effective. Therefore, some researchers question whether participatory deliberations can be successful in developing countries where societies are highly stratified economically, educationally, and socially. Yet promising instances of deliberative democracy in the developing world are emerging (Gupte & Bartlett, 2007). DIPs are increasingly employed to improve citizen participation in decisions regarding policy making and governance in subsistence markets (Gastil & Levine, 2005; Rowe & Frewer, 2000). Examples of participatory exercises in developing countries are also notable, including healthcare policy forums in Brazil, Bangladesh, and Zimbabwe (Cornwall & Coelho, 2007), as well as participatory initiatives to find local solutions to improve infrastructure like sanitation in

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Bangladesh (Weidner et al., 2010) and communication services in Uganda, Nepal, and India (Beardon, 2004). India's legally established village councils (i.e., gram panchayats) are likely the largest deliberative association ever created involving two million villages (Rao & Sanyal, 2010). Good deliberation hardly occurs naturally but needs significant organization to invite speakers and participants, formulate rules, and prepare background materials. More often than not, participants who are interested in listening outnumber those who want to engage in deliberation actively. Public deliberations can be a process that reveals deep differences rather than a smooth transition to a consensus. Citizens may become disinterested or cynical for a multitude of reasons. Poverty is a very real challenge to citizen participation. Socially and politically excluded people are more likely to become poor, and the poor are more vulnerable to social exclusion and political marginalization. Poor people have to work long hours to make a living so priority is given to issues of livelihood or matters of immediate urgency (Mahmud, 2007). They have little incentive to participate unless potential outcomes exist that are immediate and relevant (Gaventa, 2006). Even if deliberative spaces were created, participants must believe that those people in power are committed to taking action (Cornwall & Gaventa, 2000). In the face of these significant challenges, many cases provide cause for optimism, such as councils for participatory budgeting (Gret & Sintomer, 2005), debates on health care services in Brazil (Cornwall & Coelho, 2007), village councils (Gupte & Bartlett, 2007), and grass-roots anti-corruption initiatives in India (Ackerman, 2004). What we can learn from these experiments in deliberative democracy is that poor people are more likely to inhabit deliberative forums when they are ongoing and established spaces. Moreover, the deliberate space must wield real power, such as influencing the distribution of resources to be more poor-friendly (Rao & Sanyal, 2010). For example, in face of waning public involvement in their municipal funds program, the local government in Oaxaca, Mexico effectively increased community participation by making the distribution of resources fairer (e.g., redistribution of funds toward poverty alleviation and publicizing formulas used for poverty measurement and resource distribution). In particular, transparent processes and policies for fair resource allocation increased trust which led to greater community participation (Ackerman, 2004). Given that dozens of these methods exist and they are often customized to unique cultural contexts within different economic and political structures, a challenge exists to move beyond the level of anecdote to demonstrate significant results. To bridge the gap between the normative appeal and the empirical applications of citizen engagement, Gaventa and Barrett (2010) did a meta-analysis of a nonrandomized sample of a hundred cases across twenty countries to yield insights on the effectiveness of these methods. Specifically, they coded 830 outcomes to find that 75% of outcomes were positive and 25% were negative across the construction of citizenship, the practices of participation, accountability, and social inclusiveness and cohesiveness. While these findings are generally positive, outcomes are often a mixed bag. For instance, over one-third of positive outcomes coded involved citizens increasing their knowledge and awareness of their rights and gaining a greater sense of empowerment and agency. Still, opening deliberative space does not ensure that positive outcomes will be realized when participation is merely tokenism or even reinforces the participants' marginal status. For the poor to play an active role in participatory spaces, investment is needed in skill and confidence building. Capacity building programs that hone critical skills and provide civic education are important in this respect. REFLECT (Regenerated Freirean Literacy through Empowering Community Techniques) and PACT's women's empowerment programs are examples of ongoing successful initiatives that deliver the livelihood skills so valued by the poor. Moreover, these programs are designed to be catalysts for social change

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as they encourage participants to engage in critical dialog, increase awareness of social inequities, and eventually mobilize communities (Corus & Ozanne, 2011).

7. Conclusion In countries where little governmental protection of community rights exists and corporate regulation is weak, the relationship between the local community and the firm takes on even greater importance. Deliberative processes promise to build legitimacy through reason giving, which renders debates less daunting if ample opportunity is provided to engage in dialog and explore shared concerns (Torres et al., 2004). Moreover, citizens, workers, or any other stakeholders can become more knowledgeable by participating in the giving and taking ideas, as well as more accomplished in terms of civic, participatory, and deliberative skills (Corus & Ozanne, 2011). From the perspective of the corporation, sustained interest in local communities' needs and perspectives can help build stronger relationships and greater trust (Becker-Olsen, Cudmore, & Hill, 2006). In fact, authentic dialog between companies and communities can create genuine two-way relationships that can bring unexpected advantages. A noteworthy example is the treatment of McDonalds during the 1992 South Central Los Angeles riots. McDonalds had an ongoing commitment to the community and this good reputation was achieved by investing in local health care through the Ronald McDonald houses and through their work to alleviate local unemployment. While the majority of businesses in the area were severely damaged in the riots, McDonald's stores were left unharmed (Hess, Rogovsky, & Dunfee, 2002). The cases presented here are promising experiments in more participative and deliberative decision making in subsistence markets. Even though our focus here is on the corporation, it is worthwhile noting that within any organization greater deliberation can be used to legitimize practices, broaden objectives, and democratize engagement with their constituents. Deliberative democratic processes provide ways in which to make NGOs and multilateral organizations more democratic and pluralistic. The accountability of NGOs is an emerging issue of concern, especially their “downward” accountability to their poor and marginalized constituents in developing countries, which can be enhanced by using some of the methods discussed here (Kilby, 2006). Multilateral organizations, like WTO and IMF, are increasingly criticized for being relatively free from the scrutiny of national governments; deliberative methods can provide measures through which the activities of multilateral organizations can be brought under the closer scrutiny of a wider variety of constituents (Verweij & Josling, 2003). These applications suggest that even those people who are most marginalized will participate in deliberative spaces if they are given the opportunity and believe that the outcomes will inform actual practices. Thus, a more rigorous corporate accountability could be forged in subsistence markets based upon wider community participation and deeper deliberation.

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