Tanja A. Börzel and Nicole Deitelhoff
Business has become an important governor in areas of limited statehood (ALS). While the shadow of hierarchy is not necessary to incentivize companies, their contributions to governance still seem to require a minimum of statehood to be effective and legitimate. These findings point to a dilemma for (business) governance in ALS: companies are most likely to provide collective goods and services beyond their purview where those are needed the least to compensate for the lack of state governance. Yet, the literature has mostly focused on multinational companies that have their headquarters in democracies with consolidated statehood. Future research should focus on business in the non-OECD world to explore whether and to what degree consolidated statehood is necessary for governance by business to be effective and legitimate.