ThePoliticalObligationsofCorporations:

JustifyingARolefortheStateinEnforcingAccountability

CarolA.Tilt*andGillianS.F.Lubansky**

*LecturerinAccounting,SchoolofCommerce,FlindersUniversity,SouthAustralia
**TutorinPhilosophy,SchoolofPhilosophy,LaTrobeUniversity,Victoria

Correspondenceshouldbeaddressedto:
DrCarolA.Tilt
SchoolofCommerce
FlindersUniversity
GPOBox2100
AdelaideSA5001
Ph(08)82013892
Fax:(08)82012644
Email:Carol.Tilt@flinders.edu.au

TheauthorswishtothankLaurenceLesterandNicholasMangosfortheir
helpfulcomments.Allerrorsaretheresponsibilityoftheauthors.

AccountabilityandCorporationsPoliticalObligation:
JustifyingARolefortheStateinEnforcingtheSocialContract

Abstract
Manypapers written aboutsocial andenvironmental accounting andreporting
discusstheaccountabilityaspectofpublicdisclosure. Withinthesediscussions
thereisanimplicitassumptionthatthereexistsasocialcontractbetweensociety
andbusiness.Somepapersexplicitlyacknowledgeitsexistence,butfewattempt
toinvestigatethenotioninanydetail.Thosethatdo,appeartorelyonachange
occurringintheattitudeofcorporationstothesocialenvironment. Thispaper
considers this unlikely, and that the state must play a role in ensuring the
accountabilityoforganisations.Itexaminescorporationspoliticalobligationand
whereitlies,relyingonthenotionoffairness.Thepapersupportsthecasefor
requiringthestatetoregulatesocialreporting. Itconcludesthatargumentsfor
greatercorporatedisclosurebasedondutiesorrightsmaybestrongeriftheyare
usedjustifythepoliticalobligationofcorporationstoobeythestate,ratherthan
waitingforachangeincorporateconscience.

Keywords:

PoliticalObligation;FairnessTheory;SocialContract;Socialand
EnvironmentalAccounting;TheState.

Introduction
Overtenyearsago,Grayetal.(1988)providedthefirstpaperwhereaccountabilityandthe
socialcontractwereinvestigatedaspartofatheoryforcorporatesocialreporting(CSR).
Since then, many papers have implicitly and explicitly acknowledged the existence of a
contractbetweensocietyandbusiness,butdolittlemorethanuseitspresenceasjustification
forsocial reportingwithout referencetoits complexities orits history(see,forexample,
Heard&Bolce,1981).Giventhatworkonthesubjectofsocialcontractshasbeenpublished
sincethe1700s,thiscanonlybeseenascursoryattention.Yet,socialcontractarguments
have been central to the tradition of social change and reform (Donaldson, 1982). As
acknowledgedbyDeegan(1998)however,manypapersusethenotionofthesocialcontract
aspartofothertheories,eg.legitimacytheory,wherethereisasocialcontractbetween
the organisation and those affected by the organisations operations and which may be
revokediftheyoperateoutsidethetermsofthecontract(Deegan,1998,p.17).
AmajorcriticismoftheearlyworkundertakenindevelopingatheoryforCSRhasbeenthat
thestatesrolehasbeenignored(Grayetal,1988;Lehman&Tinker,1997)oritisassumed
thatthestatepursuesaneutral,mediatingroleinconflictresolution(Tinker,1991,p.29).
Mostalternativeapproaches,suchasthoseencouragingparticipatorydemocracy(Lehman,
1995, 1996), suggest some form of mandated disclosure or reporting by corporations,
imposedbythestate,forthebenefitoftherestofthecommunity. Thatis,enforcingthe
socialcontractasopposedtobeinglefttomarketforces.Whatisnotconsideredhowever,is
the accountability or obligation that arises from this, and why corporations (or other
institutionsforthatmatter)shouldbesoobligedtoprovidesuchinformation.Theconcernof
this paper is twofold. First, the paper considers the states role in enforcing social
accountability.ItadvancesthenotionraisedbyLehmanandTinker(1997,p.10)thatwithin
middleoftheroadliberalism,itself,thereexistsjustificationsforthestatetomovebeyondits
[current] remit. Second, the paper considers the political obligation that necessarily
underliesstateregulation,andusesfairnesstheorytojustifysuchobligation.

Therehavebeensomenotableattemptstoelaborateonthenotionofsocialaccountabilityin
the literature. Lehman (1995) uses Rawlstheory of justice to examine and support the
conceptsofaccountabilityandtransparencyinenvironmentalreporting(consideredtobea
subsetofsocialreporting). Hediscusses thesocial andmoral obligations (p.394)of
organisationstoprovideanaccountoftheiractivities,andthataccountantshaveaduty(p.
403)toprovidesuchanaccount.WhilethispaperhasnoargumentwithLehmans(1995)
ideals, it questions whether such a duty will ever be recognised and acted upon without
coercion.Similarly,otherresearchersdiscussreasonsthatcorporationsshouldaccountfor
theiractionsbasedonmoral,ethicalorfairgrounds(Gray,1992),butdonotconsider
howweensuretheshouldbecomesdoes.
This paper takes the position that while the desirability of accounting for social and
environmentalactivitiesoforganisationsisundisputed,themeanstoensureprovisionofthat
accountmustlie(atleastinpart)withthestate.Thatis,regulationorlegislationisnecessary
toforceorganisationstoreportasafirststeptowardsachievingsocialaccountability. A
justificationfortheadherenceoforganisationstosuchregulationscanthenbebasedonthe
notionofpoliticalobligation(asopposedtosimpleobedience)alongsimilarlinestothose
presentedbyLehman(1995).Inthispaperanargumentbasedonfairnesstheoryispresented.
Thepaperoutlines howsuchactions bythestatecanbeseenasbeingwithinthestates
currentfunctions,andwhycoercionbythestateisjustified.
Thepaperisstructuredasfollows.Thenextsectiondiscussesthestateasitisdefinedinthis
paperandanexaminationofitsroleinenforcingsocialaccountability.Thisisfollowedbya
generaldiscussionoftheliteratureonpoliticalobligationanddetailsoffairnesstheorythatis
drawnuponinthispaper.Finallythetheoryisappliedinadiscussionoftheemergenceand
enforcementofsocialandenvironmentalaccountingpractices.

TheState
Totalkofastateistouseashorthandtermforawayofthinkingaboutthepoliticalrelations
betweenmembersofacommunity.Thestateisanindependentpoliticalcommunity;arule
3

governedassociationofpeopleoccupyingadefinedterritoryandorganisedunderasovereign
governmentthatis,onethathassupremecivilpowerandauthority.Asovereignstateisone
thatexercisesauthorityasamatterofrightoverallpersonswithinthatstateandthathasno
authoritycompetenttooverrideitwithinitsterritory.Furthermore,ifthereshouldbeconflict
betweenindividualcitizensandthestate,thestateassovereignwouldprevailinthatconflict.
Noteverypoliticalentitywecallastatehasfullsovereignty. Stateswithinafederationor
commonwealth surrenderpartoftheirsovereigntytothefederalstate.Referencetostatein
1

thispaperistosovereignstates.
Therearecertainfeaturesofastatethatdistinguishitfromotherassociations(Benn&Peters,
1959):
1. A state claims compulsory jurisdiction over all those within its territorial
boundariesandthoselegalboundariescanalsoincludeexternalterritories. It
claimsuniversaljurisdictionoverthosewithintheboundaries,whethertheyare
membersofthatstate,thatis,citizens,orresidentaliensormerelyvisitors.Its
rulestakeprecedenceoveranyotherrulesapplyingwithinitsborders,suchas
thoselaiddownbythechurch,forexample. Associationsotherthanthestate
have limited power and areas of influence. The state, by contrast, has a
substantial amount of power and the potential to interfere in the lives of its
residents.
2. Thestatesprimaryfunctionsaretokeeporder,maintaininternalsecurityand
protectitselffromexternalthreats.Italsoprovidespublicgoodsforthoseliving
initsterritory.Onethingthatdistinguishesstatesfromotherformsofassociation
isthatthescopeofthestatesfunctionsisindeterminate.
3. Themethodbywhichastatecarriesoutitsprimaryfunctionsisthroughtheuse
oflaw supportedbycoercivepowers. Althoughmostassociations canapply
sanctionswhentheirruleshavebeenbroken,theseareonlyenforceableifthe
statepermitsthemtobesoenforced. Onlythestatehastherighttogivethis
permissionsinceithasamonopolyonthelegitimateuseofcoercion.

1 AsintheCommonwealthofAustralia,nottheBritishCommonwealth.

LiberalDemocracy
ThediscussioninthispaperisconcernedonlywithWesternliberalstates.Suchstateshave
thefollowingfeatures:theyarepluralist,multiparty,representativedemocracies,inwhich
governmentsareelectedforlimitedtermsbyuniversalfranchise.Thefamousfourfreedoms
ofthought,speech,conscienceandofthepressareofficiallyendorsed,asisthefreedomto
dowhatonewillsunlessanduntilitisrestricted bylaw. Thesestates haveaprimarily
capitalistmodeofproduction,inwhichthemotivationforproductionisprofit,andthemeans
areprivatelyowned.However,therearenotableareasinwhichthestateintervenes,suchas
health,welfareandeducation,and,tosomeextent,inthemarketplaceitself(Linley,1986).
IthasbeenobservedthatWesternliberalstatesareinfactliberaldemocracies,combining
principles of individual liberty with principles of collective selfgovernment and
egalitarianism(Barber,1985,p.55).However,liberaldemocracies,asmanypeoplehave
claimed,areneitherfullyliberalnorfullydemocratic. Thedemocraticideal,ofmaximum
participationofallcitizens,isindirectcontrasttotheliberalideal,whichhasatitsheartan
idealoffreedomtopursueonesownends.Liberalsfocusonthefreedomoftheindividualto
choosetheirownroad,consistentwiththefreedomofothers.Thatis,onehastherighttodo
asonewishessubjecttotheconstraintthatonemaynotinfringeontherightsofothers.The
salientpointtonoteisthatitistheindividualwhotakesprimacyoverthegroup.Theviewof
classicliberaltheoryholdsthatpoliticallibertyisconcernedwiththerestrictionofthepower
ofthegovernment,notmerelywithrestraintsimposedeitherthroughlackofcapacity,means
oropportunity.Thestate,inthepurestformofliberalism,isnotpermittedtoencroachonthe
citizensactivitiesexcepttopreservetheirfreedom. Ifthereweresuchathingasapurely
liberalstate,itwouldactasanarbitratorandwatchdog. Itshouldbestrictlyneutralwhen
dealingwiththecitizens,sothattheprocessesusedinsodealingwithconflicts between
citizenswouldnotfavouranyoneinterest,butinsteadwouldfacilitatethemaximisationof
eachcitizensfreedom.
Liberal democratic states generally havearepresentative democratic system. Democratic
systemsofgovernmenttrytoensurepoliticalequalitythroughuniversalsuffrageandequality
5

of opportunity in influencing political leaders. Western liberal democracies are not

democraciesintheclassicalsenseinwhichallcitizensmakeallthedecisionsbecausethe
growthoflarge,moreimpersonalstatesmadethisimpossible. Representativedemocracies
areacompromiseinwhichordinarycitizenshaveaccesstothepoliticaldomainbychoosing
theirrepresentative.Therepresentativevotesinparliament,notasthecitizentellshimorher
to, but as though he or she had a mandate to act as the citizens might have chosen to.
Pateman(1979)suggeststhatinfacttheonlydemocraticelementinmodernstatesisuniversal
adultsuffrage,enablingalladultstoatleastvoteforarepresentative.Theproblemforliberal
democraciesisthatthemoredemocratictheyget,thelessliberaltheyarelikelytobeand
viceversa.Inspiteofthisproblem,aliberaldemocraticsystemisarguedtobebetterthan
any other political system because it better promotes peoples individual rights. One
justificationforthestateisthatitenhancesthefreedomofeachindividualinthecontextof
theconstraintsforceduponpeoplethroughlivinginasociety.Itismostlikelythatliberal
democraticstateswillhavedemonstrablepoliticalobligation.Thisissobecausetheliberal
aspect ofthepolitical system tries toensurepeoples individual rights andfreedom, and
permitsthemtomaketheirowndecisions.Atthesametime,thedemocraticaspect,intheory,
ensuresthatpeoplehaveadequaterepresentationinthepolicymakingoftheirstate. The
citizensofaliberaldemocraticstate,includingcorporatecitizens(seediscussionlater),areto
alargeextentboththebeneficiariesandtheinitiatorsofruleinthosestates,andtheirpolitical
obligation,ifany,willbederivedfromtheirinvolvementintheactivitiesofthestate.The
statewill functionmosteffectively whencitizens accede toits demands. Oneimportant
politicalobligationistheobligationtohelptomaintainthestatewhich,formostcitizens,is
generallydonebyobeyingthelaw.
Green(1988,p.5)suggeststhatastateislegitimateonlyif,allthingsconsidered,itsrule
is morally justified. Where such ruleis not morally justified, there can benopolitical
obligation.Tosaythatastateislegitimateistosayboththatthestatefunctionsaccordingto
acceptedrulesaccepted,thatis,bythosewhoaretoobeythemandthatthestatesuseof

powerisjustifiedinthatitsupportsandfulfilsthepoliticaldesiresandvaluesofthepeople
withinthatstate.

PoliticalObligation
Thispaperviewspoliticalobligationasobligationthatarisesfromparticipationwithinthe
politicalareasoflife,aswillbediscussedbelow.Itmightbethoughtthatpoliticalobligation
creates legal obligation, but this is not the case. To have a legal obligation is to be
constrainedtocomplywiththoserulesestablishedbythelawmakingbodywithinaparticular
politicalcommunity,justbecausetheyaresoestablished. Onecanhavelegalobligations
withouthavingpoliticalobligations,butifonehaspoliticalobligationsthenoneautomatically
haslegalobligationsaspartofthatpoliticalobligation.
Manyofthedemandsourpoliticalcommunitymakesofusarecouchedintermsofobeying
thelaw,anddoingsoisassumedtobeademonstrationofouracceptanceofourpolitical
obligations. Acitizen isamember ofapoliticalcommunity, unlikesomeone,suchasa
residentalien,whoismerelysubjecttoitscontrol.Thefollowingdiscussionassumesthatif
anyonecanbeheldtohavepoliticalobligation,itwillbethosepeoplewhoarecitizensofa
state.Infact,partoftheconceptofpoliticalobligationisthatitappliesprimarilytothose
peoplewhoarefullmembersoftheirpoliticalcommunity ,includingcorporationsaswillbe
2

discussedlater.
Askingtheordinarypersonifwehaveanyobligationtothestatemayelicittwodifferent
replies.Oneisareplyfocussingonobedienceforpurelypracticalreasonssuchassecurityor
fearofsanctions,andthisreplymaybegivenbybothcitizensandresidentaliens.Theother
replyconcernsthespecialrelationshipthattheybelievecitizenshavewiththestatethatstands
apartfromthepracticalquestionsofcommunityliving.Thispaperisnotconcernedwiththe
prudentialreply. Itsconcerniswhetherthereisaspecialrelationshipbetweencitizenand
state, whether there are any obligations attached to citizenship, and the philosophical
explicationforthatobligation.
2

IntheLockeansense,whichrequiresactivecommitmenttothestate(seeLocke,1952,section119).

JustifyingPoliticalObligation
Modernliberaldemocratictheoryholdsallcitizenstobepoliticalandlegalequals.Thestate,
astheembodimentofthepoliticalcommunity,isanentitythatorganisesandadministers
community systems; arbitrates to resolve conflict, both civil and criminal; carries out
programstoachievesocialjusticeandotherwelfare,healthandeducationprograms;and
providesessentialgoodsandservicessuchasroads,defence,andsoon.Manypeoplebelieve
thatpartofthestatesroleistoensuretheprovisionofthesegoodsandservices.Thatmost
modernstatesdosoisobvious.Thisdoesnotrefertoanyspecificstate,buttomodernstates
thatprofesstobeliberaldemocracies,sincetherearesufficientsimilaritiesamongthemthat
theseremarkswillapplytothemallinbroadoutline.Thequestioniswhethertheprovision
ofthesegoodsandservicesgivesthestatetherighttoanyrelationshipwithitscitizensapart
fromitsroleasadjudicatorandprotector.
Tomanytheprimarypurposeofthestateisitsmaintenanceandtheconcomitantprovisionof
goodsandservices.Sincethisisthecase,therearegoodreasonsforthinkingthatitisfairto
ensurethatallcontributetotheprovisionofthosegoodsandservices.Thisisparticularlyso
sincethosegoodsandservicesincludesuchthingsastheprotectionoflawandgovernment,
whichareavailabletoall.Thepointiswhetherthestatesprovisionofgoodsandservicesis
sufficient return to the citizen for the costs inherent in the restriction of autonomy and
foregoneenjoyment.
Therelationshipofcitizens withthestateisareciprocatingone,inwhichbothstateand
citizensmakedemandsoneachother.Citizensexpectthatthestatewillprovide,oratleast
facilitatetheprovisionof,certaingoodsandservices.Some,suchaswelfare,healthservices
oreducation,couldbeprovidedbyprivatecontractorstothosewhocanaffordtopayfor
them.Moredifficulttoprovideprivatelyarepublicgoods,suchasdefence,policing,clean
airorunpollutedwater.

TheRoleoftheStateinSocialAccounting
Gray(1992)discussestheneedfororganisationstobecometransparentandaccountableand
provideanarrayofargumentsinsupportofthisclaim.Lehman(1995)assertsthata...moral
obligation exists toprovide additional environmental information inpublished accounting
reports(p.393)butsaysthatthis...isnotacallformoreinformationandmoreregulation
(p.408).Hesuggeststhatinclusionofenvironmentalinformationinannualreportsisfairand
justandthereforeshouldbedone.Lehmanadmitsthathisargument...doesnotimplythat
justicewillprevailoverpowerfulinterestgroups,butstatesthatfailuretoaccountwillmean
an ...individuals life goals will not be attainable leaving their life empty and vain
(Lehman, 1995, p. 408). Such emotional predictions seem somewhat at odds with the
assumptionthatregulationisnotnecessaryimplyingthatcorporationsmightsuddenlyfind
asocialconsciencethathashithertogoneunnoticed.Lehman(1995,p.405)does,however,
considerthepossibilitythatwemaywishtorevisethelawbyperhapsincludingarefined
version of Gray et al.s (1987, 1991) compliance with statute approach. A possibility
supportedinthispaper.
Similarly,Donaldson(1982)suggeststhatifcorporationsdonotfulfillthetermsofthesocial
contract and enhance the welfare of society, they will receive moral condemnation from
society. Thismaybeso,butmoralcondemnationmaynotbeenoughofathreattocause
themtoreformtheiractivities.Theonlywaytoensurethatthetermsofasocialcontractare
metistohavethosetermsenforced.Suchenforcementcanonlybeprovidedbythestate.
Oneofthestatesmajorroles,asdiscussedabove,istomaintainthecontinuationofthestate
thisisparamounttotheargumentthattheplanetmustbeprotectedorthestatecannot
continue to exist. Additionally, the state must act it own best interest rather than be
manipulatedbypowerfulsubsetsofthestate.Self(1985,p.187)assertsthatanimportant
indextothewelfareofanysocietyisthequalityandsafetyofitspublicdomainthe
streets,parks,communitybuildings,etc.whichprovidethemeetingplacesforavitalcommon
life.Itisnotdifficulttoexpandthislisttoincludeareasofthenaturalenvironment,andto

suggestthatpreventionofmanipulationbycorporatecitizens(certainlyapowerfulsubset)
isintheinterestoftheremainingcitizens.
Fairnesstheory(asdiscussedbelow)suggeststhatthosewhobenefitmoreshouldbearmore
of the burden (thus the argument in favour of a progressive tax regime, (see Lubansky,
1994)). Corporationsarehighearners,oftenattheexpenseoftheenvironment,andthus
should bear more of the burden for protecting it. Similarly, they must provide greater
amountsofinformationtofacilitatethefairflowofinformationbetweenpartiesthatmakeup
theventure(Ijiri,1983;Pallot,1991).AssuggestedbyPallot(1991)greateraccountability
isthequidproquoforgreaterpowerorcontroloverresources....Thus,theobviousrolefor
thestateistoenactenvironmentalprotectionlawsinordertomaintaintheexistenceofthe
planet.Therecentincreaseinenvironmentalprotectionlegislationprovidesevidencethatthis
rolehasbeenaccepted.However,alessobviousbutequallyimportantroleofthestateisto
ensureadherencetothoselawsmosteasilythroughcompliancechecksie.accountingor
reporting.
Lehman(1995,p.408)summariseshisessayonenvironmentalaccountingasidentifyingthe
...obligationsofcorporationstoprovideanaccountoftheiractions. Thispapersuggests
that this argument would be better utilised to support the political obligation that
corporations have to adhere to, and report on, mandatory environmental regulations
developedbythestate.
The next section briefly discusses some of the theories that have been offered to justify
politicalobligation,ofwhichtherearemany.Sincesubsequentlythispaperconcentrateson
onetheorythatgivesthemostplausiblegroundsforpoliticalobligation,providedhereisan
overviewofthemostcommononeswithonlybriefcommentsregardingtheiradequacy.

FairnessTheoryandPoliticalObligation
Implicit in this paper is the notion that the corporation is a citizen, as is an individual.
Although the literature on liberal democracies discussed above refers only to people,

10

corporations are separate legal entities and their power means they generally have more
influencethananyindividualcitizenontheactivitiesofthestate,andareabletochoosemore
easilywhethertoaccepttheirobligations.Althoughcorporationscannotvote,theirinfluence
iscertainlyfeltinthepoliticalarena,andtheyaffectthelivesandwelfareofmanypeople
(Donaldson, 1982; Miller and Ahrens, 1988). Further discussion of the legitimacy of
discussingthecorporationinthesametermsasanindividualcitizenisbeyondthescopeof
thispaper,however,itremainsanimportantareaforfuturedebate.
Theoriesjustifyingthepoliticalobligationofcitizensofastateabound.Examplesarethose
basedongratitude(Simmons,1987),thegeneralwill(Rousseau,1968),andutilitarianism
(Bentham,1967). Thetheoryofpoliticalobligationthatthispaperconsidershowever,is
basedontheprincipleoffairness,andisavariantofthesocialcontracttheory,whichis:
...atheoryinwhichacontractisusedtojustifyand/orsetlimitstopolitical
authority,orinotherwords,inwhichpoliticalobligationisanalysedasa
contractualobligation(Lessnoff,1986,p.2).
TheoriginalworkontheprincipleoffairnesscarriedoutbyHart(1955)hasbeenextended
andmodifiedbyRawls(1972).Rawls(1972,p.112)versionstatesthat:
The main idea is that when a number of persons engage in a mutually
advantageouscooperativeventureaccordingtorules,andthusrestricttheir
libertyinwaysnecessarytoyieldadvantagesforall,thosewhohavesubmitted
totheserestrictionshavearighttoasimilaracquiescenceonthepartofthose
whohavebenefitedfromtheirsubmission.
Onceamemberparticipatesinthescheme,thatmemberhastheobligationtosubmittothe
rulesofthegroupandisconsequentlyentitledtothesubmissionoftheothermembers.The
majordistinctionbetweenthetwoversionsisthatHart(1955,pg183)explicitlysays,inhis
version of the principle, that those in authority are permitted to coerce members of the
communityintocomplying,whileRawlspreferstorelyonjustice,whichheseesasintegral
tohisprinciple.

11

Theprincipleoffairnessasagroundofpoliticalobligationsaysthatpeoplehavepolitical
obligationsonthebasisoftheirinvolvementinamutuallybeneficialscheme.Itisclearlya
versionofthesocialcontracttheory,becauseitrequiresparticipationbybothpartiestothe
contract. Onepartyisthestate,which,astheresultofthejointenterprisesetupbythe
potentialcitizens,providescertainbenefits.Thereceiptofthosebenefitsgeneratespolitical
obligationonthepartofthemembersofthatscheme,whointhiscasearethecitizens,onthe
basisthatitisonlyfairthatthosewhoreceive,shouldinturngive.Thispaperassertsthat
althoughtherearemanyobjectionstoit,itistheaccountofthegroundofpoliticalobligation
mostlikelytosucceed.Oneobjectiontothetheoryisbasedontheproblemcommontoall
social contract theories, which is that few, if any, citizens actually make the requisite
commitment.Otherobjectionscentreonthedifficultiesofexplaininghowreceiptofbenefits
bythosewhohavenotmadeanycommitmentcanbeheldtocreateobligationsbutthiscanbe
metbyusingatheoryofjustice(suchasRawls)tosupporttheprincipleoffairness. The
objections can be met by examination of the value, not just economic, of the proposed
benefits.Inthisway,theprincipleoffairnessasagroundforpoliticalobligationcanbeused
successfullytoexplain,atleasttoalimitedextent,howthosewhochoosenottocooperate
canalsobeheldtohaveobligations.
It seems that the principle of fairness cannot be used to explain the ordinary persons
obligationunlessheorshehasdecidedtoparticipateinthejointenterprisesthatconstitutethe
state,whichwouldseemtoreduceittoaconsenttheory.Peopledonotdecidetoparticipate
inthestate,butKlosko(1987,1992)suggestsawaytoexplainhowpeoplecanbeobligated
toparticipateevenwheretheyhavenotintentionallyelectedtotakepartinascheme. In
Kloskos(1987,p.37)words:
the principle of fairness can be used most plausibly to establish political
obligationsbyappealingtosocietysprovisionofimportantpublicgoods.
Hethinksthatthosewholiveinastatehaveaspecialrelationshipwith,implyingobligations
to,theirfellowcitizensandconsequentlythestate,whetherornottheyareactuallyawareof
it. Although they may live in and be given benefits by the state without any actual
12

commitmentontheirpart,theyarestilltoberegardedashavingacquiredobligations by
virtueofthereceiptofthosebenefits,particularlythosethathecallspresumptivelybeneficial
publicgoods.
The problem for Kloskos claim is that people are not ordinarily obligated by receipt of
benefitsunlesstheyarefreetochoosewhethertoacceptorrejectthem,asNozick(1974)isat
painstopointout. Hisresponseisthattheprincipleoffairnesscangroundcertainlimited
casesofpoliticalobligation,whichwillincludethosewhohavenotconsciouslyjoinedany
cooperativeschemeinthewaythatissuggestedbyboththeHart(1955)andtheRawls
(1972) formulations. While it is, he says, unfair that anyone should benefit without
contributing,obligationscanbeimposedifthepersonmustunavoidablyprofitfromthe
efforts of others and the goods cannot be provided without the participation of others
(Klosko,1987,p.35).Thosewhochoosenottoparticipatecanonlydosofairlyiftheyare
abletoavoidthegoodsbeingoffered,whichmustbepresumptivelybeneficial. Otherwise,
3

thenoncooperatormusttakeontheirshareoftheburden.Thereasonsforthisarederived
fromtheprincipleoffairnessreciprocityclaims.Thatis,asKlosko(1987,p.34)putsit,the
moralbasisoftheprincipleoffairnessisthemutualityofrestrictions. Theprincipleof
fairness says, those who have submitted to those restrictions have a right to a similar
acquiescenceonthepartofthosewhohavebenefitedfromtheirsubmission(Rawls,1972,p.
112).Thatis,ifyoubenefit,othershavearighttoyourequalsubmission,and,accordingto
Hart(1955),maycoerceyoutodoso.Thismeansthatinspiteofapparentnoninvolvement,
people can be held, based on the principle of fairness, to be bound to contribute to the
provisionofcertainbenefitsbecauseoftheintrinsicvalueofthosebenefits,andsobeforced
tocontribute.
Kloskopresentsacasefortheapplicationoftheprincipleoffairnessinwhichheclaimsthat
peopleareobligedtoobeythestatebecausethestateprovidesbenefitsthatcannotberejected
by the recipient. Underlying his claim that the principle of fairness can justify political
3

Apresumptivelybeneficialgoodisonethatoneisrationallypresumedtowant,andhenceonethatonewould
hypotheticallyconsenttoproducing.

13

obligationthroughtheprovisionofpresumptivelybeneficialgoodsarethreebasic,andhe
says,uncontroversialassumptions.Theyare(Klosko,1987,p.40):
1. Therearecertainpublicgoodswithoutwhichpeoplecouldnotlive.
2. Governmentprovidesatleastoneofthepublicgoodsnotedin(1.).
3. As a rule, there are no other presumptive public goods that are
providedtotheinhabitantsofagiventerritorythatarenotprovided
bygovernment.
In relating these justifications to the point being made in this paper, people cannot live
without a relatively clean environment, thus it is certainly a presumptive public good.
Similarly,aschemetoprotecttheenvironmentcertainlyprovidesbenefitstoallmembersof
thestate(ie.membersofsociety). Finally,onlythestatehasthepowertoensureaclean
environment(corporationscoulddoitbutdonotnecessarilyhaveastrongmotivetodoso
anditisofteninconflictwiththeirgoalsofincreasingprofitorshareprice). Thedifficult
step in this argument is the one that justifies some form of accounting or reporting by
corporations about their environmental activities. The theory of social contract analyses
political obligation as a contractual obligation (Lessnoff, 1986), thus, in order to ensure
adherencetothecontract,someformofreportingorinformationprovisionmustbeincluded,
hence the argument for reporting legislation in addition to environmental protection
legislation. Just as Lehman (1995) asserts that accounting for the environment may be
justifiedonfairnessgrounds,socoercion(orregulation)bythestatecanbesimilarlyjustified.

ObligationorObedience?
Itmayappearattimesthroughthispaperthatitconcentratesonpoliticalobediencerather
thanpoliticalobligation.Thejustificationofpoliticalobligationisanexplanationinpartof
politicalobedienceoncethepracticalaspectsofthatobediencehavebeensetaside. The
establishmentofthedutyofcompliancewiththelawisone,veryimportant,consequenceof
justifyingpoliticalobligation. Therearetwopossiblemotivationsforpoliticalobedience.
Peoplemaychoosetoobeybecauseofsomephilosophicalmotivation,ortheymaydoso
becauseofsomeinstrumentalreasonfordoingso,eg.selfinterest. Withoutanadequate
14

theoryofpoliticalobligation,weareleftonlywithconsiderationsofselfinteresttomotivate
obedience. Whilepoliticalobediencecanbeandisenforceable,politicalobligationisnot.
Onetacticthatauthoritiesusetoensurecomplianceonthepartofthecitizensistoemphasise
thepoliticalobligationsofthosecitizens.

Conclusions
Insummary,thispapersuggeststhatalthoughsocialandenvironmentalaccountingcanbe
justifiedongroundsofmoralobligations,fairness orjustice, thedistribution ofpowerin
societyallowsindividualgroups(suchascorporations)toignoretheirobligationswithout
penalty. Thus,onlystateregulationcanachievetherequiredresult. Suchenvironmental
regulationisjustifiableongroundsofmoralobligationandfairness,justasitispossibleto
demonstrategeneralpoliticalobligationsonthesegrounds(seeforexample,Lubansky,1994).
Argumentsforsocialaccountabilitybasedondutyormoralobligations,orthepublicor
communitysrightstoinformationcanbeusedtojustifyregulationandcoercionbythe
state.Likierman&Creasey,(1985,p.42)statethatintheearlyliterature,manyconsidered
that...rightstooktheplaceofordinaryandeffectivelegislation. Similarly,Kant(1781)
indicatedthatamoraldutythatisatoddswithwhatwewishtodoistheonewearemost
awareof(Likierman&Creasey,1985).LikiermanandCreasey(1985,p.44)alsopointout:
Oneofthemajorproblemsofthosewhoassertmoralrightsistoprovethose
rightsunlesstheyareenshrinedinpositiverights[recognisedbylaw]andthus
enforceablethroughthecourts.
Whilealsopointingoutobjectionstothisview,theyconcludebyhighlightingthefactthat
...claims onmoral grounds have oftenbeen the forerunner tothe establishment oflegal
rights(Likierman&Creasey,1985,p.48).
Usingfairnesstheory,onecanjustify,forexample,thestatesrighttoenforcepaymentof
taxes. Itdoesnotgivethoseliabletotaxationtherighttowithholdpayment. Evenifone
objects to a proposed use for taxation money, one is still required to contribute to the

15

maintenanceoftheenterprisetheobligationonehastothegroupremainsinspiteofthat
disapproval. Onceoneiscommitted,onecannotrejectpartofthatcommitment. Onecan
onlyworktochangethewaythecooperativeventuremakesuseoftaxmoneyfromwithinthe
system,orwithdrawcompletelyfromthecooperativeventure(Lubansky,1994).
This sameargument canbeappliedtojustifythe states righttorestrictthe activities of
corporationswithregardtothesocialandnaturalenvironmentandtocoercecorporationsinto
reportingontheseactivities. Inessenceitsroleistoenforcethesocialcontractthatexists
betweenorganisationsandsociety.Thispaperdoesnot,however,considerthatregulationis
thesinglesolutiontoimprovingtheaccountabilityoforganisations.Itismerelysuggesting
thatsuchregulationisonefrontonwhichtheenvironmentalissuemustbeaddressedthat
providesanactiveroleforthestate.Arolethathelpstoensurethatbothindividualcitizen,
andcorporatecitizen,areputonaclosertoequalfootingwhenitcomes todetermining
environmentalmatters.
Ithasbeensaidthatfairnesstheory,whileattractiveasagroundforpoliticalobligation,
cannotbeusedtoexplainobligationwithinrealstates,becauserealstatesarenotobviously
cooperativeschemesofthekindonwhichKloskoandothersbasetheirdiscussion(Simmons,
1987). Theobjectionisthatthestate,ratherthanbeingmadeupofcitizenswhotogether
makeacorporatebody,hasaseparateexistencetothosecitizens.Thisseemstobetrue,but
whilethegovernment anditsattendant bureaucracymaybesetapartfromthecitizens
independentandaloof,inSimmonswordsthereisaconnectionbetweengovernmentand
citizenviathepoliticalprocesseswithwhichthecitizenmaybeinvolved.Theopportunityto
participateinthepoliticalprocess(notjustelections)makestherelationshipbetweenstate
andcitizennotthemandus,butwe.

16

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