Reshaping relations between the state and the private sector post-COVID-19? Exploring the social licence framework

Abstract: During the COVID-19 pandemic governments across the globe have provided unparalleled support to private sector firms. As a result, new oversight mechanisms are urgently needed, to enable society to assess and, if necessary, redress, moves by firms which have taken government aid. Many jurisdictions have seen the introduction of ‘piecemeal’ conditionality on different pots of aid. This paper argues that a better response would be to adopt a more unified approach. In particular, the paper explores the social licence framework as a potential way to ‘build back better’. It is argued that the nature of the implicit social contract between society and the private sector provides the normative force underpinning demands for a social purpose for business, and that this purpose in turn can be used to specify the conditions firms must meet to legitimise their operations. The paper then considers three core elements involved in any introduction of a social licence framework, and surveys the potential benefits and challenges that might emerge in moving towards a social licence framework.

Keywords: Social licence, COVID-19, firms, conditionality, build back better, social contract, social purpose for business.