Confirming, Infirming, and "Falsifying" Theories of Human Rights: Reflections on Smith, Bolyard, and Ippolito Through the Lens of Lakatos

Some scholars of human rights have turned their attention to a relatively new issue. A limited number of studies have sought to establish the causal impact of multinational corporations (MNCs) on human rights in the third world. ¹ These studies, conducted at several different levels of analysis, have produced some interesting (but not always consistent) results. ² My own work in this area first appeared in the Human Rights Quarterly (HRQ) in May of 1996. ³ A follow-up study by Jackie Smith, Melissa Bolyard, and Anna Ippolito (Smith et al.) appears in this issue of HRQ. ⁴ My work tended to support theoretical claims that MNCs have an overall beneficial impact on both first- and second-generation human rights at the international level. ⁵ The study by Smith et al., produced results to the contrary. Smith’s research argues that MNCs have a negative effect on rights in the developing world. ⁶ The editors of HRQ have invited my response to Smith’s article.

While I do not dispute the validity of Smith’s conclusions, I stand by the results of my own research. In order to understand how both studies provide useful additions to our knowledge of the causes of human rights violations, this article will discuss them (along with my subsequent research) within the larger context of theory testing and theory building in the social sciences. With a proper grasp of the nature of human rights theory, one can easily understand how such conflicting results are not unusual. Indeed, they are to be expected. Furthermore, the existence of inconsistent and even conflicting results from empirical testing of human rights theories does not, in and of itself, negate the validity of those theories. A brief review of Imre Lakatos’ description of theories as research programs will help to make these points clear. ⁷ Before discussing Lakatos, however, the article will summarize the combined results from this body of literature.

In the new edition of his textbook on human rights, Jack Donnelly briefly considers MNCs as an important new topic for human rights research. ⁸ Donnelly illustrates his discussion with an example taken from an advertisement placed by the Mobil Corporation in The Economist. ⁹ This ad defends MNC investments and operations in countries that have repressive governments. ¹⁰ According to the Mobil ad, if one of our goals is to promote civil and political reforms in repressive nations, then “great global companies can be a positive force for change.” ¹¹

The results of my 1996 HRQ article could be interpreted as lending support to these claims. My research showed that when the concept of first-generation rights is operationalized as Freedom House rankings on civil liberties and political rights, and then those Freedom House rankings are compared to direct foreign investment (DFI) by US MNCs, the results show strong positive correlations between rising MNC investment and better civil and political rights. ¹² Similarly, when I operationalized second-generation rights via the Physical Quality of Life Index (PQLI), and then compared PQLI scores to DFI by MNCs, I once again found strong positive correlations between increased DFI and improved human rights. ¹³ As DFI increased, literacy, life expectancy, and infant survival rates all improved as well. ¹⁴

My research argues that civil and political rights (as measured by Freedom House) correlate positively with DFI. ¹⁵ My research also shows strong positive correlations between DFI and second-generation socioeconomic rights (the PQLI). ¹⁶ The follow-up study by Smith’s team argues that my conclusions are in error. ¹⁷ When they measured civil and political rights by means of Amnesty International’s reports, or by means of the US State Department’s reports on human rights, they found weak negative correlations between first-generation rights and DFI by MNCs. Smith’s team also substituted data on DFI as measured by the World Bank for my data on US DFI (as reported by the Commerce Department). ¹⁸ They found a negative relationship between the PQLI and net DFI. ¹⁹

Has Smith’s...