The Pedagogy of the Social Licence Dave Barrows, Sheila-Barrows Bergeron, MBA Alma Ionescu, MSc, PMP

Introduction

The public administration literature has advanced in both breadth and depth, new developments in theory and practice being published in numerous scientific papers and case studies around the world. The objective of public administration research is to advance scientific theories and to apply them in the practice of public administration and management (Kettl, 2015; Frederickson et al., 2015; Henry, 2015). Public administration is, ultimately, concerned with successful implementation (Barrett and Fudge, 1981; Ziemba and Oblak, 2013; Yang, 2016). Theories, such as the New Public Management (NPM) are of conceptual interest but must ultimately be judged on the basis of successful implementation (Isett et al., 2011; Henry, 2015; Yang, 2016).

This paper aims to address a gap identified in the public administration curriculum, which is an excellent theoretical tool but, like many undergraduate and graduate curricula, leaves a gap withimplementation that students must compensate for after their formal education is completed. Moreover, the pedagogical focus on practical skills related to implementation is not sufficiently developed in comparison with the focus on theory.Currently, governments are engaging experts to weigh in on problems of planning and implementation because of the difficulty of the task. Ideally, public servants themselves would be experts in creating and using simulations in the real world to understand how to prepare and fight catastrophic scenarios, or forecast the outcomes of proposed policies, or mediate the dialog between corporations and communities. Therefore, simulations are a crucial teaching tool that is insufficiently exploited in education at this point.

NPM and behavioral public policy have identified new theoretical approaches for public administration innovation. The pedagogical challenge existingin the academic and executive education spheres is to communicate the theory and identify approaches leading to successful implementation. This paper argues that the concept defined as the social licence (TSL) provides a unique opportunity to enhance pedagogy at degree granting institutions and in executive education.

Section 1 of the paper discusses and elaborates the concept of TSL. The social licence has existed conceptually since the beginning of human history. Anthropologists note that tribes had specific rewards and penalties with respect to individual behavior. Taboos could result in the ultimate form of sanction, the death penalty (Schoemaker and Tetlock, 2012; Nadel, 2013; Gudeman, 2016).

In the modern context, the concept of TSL was articulated as a focus on specific projects such as resource extraction and transportation infrastructure (Gunningham, Kagan and Thornton, 2004; Thomson and Boutilier, 2011; Prno and Slocombe, 2012). TSL arises when laws and regulations may be insufficient to fully reflect the desires of the community with respect to projects and a social licence may be required in order for the project to proceed, otherwise protests and physical forms of opposition may ensue at the grassroots (Boutilier, Black and Thomson, 2012; Morrison, 2014, 2014b; Hall and Jeanneret, 2015). A community-based social licence is reasonable. However, members of certain environmental networks may never see the Amazon rainforest yet are vitally concerned with maintaining the eco-system (Barbosa, 2015). Is it legitimate that someone in a foreign country can be a stakeholder in project activity based in another jurisdiction?

Section 2 identifies a number of well-known and understood concepts in the public administration literature, specifically networks, corporate social responsibility, regulation, and governance. Authorsthen develop a framework within which these concepts can be analyzed with respect to TSL.

Section 3 describes a number of simulations that have been used to measure and assess the impact of TSL. The models that we have analyzed are specific to the United Statesyet offer insight into the utilization of agent-based simulations to evaluate TSL implications. The models discussed function with restrictive assumptions and are quantitatively based, which implies that TSL can be analyzed via benefit-cost calculations.

In Section 4 we propose a 4-day generic Executive Education Program. Such a program can be delivered in any location, to any group of participants. In practice it may be necessary to restructure the program to reflect issues such as the age of the participants, education level, experience, organizational seniority and the context of administration in the jurisdiction, e.g. developed versus underdeveloped countries,Transparency International rank.

The final section concludes with a call to action suggesting that TSL provides an opportunity to explore the well-known paradigms in the public administration literature and, from a pedagogical perspective, provide new insights to students and executive education participants that will facilitate the learning process.

The Social Licence

TSL was initially defined in the context of mining operations impacting local communities (Prno and Slocombe, 2012; Owen and Kemp, 2013;Riabovaand Didyk, 2014; Koivurova et al., 2015; Costanza, 2016). In general, the Canadian mining executive Jim Cooney is credited with having coined the term at the end of the 1990s (Prno, 2013). TSL is equivalent to the broad, ongoing approval and acceptance of the impacted social communities (Gunningham, Kagan and Thornton, 2004; Thomson and Boutilier, 2011) and arises from individual perceptions, conceptions, and values.

Dynamic and impermanent due to potential belief changes based on new events and information that stakeholders are subjected to, TSL must be continuously earned by project owners (Meesters and Behagel, 2017). It is insufficient for a project to simply obtain agreement but it must seek continuous renewal of the TSL. Project owners must strive to fulfill their promises and avoid making inflated claims prior to commencing the project in order to obtain approval only to have them broken at later stages (Croney and Botheras, 2010; Tarras-Wahlberg, 2014; McIntyre, Murphy and Tetrault Sirsly, 2015; Holley and Mitcham, 2016; Melé and Armengou, 2016). This dynamic is essential in defining and modeling the TSL dynamics as a process that can be simulated.

A consistently ethical approach paves the way to projects that may later be added to the collective identity of the local communities. Local communities occasionally add particularly beneficial projects to their collective identity. In such cases, communities become advocates of the project due to their emotional investment and feelings of ownership (Dare, Schirmer and Vanclay, 2014). During the process of obtaining TSL from stakeholder communities, project owners must take an ethical stance by presenting true and complete information. TSL can only be based on transparency and, since it requires ongoing acceptance, must be approached responsibly (Syn, 2014). In addition, project owners should be aware that misrepresenting information will backfire when truth will surface. The next section will discuss the two components of TSL, credibility and trust.

TSL has different applicability in different legal contexts. In countries following common law, TSL can be informally awarded by the communities themselves. In countries following civil law, e.g. inLatin America, authoritiesgrant licence to operate (Sustainable Business Council, 2015). Consequently, although society perceives TSL as a relationship between companies and community stakeholders, companies tend to perceive it as a formal approval of regulators. Since they then strive only for legal approvals but not TSL, the perception sometimes leads to abusive practices such as deforestation, loss of natural habitat, pollution to degrees that threaten human health, and other undesirable consequences (Parsons, Lacey and Moffat, 2014). Even if the letter of the law holds that legal approvals are sufficient, the spirit of the law calls for community approval (Lindahl, 2016). The fact that regulators issue formal approvals is a shortcut that assumes that the regulators will represent the interest of the people and enforce their will.

Democratic Deficit

A broken connection between regulators and the communities they represent is described as a democratic deficit, which createsthegapfilled byTSL. Democratic deficit is a function of several dimensions (Wrbka, 2014):

Elections failing to induce political change lead to unresponsiveness to public pressure on regulators.
Unelected institutions (e.g. the EU) assuming executive power.
Physical distance, implying lack of closeness, between decision makers and electorate.
Interest and expert groups strongly involved in regulatory decisions, leading to bypassing democratic will.
Decreasing national judicial control regarding constitutional compatibility of laws and increasing authority of multi-country unions or other external entities.

In addition to these situations, democratic deficit often takes on a polymorphic face such as that resulting from elections where only a minority of electing citizens participate or vote dilution situations, where the will of a minority is lost in a majoritarian vote(Loewenand Grofman, 1989). Moreover, constitutional bodies cannot stop to consult the people before every move. Thus, democratic deficithas many different causes and manifestations.

It should be noted that although the very notion of democratic representation requires electors to communicate directly withtheir electedrepresentatives, growing population numbers create de facto impossibilities, leading to elected representatives being out of touch with grassroots realities (Norris, 1997; Follesdal and Hix, 2006; Norris, 2011). Thanks to technology, physical distance is less of a problem than the volume of the electorate. Therefore, regulators may also err due to lack of understanding of the public’s wishes (Van der Horst, 2007; Noveck, 2009).

The EU has attempted to mitigate democratic deficit by securing transparency and institutionalisation of interest groups. By the second half of 2017, over 11,000 interest groups were registered in the European Transparency Register (European Commission, 2017). These groups lobby to support theinterests of private and public entities with the purpose of securing laws and regulations suitable forthe purposes of the entities they represent and are often in conflict with the public interest (Waarden, 1992; Baumgartner and Leech, 2001; Aspinwall and Greenwood, 2013; Berry, 2015), hence the need for lobbying. They can shape decisions, act as information providers, and influence public opinion (Bouwen, 2002; Greenwood, 2017).

Regardless of whether it occurs due to lack of information or conflicting interests, democratic deficit is the phenomenon giving rise to a need for TSL. Moreover, it must be included in any realistic simulation of the dynamical processes related to TSL, such as the propagation of community approval or disapproval through stakeholder networks, and therefore has been included here to highlight its importance for the executive education curriculum.

Earning the Social Licence

Communities award TSL on a site-specific basis, which is why companies may not hold it for allthe sitesof the same project (Morrison, 2014). As the scope and the environmental and socio-economic impact of an operation increase, TSL is awarded with more difficulty because communities are not collective entities but interconnected individuals, “stakeholder networks” (Pahl-Wostl et al., 2007; Boutilier and Thomson, 2011; Prno and Slocombe, 2012; Prnoand Slocombe, 2014; Demuijnckand Fasterling, 2016). Therefore, acceptance must be felt by all networked groups and individuals, giving rise to new layers of complexity and dynamics (Nelsenand Scoble, 2006). However,it is still unclear how such heterogeneous entities reach consensus (Boutilier and Thomson, 2011).=

There are several normative components leading to obtaining community approval (Boutilier and Thomson, 2011):

Social legitimacy is earned by companies understanding and embracing the legal and socio-cultural, formal or informal, values and norms of the impacted community (Boutilier, Black and Thomson, 2012).
Credibilityis acquired and maintained through formal agreements with the impacted communities,meant to define and negotiate the operational rules of the company while respecting community needs.
Trust is obtained through shared experiences showing both sides that the agreement is not harmful to either one, therefore taking the longest time to build(Boutilier and Thomson, 2011).

This model has been validated through a quantitative survey of 24 questions, measured on a 5-point Likert scale and addressed to the stakeholder group of a mining operation (Boutilier and Thomson, 2011). Thanks to the existence of this model and to the efforts of Boutilier and Thomsonto validate it, the model is a useful tool that can support the executive education curriculum. By inspecting the questionnaire, students will learn how to phrase their own tailored research tools and what must be asked during a simulation for a project striving to acquire TSL. In addition, the model can be used as-is by public servants seeking empirical evidence regarding the acceptance level of an existing or future project. Similar efforts were made by Black (2010) and Richert, Rogers and Burton(2015).

Models and Measures ofTSL

Few methods are as useful for learning and as able to inform students as direct experience, empirical measurement, and decomposing the problem into its component parts. Therefore, this section is concerned with discussing the frameworks used for modeling and measuring the antecedents and determinants of TSL.

The Pyramid Model

The social licence to operate (SLO) represents community acceptance of a company’s local operations (Thomson and Boutilier, 2011b). The SLO is an integral part of TSL but narrower in geographical and utilitarian scope. An extensive study of interviews with villagers resettled by a Bolivian mining company over 15 years of operations found four levels of acceptance in SLO. The findings suggest that the level of SLO acquired by a company is inversely proportional to the socio-political risk faced by the company (Thomson and Boutilier, 2011b). The modelboundaries overlap with the determinants of TSL in the Thomson and Joyce (2008) model.

Although TSL is seemingly granted by a community, real-world settings are more complex. For example, the stakeholder network may include entities that are physically remote from the site (Boutilier and Thomson, 2011; Wilburn and Wilburn, 2011). Stakeholders may be unable to reach an agreement regarding the level of SLO due to their different opinions and beliefs. In order to acquire a certain SLO level, companies must be able to explore stakeholder networks to understand the distribution of stakeholders who can determine these levels. Based on their findings, companies may devise strategies for earning acceptance, such as forming alliances or reframing the issue at hand. It should be noted that companies seeking acceptance must have the means to reach the whole community, otherwise acceptance is hard, even impossible, to obtain (Prno and Slocombe, 2012; Syn, 2014) and this problem must be included in simulations for realism as it greatly influences the time to acquiringSLO. Moreover, public servants may need to mediate between parts, namely the community and the project owners,for the SLO to be obtained. This means that ideally students must be taught how to tackle this problem as they may or may not be able to find ad hoc solutions in real life scenarios. Consequently, an important point for the executive education curriculum regards the methods that public servants can use to facilitate discussion leading to acquireSLO. In addition, this process should ideally be a negotiation rather than a corporate monolog. During this negotiation, mediated by a public servant or not, the project owners must hear the concerns of the community and respond to them by offering information or address them by showing willingness to adapt certain project characteristics (Warhurst, 2001).

The Arrowhead Model

The arrowhead model is a modified version of the pyramid model, enabling the independent measurement of the four TSL determinants by the same stakeholder statements used for measuring the overall SLO level granted to a company. This model converts the four determinants of acquiring SLO into a continuum formed by different SLO levels.

A list of 15 statements assessing stakeholder self-reported SLO level was aggregated into the SociaLicence™ method (Thomson and Boutilier, 2011b; Boutilier, 2017) and constructed over the average of stakeholder ratings. The four-region division of the arrowhead underlines how trust and legitimacy types are obtained when the SLO level is increasing.v=v=+Thus, TSL (a) starts at a basic level of approval where the project owners have obtained economic legitimacy from regulators but only barely qualify for social approval, (b) increases as more social capital is invested into the project and interactional trust is built with the local community, which is equivalent to the socio-political legitimacy of the project, and (c) crystallises when the relationship becomes that ofinstitutionalized trust awarded by the community to the project. Notably, the lowest level of economic legitimacy is equivalent to the legal approval for operating. The highest level is where a project transcends TSLby beingadopted into the collective identity of the community (Warhurst, 2001; Prno and Slocombe, 2012; Syn, 2014).

TSL Measurement Models
TSL is measured directly or indirectly, based on levels of credibility, legitimacy, and community trust, thethree normative elements of the TSL framework (Thomson, Boutilier and Black, 2011):
1.   Indirect indicators are a rapid but superficial way to measure TSL:
(a)   Physical indicators represent community actions as an expression of sentiments of approval or lack thereof. The pyramid model, with its four levels of acceptance and their boundary conditions, illustrates this case. Physical data is hard, even impossible to source in the absence of record, and can be circumstantial due to its being based on witness reports. In addition, action can be misinterpreted.
(b)   Verbal indicators found in self-reported questionnaires are also a measure but the accuracy of the measurement depends on methodology. To encourage respondent transparency, complete anonymity must be ensured, which may not be feasible.
2.   Direct measurements can be obtained through the SociaLicence™ method (Boutilier, 2017), which maps community perceptions onto a numerical score representing the TSL level relative to the pyramid model. This method can identify the problematic aspects of the relationship, which can then be used by companies to increase their TSL level.

Regulatory Implications
TSL creates a new regulation layer which, despite being vague and not formaly regulated, imposes costs and risks such as rent-seeking behavior of communities or individual stakeholders who may try to obtain advantages beyond those strictly legal as an incentive to award TSL. The economic advantages thus sought may be disproportionately larger than the impact on the community, which would discourage entrepreneurial initiative (Colton et al., 2016). It should be noted that this behavior has not been studied empirically and its extent, if any, is unknown.In other cases, TSL may be construed as a licence to stall the start of projects (Lowey, 2016).
In this context, not-in-my-back-yard (NIMBY) describes facilities practically unanimously undesired in residential areas despite agreement that they should be built somewhere, e.g. airports or slaughterhouses (Priest, 2010). Despite their undesirable consequences, these projects areultimately necessary for the community. The generalization not-in-anyone’s-backyard (NIABY) identifies cases where everyone opposes the project. Examples are oil pipelines, fracking, and oil sand exploitation. Often TSL combines these two notions (Colton et al., 2016).

Is a Unanimous Social Licence Feasible?
In general, one core group of community supporterswill agree with the project seeking TSL (Shepard, 2008; Rooney, Leach and Ashworth, 2014; Moffat and Zhang, 2014). Strategies for obtaining extended approval must keep the stakeholder network close to avoid losing members into the group of disagreeing stakeholders (Pike, 2012; Rudra, 2015).
Uncertain community stakeholders form a second group. This group must be brought on board through regular communication with the purpose to move as many stakeholders as possible into the agreement group. The same communication strategy must aim to reduce the influence of disagreeing stakeholders and, if possible, to first bring them into the uncertain group and then up the scale towards agreement. However, it is unlikely that disagreeing stakeholders can be easily swayed and therefore the focus must be on reducing their influence. Project owners must note that TSL requires this reduction of influence to be done ethically, otherwise it contravenes the purpose. Ethical methods for reducing the influence of inflexible stakeholders are transparency, accountability, openness to listening to the community, openness to negotiating mutually beneficial outcomes, good communication, and above all maintaining high ethical standards. In other words, the project owners must prove that they are otherwise than construed by those opposing them.
Some stakeholder groups may never grant even partial TSL. It is unlikely, impossible even, to obtain TSL from members of the Deep Ecology Movement (DEM). Their core tenet is that the entire biosphere deserves equal respect and has the inalienable rights to survive and thrive regardless of the benefit of humans (Naess, 1992; Drengson, 1997).Thus, deep ecology considers all living beings as part of the same larger society, where ethical relationships between entities must be the primary motivation of the relationship. While replacing the view in which ecology is simply a branch of biology and opening a pathway to profound philosophical implications, deep ecology is the opposite of anthropocentric environmentalism (Devall, 1991). The existence of such rigid stakeholders in communities imposes new dynamics to simulation models for TSL. In section 4, where agent-based simulations are discussed, the model considers only communities with flexible individuals who change their minds and therefore such a model is ineffective for describing communities containing DEM members. Ideally, new models will be devised in following years if the crucial step of educating the next generation of researchers and public servants regarding the use of new and powerful tools, e.g. simulations, is taken today.

Case Study: New Orleans Hurricane Barrier
Despite President’s Lyndon Johnson approval and support from scientists and the Army Corps of Engineers (Taylor, 2005), the plan to build a massive flood bank meant to protect New Orleans during hurricanes such as Katrina was abandoned in the late 1970s, after environmental activists sued against construction, arguing the dam would reduce communication between Lake Pontchartrain and the ocean, thus affecting the lake’s shrimp population (Taylor, 2005; Sills et al., 2008; Morello-Frosch et al., 2011).Although the project also had other problems in addition to the lawsuit, the case suggests that environmental activists are unlikely to award TSL yet it is unclear if the importance of the project and the risks implied by its interruption were made clear to activists through appropriate communication at the time. Moreover, given the legal ruling in favor of ceasing construction, it is uncertain that the risk of a hurricane of Katrina’s magnitude was clear to all involved. Yet the situation was the consequence of having DEM members as stakeholders, creating a dynamic that must be well known and understood by project owners and public servants alike.

Potential Topics for Pedagogical Integration
Stakeholder Networks
Some authors have examined stakeholder communities in terms of network theory. Network theory is important as a precise way to understand and model human interactions in a mathematical way, therefore enabling the creation of simulations later down the line. Only connected communities (Figure 5: B, C, D) can take common decisions (Thomson, Boutilier and Black, 2011; Jackson, Rogers and Zenou, 2017). The conceptual properties of networks appear at the aggregate, global, or macro level and at the individual, local, or micro level. Global properties refer to the overall density of connections in the network, while local properties treat, e.g., how partially overlapping groups interact (Rowley, 1997; Vance‐Borland and Holley, 2011).
Every individual on the network, represented by a vertex , is connected with others by edges. The number of connections represents the individual’s degree of connection. A nodewith an exceptionally large number of connections (e.g. hub and spoke) can reach and influence these connections– a principle on which social media marketing is based. The distribution of degrees of connection over a network is itsmost important global characteristic while the mean and variance of this distribution are vital for understanding how connected the network is overall.

Hub and Spoke Network Case Studies
The real world power of networks resides in enabling communication and societal change through interactions between stakeholders. Hub and spoke networks are a special case where interaction is mostly unidirectional and the direction of interaction is from centre to edges.Thecase studies below can be used to understand the inner working of networks and the power of these constructs, which form a solid footing for creating educational simulations.

The Alliance for Climate Protection
Founded by Al Gore in 2006 to tackle climate change and partially funded from his $2.7 million Nobel Peace Prize, ACPpartnered with the National Wildlife Federation, the League of Conservation Voters, the Natural Resources Defense Council,and the Sierra Club in 2008 to form the Reality Coalition. The new partnership used an omni-media-channel strategy, including grassroots events, to reopen the conversation on how coal pollution is addressed.
The Climate Reality Project

Established in 2006 and fundedfrom Al Gore’s profits from An Inconvenient Truth documentary (Sheppard, 2009),the CRP was an international grassroots coalition educating volunteers to give public talks describing the impact of climate change and ways to mitigate it within local communities. By 2009, more than 3,000 volunteers gave 70,000 talks to 7.3 million individual stakeholdersworldwide (Simamora, 2009). A network of over 10,000 grassroots leaders of the project helps communities address climate change (Elks, 2013). By 2016, the organisation trained its local advocates, the Climate Reality Leadership Corps, via 33 events. These Leaders are located in 135 countries and their responsibilities include leading local education events and encouraging activity against climate change at the grassroots level (Bedard, 2013).

Public Sector Governance and the Law
Through governance, state and non-governmental agents cooperate to create and apply a formal set of rules and regulations under which the state operateson all levels (Goldsmith, 2007; Fukuyama, 2013). This process is manifest at several levels, namely those of international governance entities, national institutions, local governmental entities, and business and community associations.All these actors interact in a complex network of interests (Newig and Fritsch, 2009; World Bank Group, 2017). The governance of a state and its legal framework are intended to protect the interests of citizens and manage to do so with varying levels of effectiveness. The complex dynamic between regulations, the governmental machinery and its interaction with other entities is an integral part of the process leading to a need for TSL.
Governance Effectiveness Determinants
Despite the best intentions behind the process of governance, policies sometimes fail (Dasgupta et al., 2006), at which point a gap calling for TSL appears. Notably, best practices can fail whereas new and unexpected solutions enable the desired development (Young, 1994; Al-Marhubi, 2004). The core determinants of success are coordination, commitment, and cooperation between governing institutions (World Bank Group, 2017). The World Bank Group pointed out that the exact policy is less important for success than its implementation. Policies lacking applicability criteria cannot be implemented and therefore bring the desired societal change. This is a problem in countries that have large semi-legal areas (Higgins, 1995; O'Donnell, 2004). A classic example of semi-legal areas is that of countries that have not closed all loops allowing corporations to avoid taxation by using offshored operations. shell corporations etc., countries that are many indeed (Stiglitz, 1986; Schwarz, 2009). Another example is that of standing laws that have no scheme of incentives and punishments associated with their abiding and respectively breaking, such as the laws of gender discrimination where the penalty does not necessarily apply to the company who can discourage and control the behavior but may be appliedonly to certain staff (Benard and Correll, 2010).

The Role of Law
The legal framework is important for TSL in more ways than one. Law provides structure and formality to policy negotiations and, combined with TSL, law functions as a device promoting accountability and coordination between stakeholders. Ultimately, law shapes the rules under which these relationships work. Effective laws provide incentives for compliance and incentives for corporate willingness to make positive contributions to local communities, while creating a cost for non-compliance. Worldwide trends show that governments have reshaped the legal environment by imposing legal regulations on civic society organisation and the media, which reduces the autonomy of these entities (World Bank Group, 2017). At the same time, ineffective laws may misrepresent the wishes of citizens, giving rise to the TSL gap.
Case Studies:Indigenous Consultation by National Energy Board of Canada
The following case studies show how ineffective laws give rise to a need for TSL. The Supreme Court of Canada made two binding legal decisions regulating the way the National Energy Board (NEB) must consult with Indigenous communities impacted by their projects (Powell, 2017).

Case 1: Clyde River
Petroleum Geo-Services Inc.applied to the NEB for permission to start offshore seismic oil and gas testing in Nunavut. The project would have impacted the Inuit community of Clyde River, whichhad treaty rights to be consulted, but the consultation duty had not been fulfilled. However, theNEB decided that sufficient efforts for consultation with aboriginalshad been made and considered that environmental impacts were not significant,therefore granting approval for the project. Clyde River challenged their decision in court. The Federal Court of Appeal’s decision was that it was up to theNEB to decide on how to perform the consultation and they had fulfilled their duty. For this reason the case went further to the Supreme Court who allowed the appeal.
In their decision, the Supreme Court emphasised that, while the state can rely on a regulatory agency to perform its consultation duties, the Crown was still accountable for the process to be adequately respected in spirit, not only form. Moreover, the Crown has the duty to act if the consultation process is insufficient (Supreme Court of Canada, 2017, para. 22),
“given the importance of the rights at stake, the significance of the potential impact, and the risk of non-compensable damage, the duty owed in this case falls at the highest end of the spectrum.” - (Supreme Court of Canada, 2017, para. 44).
The Supreme Court also found flaws in the NEB consultation process even though their inquiry looked at environmental impact but not indigenous rights. In addition, the Crown did not clearly rely on the NEB to perform the consultation. Moreover, the consultation was insufficiently deep because it lacked oral hearings, and all questions were answered in a massive online document to which stakeholders did not have access and which was not entirely translated in Inuktitut. Another finding was that the NEB did not clearly state that deep consultation was necessary.

Case 2: Chippewas
In the Chippewas case, Enbridge Pipelines applied for permission to modify a pipeline to partially reverse flow, expand capacity, and add heavy crude petroleum transport capacity. TheNEB notified aboriginal communities,including the Chippewas, regarding the project, the process, and the role of theNEB.
There was evidence that the Chippewas participated in the hearing and finallythe NEB granted approval for the project given that communities had been allowed to share their views and the projected environmental impact was deemed minimal. After an unsuccessful appeal, the Chippewas went to the Supreme Court, who dismissed their appeal and allowed the NEB decision to stand. The reasoning behind this case was in the same veinasthat in the Clyde River case. The Court decided that theNEB was entitled to act on behalf of the Crown and that the consultation duty is not a way to address historical grievances (Supreme Court of Canada 2017, para. 41).

A PoliticalCoase Theorem
The Coase Theorem states thatin the absence of transaction costs and assuming well-defined rights of ownership, economic actors endeavour to attain efficient outcomes, regardless of who has ownership rights over given assets (Coase, 1960; Stigler, 1966).This theorem is closely linked to the process giving rise to the TSL gap, as outlined in this section, and the mechanism should be part of any executive education introductory course and well known to public servants. Extended into socio-politics, the theorem suggests a propensity to adopt laws and policies that optimise outcomes based on the needs of society, regardless of the regulator’s political orientation. Therefore, institutional differences between the individual internal organizations of various countriesshould not trigger differences in outcomes.
The political equivalent of the Coase theorem, the theory of belief differences (Acemoglu, 2003), suggests that different societies make different legal choices because of the diverging views of their leaders regardingwhich policies benefit society. Since real world contexts hold no clear right answers because the interests and desires of various individual voting citizens clash and therefore the entire electorate is difficult to please at the same time, uncertainty is partly responsible for such choices. Naturally, inthriving societies leaders make the best possible choices (Acemoglu and Robinson, 2004). An alternative view isthe theory of social conflict (Acemoglu and Robinson, 2004). This theory posits that the differences in choicesbetween societies result fromthe influence of powerful political or social groups seeking to servetheir own interests. These groups place their interest over social wellbeing and therefore are willing to support policies with disastrous consequences for society in general (Becker, 1983; Besley and Coate, 1998) Although governments issue laws meant to protect public good and rights, democratic deficit and conflicts of interest create disconnect between governments and those they serve. Moreover, lobby and interest groups contribute to widening the gap by militating for protecting their own interests (Kollman, 1998; Baumgartner and Leech, 2001) and this is where the need for TSL arises.

Empirical evidence suggests that, in fact, inefficient regulations are frequently chosen by societies over efficient ones. In many cases, these choices are not influenced by divergentbeliefs but by significant divergence of interests between politically influential figures and society in general. Therefore, the correct view is that of theories of social conflict, and these should be used in analysing policy differences (Acemoglu, 2003; Acemoglu and Robinson, 2004). Yet this may not always be the case. Even in cases where there is goodwill, the complexities of the situation may make the best path unclear. In such circumstances, public servants trained in simulation models could use these powerful tools to find a better path forward. However, the theory of social conflict has yet to identify what prevents divergent interest groups from reaching mutually beneficial outcomes. Politicians could create a positive outcome for society and divide part of the remaining gains among themselves, arrangement thatcan be characterized by saying that these groups are efficient predators, as opposed to wasteful ones (Acemoglu, 2003; Acemoglu and Robinson, 2004). Perhaps the problem is that devising an optimised framework maximizing both categories of gains is intractable, especially due to the existing legal and governmental framework on which changes must be imposed. Moreover, interest groups have no altruistic motivation. Despite some usefulness, the political Coase theorem has limited applicability due to two commitment-related problems:
(1) Rulers cannot commit to refuse using their power for their own future benefit, as long as they do not give it up.
(2) After they give it up, citizens cannot commit to granting rulersfuture rewards since the incentive disappears together with the power.
These problems place boundaries on the methodsthat eliminate inefficiencies. Yet the relationship between rulers and society is recurrent and therefore based on reputation, while punitive measures for corruption are practiced in most countries. Consequently, the applicability of the political Coase theorem is dependent upon legally regulated commitment and itsenforcement. Another factor affecting the political Coase theorem applicability is the intensity of the conflict overdistribution of gains between groups (Acemoglu, 2003).
In mathematical terms, the intensity of the conflict can be described as a game theory model. When conflicting interest groups are shaping policy their strategies amount to a zero sum game, where the sum of losses and wins is zero since opponentsare competing witheach other (Sawyer, 1987; Thurow, 2001). However, if the parties would cooperate through a negotiation-type exchange shaping policies beneficial to everyone, the sum of the game would be non-zero. There would be winnings for everyone, even if they would be marginally smaller than in the zero-sum case (Mahoney, 2007; Bénabou and Tirole, 2010). Another take on game theory is found in section 3.5, with a description of the prisoner dilemma as a way to achieve social capital. Game theory could be used as a valuable tool in modeling outcomes of conflict between society and rulers and could also be used for predicting outcomes, which is relevant for simulations of TSL dynamics in a quantitative and rigorous way.
The Link between Corporate Social Responsibility and TSL
Companies have increasingly adopted corporate social responsibility (CSR) as a form of self-regulation (Lynch‐Wood and Williamson, 2007; Thomson, Boutilier and Black, 2012).The need for corporations to self-regulate is due to public pressure dictating them to limit practices that damage the environment or go against community interests (Williams, Gill and Ponsford, 2007; Ponsford and Williams, 2010; Yates and Horvath, 2013).CSR is often implemented as a complex set of corporate rules ensuring adherence to ethical and legal standards and focusing on the spirit of the law rather than form. In some cases, corporations go beyond compliance and engage in socially positive actions (Slack, 2008; Corscadden, Wile and Yiridoe, 2012; Raufflet et al., 2013). The international CSR standard is ISO 26000 but some organizations, such as those in the public sector, may use the triple bottom line, where profit takes a role equal to that of responsible environmental and fair labour practices. A way to implement CSR is corporate philanthropy in the form of aid, gifts, and monetary donations to communities and foundations representing their interests. Another approach is to embed CSR initiatives into the operational framework of the company, e.g. in procurement (Steurer et al., 2007; Tanimoto, 2007; Walker and Brammer, 2009).
In general, the public can verify the CSR level of a corporation through reports published by the company for transparency, called social accounting (Gray, Owen and Adams, 1996). Since the enhancement of corporate reputation through display of commitment to CSR leads to an increased TSL level, it becomes apparent that the concept of TSL is closely linked to that of CSR.

Social Capital and TSL
Social capital is an umbrella term encompassing notions of trust among members of society, reciprocity, and collaborative social action with the purpose of generating mutual benefits, but also the idea of sanctions (Woolcock, 1998; Fountain, 1998). Social capital has gained relevance as the world transitions from industrial to knowledge economies (Westlund, 2003). Social interaction is the basis for a knowledge economy because it creates social networks enabling propagation of knowledge, social norms, trust, and mutual values. Consequently, social capital is the glue connecting the community network inducingdecisional cohesion in communities, a critical point in the process of acquiring TSL. In time, this dynamic shapes socio-economic outcomes for the respective societies. Social capital is described in four meaningful ways (Westlund, 2003): (1) anindividual resource; (2) a feature of social structures and community networks; (3) equivalent with inherited social norms; and (4) a societal principle for productivity and enhancing achievement.
Being built and handled through social interaction via values, traditions, customs, and beliefs, social capital is fundamentally different from other types of human capital. As such, it can be numerically measured on three dimensions (Lesser, 2009)and thus used in simulation models:
1)   The structural dimension refers to social networks in terms of connectivity, configuration, hierarchy, and other network invariants. Network organization occurs naturally within a group when a common feeling of identity unifies and motivates individuals.
2)   The cognitive dimension regards the ways in which meaning is passed among individuals through shared interpretations and representations. The cognitive dimension of the community is the place where a project acquires TSL through information exchange. When positive meaning is shared through the cognitive dimension of a community with regards to some project, the community lends that project some of its social capital.
3)   The relational dimension is a function of social norms capable of modeling trust, expectations, and identity.

The Problem of Measuring Social Capital
The exact definition and mode of measurement of social capital are stillunclear. Some definitions describe it as simply the outcome of individual interaction with the social network and connections (Coleman, 1988; Tsai and Ghoshal, 1998; Maskell, 2000; Cohen, Prusak and Prusak, 2001; Ellison, Steinfield and Lampe, 2007; Franklin, 2011), whereas others consider it a collective asset arising from homogeneous interests and values within a social network (Iannaccone, 1990; Durston, 2001; Welzel, Inglehart and Deutsch, 2005; Widmalm, 2005; Keefer and Knack, 2008). Some definitions emphasize tolerance and trust, others the degree of social interaction, and still others focus on social norms and cultural interactions (Quibria, 2003). Moreover, it is unclear if project owners are a default part of social capital or they only become one once the project acquires TSL. In general, authors agree that social capital arises from individual interactions contributing to collective action, which is the physical way to measure TSL described in the section on measurement models.
It has been argued that social capital emerges as a spontaneous consequence of iterations of the prisoners’ dilemma (Sobel, 2002; Quibria, 2003), therefore creating a basis for modeling it as a game theory problem. The argument is based on repeated uses in the literature of recursive game theory to derive meaning and find the cause of cultural and informally institutionalised behaviour. Thus, single instance prisoner dilemma games fail to achieve cooperative outcomes because the Nash equilibrium of both players dictates that defecting is the best strategy for each player. In that instance, the defector wins while the other player loses. However, iterated games lead to the development of a superior strategy through collaboration between prisoners (Quibria, 2003). When they collaborate, both prisoners win freedom. As pointed out in the political Coase theorem section, game theory ais useful in understanding and simulating outcomes of social dynamics. A short introduction to game theory would help public servants better understand the functioning of simulation models and perhaps create new similar tools.

Simulation Models: Case Studies
The simulation models presented in this section provide a practical background demonstrating the power of these tools and their potential as a part of the executive education curriculum. TSL should be part of any cost-benefit feasibility study for several reasons:
1.   The community can oppose quite vehemently, in a physical manner, sometimes even sabotage the site or machinery. This generates financial losses which are normally not taken into consideration.
2.   The community can be impacted in ways that generate costs, e.g. projects that generate health problems which then generate healthcare bills or loss of economic productivity when employees in the community are sick. Therefore, companies should strive to propose ethical projects and ensure transparency such that the community can take appropriate measures to mitigate risks.
3.   The ethical problems of not placing TSL at the heart of a benefit analysis create intangible costs.
4.   Ultimately, the land belongs to the citizens of a country and therefore TSL must be central to cost calculations in all democratic countries, remembering that non-democratic countries can become democratic ones.

Case 1: Agent-Based Simulations in Mining Operations
Agent-based modeling (ABM)can simulate community reactions to future projects bydescribingthe variation of community acceptance and other TSL parameters as a function of the environmental impact of the project(Boateng and Awuah-Offei, 2017).Given that it has been empirically validated for sensitivity and specificity (Boateng and Awuah-Offei, 2017), project owners can develop forecasts and strategies for their interactions with local communities based on it.
ABM has been shown to respond to network characteristics such as close neighbor ratio, number of early adopters, and the average degree of individuals. However, the model has a biastowards number of early adopters and close neighbor ratio over average degree, thus small errors in these numbers can throw the estimations off significantly. This drawback is mitigated through precise empirical measurements of these variables. While the number of early adopters can sometimes be inferred from literature, the close neighbor ratio requires surveys, which may have large standard deviation error bars depending on the data collection methods(Pentz and Shott, 1988; Kirkup, 1996; Bevington et al., 1993).
A key factor inthe variation of community opinionregarding a project is the diffusion of information over time through the socialnetwork formed by the individuals in that community. Diffusion models are based on thermodynamics principles and describe through differential equations the gradual adoption of change through a network from one point to the next (Norton and Bass, 1987; Boswijk and Franses, 2005). Agent-based models have been used to describe changes in perception as a consequence of word-of-mouth (Meade and Islam, 2006), adoption of innovations and new technology (Norton and Bass, 1987) etc. Despite ensuring good empirical fit without decision variables (Bass, Krishnan and Jain, 1994) these models require several parameters such as the initial conditions of the community, the parameters of the network, and those of the diffusion model. In practice, it is difficult and expensive to obtain these parameters because these models require primary data which may need to be collected in the field through face to face surveys (Boswijk and Franses, 2005; Boateng and Awuah-Offei, 2017). Moreover, the quality of the data introduces uncontrolled uncertainty into the model, especially when the model is not based on estimationsinstead ofempirical findings. To understand ABM’spotential pitfalls, users must run a sensitivity analysis to verify its responsiveness to input parameters. An applied example of a sensitivity analysis on such a model is in Boateng and Awuah-Offei(2017)and includes a local, global, and factorial network sensitivity analysis. The authors note that the global analyses are best suited to the purpose due to their reliance on the rigor of statistical theory.
At any given time, the ABM shows the dependence of the acceptance level of demographic and non-demographic features, such as project perception within the community. The boundary conditions of the model were (Boateng and Awuah-Offei, 2017):
-   The influence of external agents on the community is negligible.
-   The effect of unobserved variables outside the utility function is negligible.
-   Diffusion of information through the network is mainly based on verbal communication.
-   The agents within the community all influence each other.
-   At least one non-demographic characteristic of each agent is dynamic with respect to time.
-   At time zero, all agents have the same perception of the status quo.
-   Agents can be either in favor or against a project and their preference can change over time.
After establishing boundary conditions, the model iterates the function describing the interaction of agents within the community. At each iteration, the preference of each decision-making agent is estimated through an odds ratio function therefore enabling the preference to change. After every step, the preferences of all agents are tabulated to keep track of the level of community acceptance.
In ABM, the required user input is composed of the distributions of agents in terms of demographic and non-demographic characteristics. Before the first run, the system automatically assigns a set of demographic characteristics to each agent via a Monte Carlo stochasticprocess. However, the non-demographic feature assignments are determined by the specific mining project for which the simulation takes place. The dynamics of the system are influenced by time (e.g. age of agents), events, and interaction between agents. The interaction between agents facilitates information transfer between neighbors. One of the most important characteristics of the model is the network homophily, defined asthe probability that similar agents interact with each other and measured by the close neighbor ratio.
The last of the boundary conditions of the model is a problem when modeling communities containing members of the Deep Ecology Movement as they are unlikely to change their mind (Naess, 1973; Naess, 1985; Devall and Sessions, 1985) in the same way as the larger community and none of them will be in favor in the beginning of the simulation, therefore requiring special treatment in the model. Ideally, the next generation of students of public administration will be equipped with the skills necessary to develop new simulation models for this purpose.

Case 2: Graduate Learning Simulation of Environmental Policy Impact
Ku et al. (2006) have used a U.S. Gulf Coast disaster preparedness case uploaded in a simulation-based learning experiment to teach an MPA student classroom about environmental complexity. The case incorporated two types of stakeholders, some in favour of economic development and others more concerned with environmental problems, who sought to preserve the natural characteristics of the coast. For teachingpurposes, Ku et al. (2006) developed the Pointe Claire Coastal Protection Planning Exercise, a learning simulation on protection of coastal areas against future natural disasters. While students can access any of the parameters of the model, the main menu of the simulation offers a shortcut to six outcomes of the model calculated in USD: (1) aggregate cost of the project; (2) damages made by storm; (3) aggregate damages; (4) costs and damages; (5) avoided damages and benefits; (6) target tax rate and tax revenues. Students can run the simulation several times in order to compare the outcomes of each set of policies. Notably, the simulation is not limited to regional environmental efforts but also accepts as input policies meant to trigger socio-economic changes.

Case 3: GraduateCompetitive Simulation in Healthcare Policy Impact
ReThink Health, the simulation platform supporting the Student Simulation Competition, resulted from the collaboration of Network of Schools of Public Policy, Affairs, and Administration (NASPAA) and Rippel Foundation in Boston, Massachusetts (Goodman et al., 2015; ReThink Health, 2015). This competition attracted 181 graduate students from 93 educational institutions (McFarland et al., 2016) and the results were graded via the Super Score function, which enabled participants to view stakeholder concerns and the simulation’sprogress. Quantitative performance of the solutions implemented by each team was part of the score, with focus on inequity, healthcare quality, death rate, cost, and employee productivity. Ultimately, students also engaged in role playing as healthcare officials.
The ReThink Health simulator was a model using system dynamics to operate over a large database with the purpose to improve the health system by rallying local stakeholders around improved policies. The model represents the distribution of a regional population in terms of demographics and insurance coverage and includes the health risks and status of each group, along with other indicators such as costs. Based on this data, the simulation forecasts how various policies will impact key population metrics, such as costs and health status. Students are able to model outcomes based on: (a) reducing costs through initiatives such as care coordination, (b) streamlining healthcare delivery; (c) reducing health risks such as those arising from behavioural sources.

Anytown
The Anytown version models the evolution of a hypothetical community with 280,000 members in 2000 and growing to 400,000 by 2040(McFarland et al., 2016). This version is based on average US health statistics for the main parameters of the model and the interface has a range of options for developing large scale healthcare changes along with the tools to understand how these changes operate.
Potential Executive Education Curriculum
The concept of TSL provides an opportunity to address a number of interrelated concepts. TSL is a relatively new concept and not widely understood. This presents a pedagogical opportunity to address the well understood concepts of network analysis, social capital, regulation, etc. from an alternative perspective.In this section we present a four-day schedule for an Executive Education Program. Although this program is generic and can be implemented in any context, it is advisable to structure the program based upon the learning requirements of the participants, such as public or private sector, developed or underdeveloped country, level of education and work experience, etc. We have included an action learning component in the program. Action learning has proven to be an effective pedagogical tool to facilitate the learning process and provide an opportunity for subsequent implementation. Conclusion
The emerging concept of social licence offers an opportunity for public administration degree programs and providers of executive programs to introduce and review core public management concepts. The pedagogy of TSL can also provide an innovative approach to integrate the core public management concepts. TSL provides a framework for research, case studies, benefit-cost analysis, program evaluation, and the utilization of simulations.Simulations are powerful tools that governments, public servants, and companies could use to predict and analyze community behavior, and obtainand maintain the approval of communities where projects with significant environmental impact take place. In addition, we emphasizedthey have a potential role in education as applied, empirical tools facilitating learning.

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Democratic Deficit

Earning the Social Licence

Models and Measures ofTSL

The Pyramid Model

The Arrowhead Model

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