Globalization, Corporate Social Responsibility and poverty



    1. Professor of Economics in the School of Development Studies, University of East Anglia. He has written extensively on the effects of trans-national corporations in developing countries, especially in Latin America. His recent work has focused on the impact of globalization on workers, the environment and on poverty. He is the co-editor (with Ruth Pearson and Jill Seyfang) of Corporate responsibility and labour rights: codes of conduct in the global economy (2002).
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      Earlier versions of this article were presented at two workshops, at the Copenhagen Business School in August 2004 and at Chatham House in January 2005. I am grateful to participants at the workshops for their comments.


Corporate Social Responsibility (CSR) has become a major focus of interest for development practitioners in recent years. While development NGOs have been critical of voluntary corporate initiatives, official development agencies have taken a more positive view and in some cases encouraged CSR. This article locates the growth of CSR in the context of global deregulation since the early 1980s, highlighting the key drivers that have led to its adoption by many leading transnational corporations. It then describes the factors that have led to the recent emphasis given to CSR by both bilateral and multilateral development agencies and the United Nations. A framework for analysing the links between foreign direct investment and poverty is developed focusing on the impacts on the poor as producers, consumers and beneficiaries of government expenditures. This framework is used to illustrate the limitations of CSR in terms of likely impacts on poverty reduction through each of the channels identified and also to point to areas in which CSR may have some positive benefits. Overall, the article concludes that it is unlikely to play the significant role in poverty reduction in development countries that its proponents claim for it.