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Article

20 Jun 2009

Author:
Susan A. Aaronson, Associate Research Professor, George Washington Univ. - World Bank Business & Development Discussion Paper

[PDF] Corporate strategy and inadequate governance: The pitfalls of CSR

...[There] are risks that CSR can undermine good governance in less developed countries where business takes on roles beyond their core competencies... I focus in particular on corporate efforts to provide much needed services including roads, schools, healthcare and other public and quasi-public goods... If private firms provide public goods citizens may learn to expect these goods from private firms rather than from government. Moreover, if citizens don’t communicate to policymakers what they need, policymakers don’t learn how to respond to such feedback. Citizens don’t learn how to influence government or the importance of such learning for effective governance... [In contrast,] managers today can provide technologies, assets and skills to improve governance in the developing world... The Extractive Industry Transparency Initiative (EITI) is an interesting example of such a partnership... [refers to Anglo American]