On the development effectiveness of the Responsible Business Initiative

On November 29, a vote will be held on the federal popular initiative 'For responsible companies – to protect people and the environment (in short: Responsible Business Initiative)...

As professors of development economics at different Swiss universities, we regularly deal with the importance of business for development in the poor countries of the world. Since the development effectiveness of the initiative is increasingly becoming the focus of discussion, we would like to contribute our expertise to this discourse. The following consensus exists among us:

• The private sector is a key driver of development and poverty reduction – but only if it guarantees basic human rights [...] and does not entail gross violations of the natural environment...
• Without clear rules on liability, occasionally some firms will cause great damage to development through their activities, especially if their position of power in the developing country is strong and the government is weak.
• The Responsible Business Initiative is beneficial for the many Swiss companies that already respect international human rights and environmental standards...
• The Responsible Business Initiative contributes to the effectiveness and sustainability of Swiss development cooperation...
• [R]elocation costs are usually high. Hence, Swiss corporations are unlikely to withdraw from developing countries if they are encouraged to implement measures such as requested by the Responsible Business Initiative...

We are therefore convinced that the Responsible Business Initiative is a suitable instrument for ensuring that the activities of Swiss companies in developing countries promote, rather than impede development. It also supports the effectiveness of Swiss development cooperation. And it makes "Swissness" a label for responsible entrepreneurship.