CSR as Deinstitutionalization of Corruption in Developing Economies: a case study of Nigeria

1. CSR as Deinstitutionalization of Corruption in Developing Economies: a case study of Nigeria Kenneth Amaeshi – Warwick Business School, UK Bongo Adi --- Tsukuba University, Japan Beyond CSR? Business, Poverty and Social Justice Conference 22 May 2006, National Liberal Club, London

2. Overture • The CSR construct implies addressing some social concerns • “… actions that appear to further some social good, beyond the interests of the firm and that which is required by law” (McWilliams and Siegel, 2001:117) • Social concerns are situated • Therefore, CSR ‘ought to be’ contextualized (Fig, 2005; Chapple and Moon, 2005)

3. “The Market for Corruption”: Business-State Elite Connivance? • A multidimensional construct • Bureaucratic corruption – “the misuse of public office for private ends or private gain” (Nye, 1967; Gray and Kaufmann, 1998) • Demand and Supply sides (Heimann and Boswell, 1998) • Associated with weak institutions and control mechanisms

4. Corruption – a quick overview • Adverse Consequences • Leads to loss of government revenue (Fjeldstad and Tungodden, 2003) • Undermines good governance and adds extra costs to businesses (Caiden et al., 2001) • Distorts standards of merit and erodes the respect of law (Hamir, 1999) • Results in higher public investment and lower quality of infrastructure (Schloss, 1998)

5. CSR in Nigeria = Anti-corruption?

6. Nigeria: Socio-economic Overview • Corruption is a deadly socio-economic ‘disease’, which has continued to threaten and diminish quality of life in developing economies • Nigeria 6th most corrupt country (TI, 2005)

7. CSR in Nigeria = Philanthropy?

8. CSR in Nigeria = Philanthropy?

9. Nigeria: Oil tax audit reveals huge gap A News item from the Business Respect newsletter No. 93, dated 12 Apr 2006 An audit of payments made by oil companies in Nigeria has uncovered huge discrepancies between the amount that the firms say they paid and what the government says it actually received. The different figures are $250m apart, and have been uncovered by the Nigerian Extractive Industries Transparency Initiative.The audit noted that standards of accounting were poor overall, and that huge gaps exist - the report declined to speculate as to where the money has gone.The companies involved include Shell, ExxonMobil and Chevron. Shell in particular has suffered violent attacks and kidnappings against its installations who believe that oil wealth being generated in the region is not sufficiently benefitting local communities.

10. Tentative Research Questions • Should firms contribute to anti-corruption initiatives? • Can firms contribute to anti-corruption initiatives? • If yes, how? • If no, why not? • What conditions enable firms to contribute to anti-corruption initiatives?

11. Possible Propositions • There will be no incentives for firms to cooperate in the fight against corruption if their competitive advantage is threatened by anti-corruption initiatives • Firms will fight corruption when they don’t benefit from it

12. NESG: Possible Case Study