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Corruption, Underdevelopment, and Extractive Resource Industries: Addressing the Vicious Cycle

Published online by Cambridge University Press:  23 January 2015

Eleanor R. E. O’Higgins
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Abstract

The systemic role of corruption and its link to low human development is explored. The extractive resource industry is presented as an arena where conditions for corruption—monopoly and discretion without accountability—are especially intense. Corruption is maintained by a self-reinforcing cycle. Multiple stakeholders are involved in the maintenance of and/or opposition to the cycle: investing corporations, host country regimes and officials, inter-governmental bodies like the OECD, industry associations, non-governmental organization (NGO) watchdogs like Transparency International, and international agencies facilitating global investment like the World Bank. Complementarity of interests between the demand and supply sides provides strong incentives for entrenched players to maintain corruptive relationships, to protect past gains and sustain current ones. Compulsory international regulation, maximum transparency, effective detection, and enforcement are recommended to enhance accountability, thereby reversing the cycle. It is also necessary to create a corporate culture built on integrity, if regulation itself is to succeed.

Type
Special Forum
Information
Business Ethics Quarterly , Volume 16 , Issue 2 , April 2006 , pp. 235 - 254
Copyright
Copyright © Society for Business Ethics 2006

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