Extracting Accountability: The Implications of the Resource Curse for CSR Theory and Practice

Abstract

While corporate social responsibility (CSR) is important to economic development and baseline human rights in countries dependent on extractive industry revenues, failures in governance-such as the absence of basic services like health care and electricity- require new strategies and incentives to encourage governments to play their traditional role more effectively. Political economic theories of the "resource curse" see the breakdown of a sense of government accountability to its people as one of the more destructive aspects of excessive reliance on natural resource rents. The authors look to recent innovations such as transparency projects that can reinvigorate a sense of government accountability, among other positive outcomes. The authors argue that both mandatory and voluntary models of CSR could have an adverse impact on sustainable development so long as they focus exclusively on the role of the corporation rather than the on ways corporate investment might be used to create incentives for a more effective state role.