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[Combating poverty and inequality] Business,power and poverty reduction
Utting, Peter Buchholz, Rebecca Varghese Marques, José Carlos
Utting, Peter
Buchholz, Rebecca Varghese
Marques, José Carlos
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Abstract
"As the role of the state in key aspects of social policy and labour market regulation has declined, that of business has increased. Pro-market ideology and strategies in recent decades have generated fundamental changes in relations among state, society and business actors. Economic, regulatory and governance trends that have characterized globalization and liberalization have not only expanded commercial opportunities for business enterprises; they have also drawn them more directly into the arenas of social policy and poverty reduction. This is particularly apparent in four areas: the role of business in the privatization of social services, discussed in chapter 6; the adoption of corporate social responsibility (CSR) principles and practices; new roles for business organizations in standard setting and other aspects of business regulation; and the participation of transnational corporations (TNCs) and business associations in processes of global governance and public policy. These changes contrast with the traditional role of business in social development. In countries where poverty was reduced in relatively short periods of time, this role could vary signifi cantly but often featured employment generation, tax payments, philanthropy, corporate social welfare and insurance obligations, and implicit support for social policy or a welfare state model. Today’s world is quite different. The number of TNCs has vastly increased, as has their economic power through foreign direct investment (FDI) and global value chains. Moreover, corporate tax rates have declined sharply over the past two decades, the percentage of workers covered by company health plans has decreased in many countries, and social pacts that aligned business interests with a welfare state model have weakened. At the same time, international initiatives to control company behaviour through harder regulations have ceded ground to efforts to engage the private sector far more directly and proactively in national and international strategies to raise social and environmental standards and reduce poverty. More and more companies are associating themselves with the Millennium Development Goals (MDGs), participating in public-private partnerships concerned with the provision of basic services, adopting voluntary initiatives associated with an expanding CSR agenda, and targeting the world’s poor in their investment, production and marketing strategies. However, whether or not such approaches enhance corporate accountability and promote inclusive development remains an open question."(pg 233)
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Book chapter
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2010
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9789290850762
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With permission of the license/copyright holder