Abstract:The Extractive Industries Transparency Initiative (EITI) sets the standard in revenue transparency in 46 countries and works under the assumption that compliance with the initiative will improve transparency and curb corruption in member states. However, individual case studies raise doubts about the success of the initiative. Building upon the literatures on compliance and governance, this paper analyzes the impact of EITI membership on transparency and corruption levels between 2006 and 2013. By using interrupted time series and panel data analyses, this research makes an original contribution to show that affiliation with the EITI immediately improved overall aggregate data disclosure in member countries in this period. At the same time, the paper also shows that perceptions of corruption did not change. This outcome questions the effectiveness of promoting only a narrow definition of transparency in extractive industries as a measure to prevent corruption. The results imply that a more comprehensive treatment of transparency might be necessary; specifically to distinguish regimes that use transparency reforms for public relations purposes as opposed to genuine reformers.

The Extractive Industries Transparency Initiative (EITI) is a public-private partnership that aims to set a global standard in resource management. The EITI has a unique format that requires an active civil society to be part of the resource management process. At the moment, 51 resource-rich countries implement the initiative, including many non-democracies. Building up on the literatures on the resource curse, democratization, norm diffusion and compliance, this paper addresses a critical question: Can the EITI be truly successful in incorporating civil society groups into the decision making process in non-democratic countries? Based on case studies of Azerbaijan and Kazakhstan, it argues that while on paper civil society groups are part of the national multistakeholder process, in practice independent NGOs are finding it more and more difficult to exercise their monitoring and whistleblowing capacities due to political, technical, financial and bureaucratic constraints. In addition, the statistical analysis shows that EITI membership is not correlated with better civil and associational rights in authoritarian countries. These results confirm that despite the initial euphoria regarding civil society participation in the EITI, NGOs remain the weakest link in majority of EITI-implementing states.

In the last decade, the Extractive Industries Transparency Initiative (EITI) has grown in both popularity and influence. The ascendance of EITI is surprising because traditionally, leaders of resource-rich states prefer to tightly control their extractive industries. This paper investigates the underlying causes of EITI membership in order to understand its acceptance, even among some of the most authoritarian regimes. The paper argues that leaders of resource-rich countries use the EITI to consolidate their international prestige as eager reformers, which serves to both maintain and lure foreign investment. The cross-national and interrupted time series analyses reveal that EITI members not only have higher FDI levels compared to non-members, but these investments increase once countries join the initiative.

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