Who’s to Blame for the Money Drain? Corporate Power and Corruption as Competing Narratives for Lost Resources

Abstract

This chapter focuses on corporate power and corruption, providing context for current debates around responsibility for and the consequences of tax abuse. In addition to the already discussed problems of tax avoidance and tax evasion, the bargaining power of large corporations over smaller states is also an outcome of structural problems that discourage developing countries from collecting taxes needed for human development. Here, a key problem is international tax competition, or more accurately tax wars between nations. This international pressure pushes decision makers in developing countries to turn a blind eye to corporate wrongdoings and to offer tax breaks and other sweeteners to large enterprises in exchange for investments. Ultimately, what is needed are more comprehensive frameworks for analyzing the reasons behind the obstacles to domestic resource mobilization, which pay close attention to both public and private factors that prevent the fulfillment of social rights and development goals.

The Politics of Explanatory Nationalism and the Evolution of the United Nations Agenda on Multinational Enterprises

“…In this respect an important development was the way in which the emergence of the corporate responsibility agenda coincided with the emergence of a coordinated, international policy push against corruption [Ylönen, 2019]. Corruption was added as the 10th pillar of the first version of the Global Compact in 2004.…”