A Corporate Solution to Global Poverty: How Multinationals Can Help the Poor and Invigorate Their Own Legitimacy / Edition 1

by George Lodge, Craig Wilson

Overview

World leaders have given the reduction of global poverty top priority. And yet it persists. Indeed, in many countries whose governments lack either the desire or the ability to act, poverty has worsened. This book, a joint venture of a Harvard professor and an economist with the International Finance Corporation, argues that the solution lies in the creation of a new institution, the World Development Corporation (WDC), a partnership of multinational corporations (MNCs), international development agencies, and nongovernmental organizations (NGOs).


In A Corporate Solution to Global Poverty, George Lodge and Craig Wilson assert that MNCs have the critical combination of capabilities required to build investment, grow economies, and create jobs in poor countries, and thus to reduce poverty. Furthermore, they can do so profitably and thus sustainably. But they lack legitimacy and risk can be high, and so a collective approach is better than one in which an individual company proceeds alone. Thus a UN-sponsored WDC, owned and managed by a dozen or so MNCs with NGO support, will make a marked difference.


At a time when big business has been demonized for destroying the environment, enjoying one-sided benefits from globalization, and deceiving investors, the book argues, MNCs have much to gain from becoming more effective in reducing global poverty. This is not a call for philanthropy. Lodge and Wilson believe that corporate support for the World Development Corporation will benefit not only the world's poor but also company shareholders as a result of improved MNC legitimacy and stronger markets and profitability.

Product Details

ISBN-13:	9780691122298
Publisher:	Princeton University Press
Publication date:	04/02/2006
Edition description:	New Edition
Pages:	208
Product dimensions:	6.00(w) x 9.25(h) x (d)

About the Author

George Lodge is Jaime and Josefina Chua Tiampo Professor of Business Administration Emeritus at Harvard Business School. In 1958, President Dwight D. Eisenhower named him Assistant Secretary of Labor for International Affairs, a position to which President John F. Kennedy reappointed him several years later. His books include Managing Globalization in the Age of Interdependence, The New American Ideology, and The American Disease. After spending nine years in the Australian foreign service, Craig Wilson worked for five years as a consultant economist with the World Bank and other NGOs. In 2005 he joined the International Finance Corporation and is currently based in Bangladesh, where he is managing a program aimed at improving the investment environment in South Asia.

Table of Contents

Acknowledgments ix

List of Abbreviations xi

Prologue 1





PART I: The Legitimacy Gap




Chapter 1: Introduction 9

Chapter 2: The Legitimacy of Business 21

PART II: Reactions, Responses, and Responsibilities




Chapter 3: NGOs and the Attack: Critics, Watchdogs, and Collaborators 45

Chapter 4: The Corporate Response 71

Chapter 5: International Development Architecture 90

Chapter 6: The Emerging International Consensus 117





PART III: Global Poverty Reduction and the Role of Big Business




Chapter 7: The Options for Business Contributions 137

Chapter 8: A World Development Corporation 155





Notes 165

Bibliography 177

Index 185

What People are Saying About This

Arthur Schlesinger

A Corporate Solution to Global Poverty is a fresh and original approach to the economics and ethics of globalization. Invoking the crisis in corporate legitimacy, the authors of this stimulating book argue persuasively that the reduction of world poverty would restore legitimacy to multinational corporate life. Along the way, readers will absorb much interesting nformation about the global state of play and the presentation of a prospective solution.
— Arthur Schlesinger, Jr., Pulitzer Prize-winning historian

Bell

Extreme poverty threatens the very underpinnings of our ever-shrinking world. George Lodge and Craig Wilson argue that corporations must lead the fight against global poverty. Their idea of a World Development Corporation will provoke heated discussion-and, I hope, constructive action-in corporate boardrooms and the broader international development community.
— Peter D. Bell, President and CEO, CARE

Stephen Kobrin

A very well written book on an important subject. It will reach a broad audience.
— Stephen Kobrin, University of Pennsylvania

From the Publisher

"Extreme poverty threatens the very underpinnings of our ever-shrinking world. George Lodge and Craig Wilson argue that corporations must lead the fight against global poverty. Their idea of a World Development Corporation will provoke heated discussion-and, I hope, constructive action-in corporate boardrooms and the broader international development community."—Peter D. Bell, President and CEO, CARE

"A Corporate Solution to Global Poverty is a fresh and original approach to the economics and ethics of globalization. Invoking the crisis in corporate legitimacy, the authors of this stimulating book argue persuasively that the reduction of world poverty would restore legitimacy to multinational corporate life. Along the way, readers will absorb much interesting nformation about the global state of play and the presentation of a prospective solution."—Arthur Schlesinger, Jr., Pulitzer Prize-winning historian

"In an attempt to reduce global poverty, some focus on rock concerts, others on macroeconomic theory, others build ever larger bureaucracies. Lodge and Wilson do not hesitate to dissect, deconstruct, and devour ideologies, policies, and institutions that have promised a lot and delivered very little. They provide an alternative answer, one that is clear, hard-headed, obvious, and mostly ignored; business is and will remain the driving part of the equation. If you are interested in results, this is an entertaining and smart book. If you are a theoretician you are likely to become increasingly unhappy as you confront a great deal of common sense delivered with passion and humor."—Juan Enriguez, President of Synthetic Genomics and author of As The Future Catches You

"George Lodge and Craig Wilson offer a fascinating review of the fast changing role of big business and its relations with the international community and civil society. The authors comprehensively outline the increasingly complex relationships that multinationals must manage in the face of increased demands to do more than just make profit."—Frannie Léautier, Vice President, World Bank Institute

"A very well written book on an important subject. It will reach a broad audience."—Stephen Kobrin, University of Pennsylvania

Juan Enriguez

In an attempt to reduce global poverty, some focus on rock concerts, others on macroeconomic theory, others build ever larger bureaucracies. Lodge and Wilson do not hesitate to dissect, deconstruct, and devour ideologies, policies, and institutions that have promised a lot and delivered very little. They provide an alternative answer, one that is clear, hard-headed, obvious, and mostly ignored; business is and will remain the driving part of the equation. If you are interested in results, this is an entertaining and smart book. If you are a theoretician you are likely to become increasingly unhappy as you confront a great deal of common sense delivered with passion and humor.
— Juan Enriguez, President of Synthetic Genomics and author of "As The Future Catches You"

Frannie Leautier

George Lodge and Craig Wilson offer a fascinating review of the fast changing role of big business and its relations with the international community and civil society. The authors comprehensively outline the increasingly complex relationships that multinationals must manage in the face of increased demands to do more than just make profit.
— Frannie Leautier, Vice President, World Bank Institute

Editorial Reviews

A Corporate Solution to Global Poverty provides a valuable—and exceedingly readable—primer on corporate social responsibility as well as a compelling approach to the use of corporate wealth to benefit the world's poorest.

International Law and Politics - Joshua Rosenthal

A Corporate Solution to Global Poverty provides a valuable—and exceedingly readable—primer on corporate social responsibility as well as a compelling approach to the use of corporate wealth to benefit the world's poorest.
— Joshua Rosenthal

International Law and Politics

The late Milton Friedman once wrote that the corporation's soleresponsibility is to maximize profits for its shareholders. The authors of this extended essay take sharp exception. On the contrary, they argue, firms that neglect public sentiment lose legitimacy and invite hostility and blame for all the alleged evils of globalization. Among a range of social objectives that firms should recognize, the authors focus on global poverty. Reducing poverty is an important international aim, but multinational corporations (MNCs), which in fact provide many new jobs in developing countries, typically do not include the reduction of poverty in their cost-benefit analyses for new overseas investments, nor does any international mechanism exist for evaluating and monitoring claims of poverty reduction or for giving credit where it is due. The authors make some dubious assertions in arguing that the social impact of MNCs is overwhelmingly positive, and they underestimate the practical difficulties of convincingly measuring the total social impact of any new activity. But they make a persuasive case that MNCs should broaden the range of issues they take into account in making decisions on their increasingly conspicuous activities, if for no other reason than to restore and maintain their legitimacy in the eyes of the public. The authors also advocate the formation of a new global institution, made up of governments, corporations, and nonprofit advocacy groups, to facilitate this broadening of objectives -- and to award kudos when it is merited.

Foreign Affairs

"A Corporate Solution to Global Poverty provides a valuable—and exceedingly readable—primer on corporate social responsibility as well as a compelling approach to the use of corporate wealth to benefit the world's poorest."—-Joshua Rosenthal, International Law and Politics

From the Publisher