Issue Paper:
Firm Action for Freedom
Which role can foreign multinational corporations play in securing political
freedoms for civil societies in developing nations?
Sandra Janssen (285692)
Ellen Oberink (308264)
Joost Notenboom (179321)
Supervisor: Prof. dr. Lucas Meijs
Date: 25 September 2008
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Table of contents
Table of contents ........................................................................................................................ 2
Introduction ................................................................................................................................ 3
Freedom ...................................................................................................................................... 4
Political Freedom ................................................................................................................... 4
Economic Freedom ................................................................................................................ 7
Political Freedom as it relates to Economic Freedom ............................................................ 8
Economic Freedom and Economic Growth ........................................................................... 9
Economic Growth and Social Development ........................................................................ 11
The Issue of Freedom in the Developing World ...................................................................... 13
Developed countries ............................................................................................................. 14
Developing countries ............................................................................................................ 14
Least developed countries .................................................................................................... 15
Multinational corporations and civil societies.......................................................................... 17
Consequences of a lack of Freedom ..................................................................................... 17
Consequences for the country which is lacking freedom ................................................. 18
Consequences for foreign businesses considering investments ....................................... 20
The issue life cycle ............................................................................................................... 21
Issue life cycle stages ....................................................................................................... 21
Post maturity stage ........................................................................................................... 21
Unsustainable development...................................................................................................... 23
Nike and Child Labour ......................................................................................................... 24
Shell in Nigeria..................................................................................................................... 24
Unilever and Indonesian palm oil ........................................................................................ 25
Sustainable development .......................................................................................................... 27
De Beers and Botswana........................................................................................................ 28
Concluding remarks ................................................................................................................. 30
Future areas of research ............................................................................................................ 31
Notes......................................................................................................................................... 32
Bibliography ............................................................................................................................. 34
Articles ..................................................................................................................................... 36
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Introduction
Freedom; a broad concept of great importance. It is said that every man is born free. But is
this really true in today’s world of nation states? Are we still free, from birth, in both its
positive and its negative meaning (Berlin 1958); freedom from and freedom to. Surely, the
arrangement of the world’s societies in hierarchies and governing systems has as an
immediate consequence that certain rules and regulations have to apply in order to make
everything work. This, by definition, limits freedom in its most basic philisophical sense.
This issue paper deals with freedom and has as its main premise that freedom, both in its
positive meaning (i.e. political freedom) as in its negative meaning (i.e. economic freedom),
acts as a catalyst for development (both economically and socially). It is further stated that the
reverse relation is also valid, and that the building up of social capital and civil society plays a
big part in social and economic development and the securing of both forms of freedom.
In the first part of this issue paper the appropriate definitions of political and economic
freedom will be argued. Additionally, an outline of the reciprocal relations between political
and economic freedom, economic growth, and social capital (i.e. civil society) will be
provided.
The second part will provide a distinction between the developed, developing, and leastdeveloped world and the ideas on freedom that are prevalent in these regions. Next, a link will
be made between the developing world (the focus of this issue paper) and freedom, while in
the fourth part, market institutions (i.e. foreign multinational corporations (MNCs) will be
introduced and the main research question will be posed (i.e. which role can foreign MNCs
play in securing political freedoms for civil societies in developing nations).
In an attempt to then further develop this question, two perspectives will be introduced; the
negative role (i.e. the firm as part of the problem), and the positive role (i.e. the firm as part of
the solution). The paper will then conclude with its general findings.
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Freedom
Political Freedom
A lot of definitions of the concept of political freedom exist. Gwartney et al. (1996), for
instance, proposed that political liberty (i.e. freedom) is present when citizens are free to
participate in the political process, elections are fair and competitive, and alternative parties
are allowed to participate freely. An explicit distinction is made here between political and
civil liberties, defining the latter as; freedom of the press, right to assembly, freedom of
religion, right on a fair trail, and freedom from oppression.
Discussions usually boil down to which and how many sub-concepts (or ‘freedoms’) would
have to be included in the concept of political freedom. Is freedom from starvation a part of
political freedom, or not? Is freedom from treatable disease? Or is political freedom nothing
more than freedom from coercion (Friedman 1962)?
From a scientific point of view, it is useful to be able to objectively quantify a concept such as
political freedom. One such effort, which we will use in this issue paper since it was created
primarily for developing nations, has been put forward by the Mo Ibrahim Foundation
through its the Ibrahim Index of African Governance1. In this index, political freedom, as one
of five concepts of good governance, includes three, equally weighted, subcategories:
1. Participation; which is the ability to contest elections freely and consists of 4 sub-subcategories or datasets.
2. Respect for civil and political rights; which are all of the essential liberties and rights
and consists of four sub-sub-categories or datasets.
3. Absence of gender discrimination; which consists of three sub-sub-categories or
datasets.
The eleven sub-sub-categories or datasets that together define the concept of political freedom
are:
1. Competitive executive legislation
2. Participation of main opposition candidates in executive elections
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3. Competitive legislative elections
4. Participation of main opposition candidates in legislative elections
5. Respect for physical rights (absence of extrajudicial killing, disappearances, torture,
and political imprisonment).
6. Respect for civil rights (freedom of movement, political participation, worker’s rights,
freedom of speech, and freedom of religion)
7. Press freedom at the most basic level
8. Press freedom index
9. Women’s economic rights
10. Women’s political rights
11. Women’s social rights
Datasets one through four are based on reports from the Economist Intelligence Unit and deal
with whether official international observer missions have judged national elections to be
“free and fair”. Datasets five, six, nine, ten, and eleven are based on the Cingranelli-Richards
(CIRI) Human Rights Dataset, which in turn uses information from the U.S. State Department
Country Reports on Human Rights Practices and Amnesty International’s Annual Report.
Dataset seven is based on the number of journalists killed as compiled by the Committee to
Protect Journalists. Dataset eight comes from Reporters without Borders and the Statistics
Institute of the University of Paris2.
The Ibrahim Index broadens the definition of political freedom as used in most other existing
indices. The Freedom In The World index as published by Freedom House, for instance,
focuses on political rights and civil liberties derived from the Universal Declaration of Human
Rights. A seperate Freedom of the Press index is published annually by the same NGO.
Freedom House is not without its critics though who, next to having methodological
disagreements, claim that it promotes U.S. policy since it receives most of its funding from
the U.S. government (along with the Government of the Netherlands, Human Rights and
Peacebuilding Department3) and has U.S. government officials on its board (Chomsky, 1988).
The Worldwide Press Freedom index as published by Reporters Without Borders, on the other
hand, focuses only on that one particular freedom. The Ibrahim Index, which is not dependent
on any form of government funding, combines the definitions of political freedom from
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Freedom House and Reporters Without Borders, while adding its third category of gender
equality.
The Ibrahim Index does have some practical limitations. It has been developed exclusively for
the forty-eight sub-Saharan African nations, thus ignoring the rest of the developing world (an
appropriate definition of this concept will be provided in; The Issue of Freedom in the
Developing World). However, the fact that the Ibrahim Index only uses external, reputable
sources, does allow for similar tools to be created for other developing nations and/or regions.
According to figures provided by Freedom House (with its narrower definition of political
freedom), still 22% of the world’s countries, and 36% of the world’s population had to be
considered as Not-Free in 20074, which results in map 1.1. Freedom of the Press was absent in
roughly the same regions in 2006, as can be seen in map 1.25.
Map 1.1: The Freedom of the World Index 2008
Map 1.2: The Freedom of the Press Index 2006
A development of an Ibrahim Index for other regions than sub-Saharan Africa should identify
roughly the same or similar suspects as identified by Freedom House.
The Ibrahim Index makes transparant a primary responsibility of government (i.e. good
governance (Van Tulder, 2006: 173) and as such is a useful tool to hold government
accountable when failing to live up to that responsibility. This is an important step in
developing civil society up to a point where it can claim its political freedom.
The Ibrahim Index further states that without political freedom, many other political goods
that collectively compose good governance (i.e. safety and security, rule of law, transparency,
and corruption, sustainable economic opportunity, and human development) are difficult to
exercise, thus emphasising the importance of political freedom for a society.
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Economic Freedom
As in the case with political freedom, economic freedom is also a concept without a clear,
undisputed, definition. Gwartney et al. (1996) proposed that individuals have economic
freedom when they can have rightly acquired property which is protected, and are free to
engage in voluntary transactions. This view is disputed by Wright (1982) who states that the
level of economic freedom is dependent on “the degree to which persons are free individually
and collectively to undertake economic activities of their choice, regardless of political
structure” (Wright, 1982: 51-52). This view is thus more linked with political freedom and the
concept of majority rules.
Two basic indices, or indicators, exist that both measure the concept in an objective,
quantitative manner, albeit through two different methodologies; the Index of Economic
Freedom as published by the Heritage Foundation and the Wall Street Journal, and the
Economic Freedom of the World index as published by the Fraser Institute.
Of these two, the latter has been used in most academic research since the former only goes
back to 1995 and uses more subjective variables. De Haan and Sturm (2000) have made a
comparison of the two indices in order to get a more sophisticated understanding of the
concept and state that both indictators are “very similar” (De Haan and Sturm, 2000: 6),
although “some elements in the measures are questionable, especially the way government
spending and taxes are taken up” (De Haan and Sturm, 2000: 18). Critics of the Heritage
Index however point to its underlying assumption that more economic freedom will
necessarily lead to more economic growth (Sachs, 2005: 320-321), which, according to some,
is not proven (Van Tulder, 2006: 39).
For the purpose of this issue paper, the definition of economic freedom as put forward by the
Economic Freedom of the World index (i.e. Fraser Index) shall be used. This index is also not
completely undisputed since its focus is mainly on low taxes and a small state, instead of on
efficient rule of law and functioning property rights.
The Fraser Index measure economic freedom through five, equally weighted, categories:
1. Size of government (expenditures, taxes, and enterprises).
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2. Legal structure and security of property rights
3. Access to sound money
4. Freedom to trade internationally
5. Regulation for credit, labor, and business
These five main categories are then divided into thirty-eight variables, or datasets, which are
drawn from reputable sources such as the World Bank.
Political Freedom as it relates to Economic Freedom
The usual suspects are identified when placing the 2005 Ibrahim Index on political freedom
next to the 2005 Fraser Institute Index on economic freedom. In table 1.1 we show the bottom
ten and top ten of the forty-eight sub-Saharan African nations as ranked on political freedom
by the 2005 Ibrahim Index, while next to it, we identify their respective position on the 2005
Fraser Institute Index on economic freedom.
Nation
2005 Ibrahim Index score6
2005 Fraser Index (out of 141)7
1. Somalia
2. D.R. Congo
3. Eritrea
4. Swaziland
5. Cote D’Ivore
6. Angola
7. Sudan
8. Equatorial Guinea
9. Guinea-Bissau
10. Liberia
23.5
24.3
25.2
31.2
32.8
36.8
38.3
38.5
38.7
40.4
n/a
139
n/a
n/a
107
138
n/a
n/a
129
n/a
1. Mauritius
2. South Africa
3. Sao Tome and Principe
4. Seychelles
5. Botswana
6. Senegal
7. Cape Verde
8. Mali
9. Mozambique
10. Niger
88.7
81.1
80.4
79.3
75.5
75.5
74.6
71.1
71.0
70.7
22
60
n/a
n/a
38
107
n/a
127
91
131
Table 1.1: 2005 Ibrahim Index on political freedom related to 2005 Fraser Index on economic freedom for sub-Saharan African nations
Where there is data available, it becomes clear that some sort of relation between political
freedom and economic freedom does exist. Further emperical evidence is limited though,
perhaps due to the tendency to lump the two concepts together (Farr, Lord, and Wolfenbarger,
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1998: 248; Gwartney et al., 1996). We did find the following statement; “the relationship
between political freedom and economic freedom is complex and by no means unilateral”
(Friedman, 1962: 10).
As stated before, political freedom is very important to achieve before any other political
goods, such as economic freedoms, can be exercised. Table 1.1 does also show that political
freedom cannot be seen as a necessary condition to achieve economic freedom, as illustrated
in the cases of Mali and Niger. This is further represented in the case of China, where political
freedoms are still largely absent (e.g. freedom of religion and freedom of the press) but
economic freedoms have been present since 1978, albeit in moderate amounts8.
Economic Freedom and Economic Growth
Another, and different, question is whether economic freedom is required for economic
growth. Opinions are divided on this issue as well. Some point to China and say that their
growth is proof that economic freedom is not a necessary condition for economic growth,
stating China’s Fraser Index score of 6.3 in 20059, which made it number 86 out of 141.
Others, however, state that the case of China actually proves that economic freedom is
necessary, or at least favorable, for economic growth (Jolly, 2003: 87). They argue that China
in 1977 would have had a Fraser Index score of close to zero and that the subsequent rise to
its current level has gone hand-in-hand with China’s economic growth. Indeed, the figures at
the macro level seem to support this position; China’s economic freedom has gone from 4.0
(1980), to 4.8 (1990), to 5.7 (2000), to its most recent level of 6.3 (2005)10. In the same
twenty-five year period the nation’s GDP has been growing at an average annual rate of 9.4%,
while the average annual per capital GDP growth rate has reached 8.1%11.
This position is further supported when the same figures for other well known developing
nations such as Brazil, Russia, India, and South Africa (i.e. the BRICS (Wilson 2003) are
examined in table 1.2.
Brazil
Russia
India
South Africa
1980
4.4
n/a
5.2
5.8
1990
4.2
n/a
4.9
5.3
2000
5.9
4.9
6.2
6.8
2005
6.0
5.8
6.6
6.8
Table 1.2: Economic Freedom of the World Index figures for BRICS 1980 - 2005
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Table 1.2 shows the same basic pattern of slowly but surely increasing economic freedom in
the other four BRICS nations over the last twenty-five years.
Another powerful indicator of the positive connection between economic freedom (in
particular economic openness) and economic growth is the amount of Foreign Direct
Investment (FDI) stock as a percentage of Gross Domestic Product (GDP) that comes into a
country (Van Tulder, 2006: 32). As shown in table 1.3, this metric has, in the BRICS nations,
increased dramatically over the last fifteen years12.
Brazil
Russia
India
China
South Africa
1990
8.5
n/a
0.5
5.4
8.2
2000
17.1
12.4
3.8
17.9
32.7
2005
24.5
22.1
5.5
13.7
32.4
2006
20.8
20.2
5.7
11.1
30.2
Table 1.3: FDI stocks as a percentage of Gross Domestic Product
Table 1.3 somewhat supports the position that the granting of economic freedoms does have
some sort of positive effect on economic growth. This position is further supported in the
literature. Most research has found that economic freedom does make a significant
contribution to economic growth (Barro and Sala-i-Martin 1995; Gastil 1978; Goldsmith
1997; Gwartney, Lawson, and Block 1996; de Haan and Sturm 2000; Islam 1996; North and
Thomas 1973; Scully 1988), while also allowing for an inverse relationship running from
economic growth to economic freedom (Barro and Sala-i-Martin 1995).
It remains unclear however exactly which of the thirty-eight variables of economic freedom as
used in this issue paper are actually responsible for any realized economic growth. It is thus
not accurate to claim that economic freedom is a necessary or sufficient condition for
economic growth (Van Tulder, 2006: 39) since a lot of other variables, besides economic
freedom, have a part to play in attaining economic growth (e.g. the price of oil13). A strong
civil society and state are needed, for instance, to prevent missuse and corruption of domestic
economic freedoms by foreign governments and multi-national corporations (MNCs). Postcolonial history of sub-Saharan Africa is filled with examples of such corruptions.
Another interesting case illustrating the complex, reciprocal, relation between the two
concepts, are the recent developments in the United States. The fact that the U.S. government
10
has effectively nationalised mortgage lenders Fannie May and Freddie Mac should show in
next years Fraser Institute data on economic freedom. In this case, economic growth (or
decline), has thus preceded a decline of economic freedom.
Economic Growth and Social Development
As discussed earlier, it is important, and the topic of this issue paper, to develop civil society
to a point where it can claim its political freedoms from the state since freedom is basically a
primary responsibility of civil society (Van Tulder, 2006: 173). This premise follows from the
distinction between the three spheres, or institutions, of society; the state, market, and civil
society (Van Tulder, 2006: 8) and is famously illustrated by the French Revolution of 1789
during which, a strong, civil society did claim its freedoms.
It is important to remember that civil society does not mean citizens per se, rather it refers to
“the sum of social relations among citizens that structures society outside politics and
business” (Van Tulder, 2006: 8-9), and includes “the family, voluntary organizations, societal
groupings, churches and trade unions” (Van Tulder, 2006: 9). Following this definition of the
sphere; civil society facilitates the production of social capital as defined by Putnam (1995),
meaning social networks and reciprocal relations between citizens. It is this social capital
which should provide a counter balance to state and market forces within the societal triangle,
enabling civil society to take primary responsibility for societal issues such as freedom,
racism, obesity, demographic explosion, and privacy (Van Tulder, 2006: 173).
Critics claim however that the trust placed in investing in social capital formation (especially
in developing nations) can become inappropriate since it can lead to the belief that civil
society organisations are agents of development and in need of support (Fine 2001). This in
turn can lead to “donor and NGO driven imperialism” (Moore 2007).
Woolcock (1998) further argues that this trust can become problematic since (a) social
relationships vary among sectors, (b) these relationships are not static and change when
economic exchanges develop, and (c) that too little or too much social capital can impede
economic performace (Woolcock, 1998: 168). It is therefore important that social capital
formation strategies, both at the micro level (i.e. grassroots) and at the macro level, appreciate
the unique characteristics of each society, including, especially, ethnic loyalties and familial
attachments (i.e. amoral familism (Banfield 1958). The dissapointments in Russia (transition
11
to a market economy), South Asia, southern Italy, and sub-Saharan Africa have all in part
been attributed to the absence of social linkages across civil society due, mainly, to these two
characteristics (Woolcock, 1998: 172).
What is important with respect to this issue paper, is the relation between economic growth
and social development (i.e. the strengthening of civil society, or the development of “the
family, voluntary institutions, societal groupings, churches and trade unions”).
Van Tulder (2006: 39) describes the relation when he states that “the building up of coherent
institutions (e.g. in civil society) and exerting influence on international firms can be
considered a precondition for economic success”. He thus assumes a positive relation between
a strong civil society with high social capital, and economic growth. This is illustrated in the
case of China’s economic growth and the Guanxi, or personal relationship, concept in Chinese
(civil) society (Van Tulder, 2006: 37-38). Another illustration of this relation can be found
when relating northern- and southern Italy’s economic growth history along Putnam (1994).
An equally potent example can be found in the success of group-based microfinance
institutions (GBMFIs), such as the Grameen Bank in Bangladesh, in civil societies with
strong social linkages, which has resulted in economic growth for those societies (Woolcock,
1998: 183-184).
All in all, drawn on the basis of the statements made so far in this issue paper, something of a
simplified conceptual model can now be made in figure 1.1.
Political freedom
Economic freedom
Economic growth
Social capital
Figure 1.1: Conceptual model
Figure 1.1 shows the complex, reciprocal relations between the four main concepts in this
issue paper. We have argued that political freedoms are, in general, important for a society in
order to develop (economically as well as socially), while the reverse relationship is also
supported (i.e. the developing of civil society will lead to political freedoms). We will now
proceed to narrow the focus of this paper.
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The Issue of Freedom in the Developing World
The issue of freedom, as discussed earlier, is a primary responsibility of civil society (Van
Tulder, 2006: 173). It is not appropriate however to claim that the issue of freedom is an issue
in all parts of the world, given the definition of issue as; “a societal matter that lacks
unambiguous legislation” (Van Tulder, 2006: 157).
The fact that the world consists of sovereign nation states and does not, for the moment, have
unambiguous international legislation, prevents this from being a universal, or global, issue.
Furthermore, this reality also points to the fact that there are many nation states that do have
unambiguous legislation on freedom, and where freedom is thus not considered an issue.
There are also nation states that lack unambiguous legislation on the issue. These cannot be
considered as generic, however, since each of these individual nation states could be in a
different stage of the issue life cycle (Van Tulder, 2006: 162) and thus requires a different
‘solution’.
This distinction is illustrated in the division of the world into three regions; the developed
world, the developing world, and the least developed world, and is measured by several
different statistical indices.
The United Nations, for instance, has its Human Development Index (HDI), which looks at
life expectancy, literacy, Gross Domestic Product (GDP), and educational attainment
(McGillivray, 1991) in order to divide the world in three general regions (see map 1.3). The
International Monetary Fund (IMF) has made a similar index which is, however, not based on
strict criteria, economic or otherwise14, and is represented in map 1.4.
Map 1.3: United Nations Human Development Index (2007)
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Map 1.4: IMF classification of national development (2008)
Map 1.3 and map 1.4 indicate a rough consensus on the division of the world between
developed, developing, and least developed nations. It is helpful for this issue paper to
provide a definition of these three concepts and their general stance on the issue of freedom.
Developed countries
Developed countries have a highly developed economy. They have high scores on the Human
Development Index (HDI), which, as discussed earlier, includes a high Gross Domestic
Product (GDP). The first countries that were stated as ‘developed’ were the United Kingdom,
Germany, and France, followed by the other European countries (Sachs 2005). These are
usually seen as a role model for developing and least developed nations.
This role model status also applies to the freedom perspective since developed countries have
a tremendous lead on the issue. Economic, political, and individual freedoms are frequently
present. These were demanded first by civil societies starting at the time of the French
Revolution and subsequently granted by governments across the region. Legislation is thus
present to protect freedoms, which include; respect for physical rights, women’s social rights,
and freedom to trade internationally.
Developing countries
Developing countries are countries which do not have a sophisticated industrial base, but are
working on the basics (e.g. Chile and South Africa). Their scores on the Human Development
Index (HDI) are medium, and include a medium Gross Domestic Product (GDP). They, as of
yet, cannot be categorized as developed countries, but are not failed states either.
Freedom is a difficult issue in developing countries. The amount of political and economic
freedoms is different in each country so no accurate generic description can be given for the
category. In an attempt to explain differences in political freedoms between individual
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developing nations, Ming-Chang Tsai (2006) considers the following factors relevant; regime
type, level of development, social structure, fractionalization, the state and military influence,
and external economic dependence. Besides regime effects, economic development generates
favourable influence, while a large poor population and military spending produce negative
impact on freedom (Ming-Chang Tsai, 2006: 317).
As discussed, civil society is primarily responsible for the issue of freedom (Van Tulder,
2006: 173). However, civil society in developing nations is generally still underdeveloped,
making the lack of freedom, both economic and political, for the most part attributable to
government and the lack of legislation. This has, in some cases, lead to the market, especially
in the form of foreign multinational corporations (MNCs), to be left free and unregulated,
which in turn can, and has, lead to the market violating human rights (Graham and Woods,
2006: 868). In several other cases however, the government’s lack of action on implementing
legislation on freedom has had a different effect on the market. A lack of unambiguous laws
does allow for arbitrary forms of legislation, which are frequently accompanied by some form
of corruption.
In line of this, members of the International Monetary Fund (IMF), the Bank for International
Settlements, the World Bank Group, and World Trade Organization, are struggling for
deregulation within developing nations in order to protect foreign investors.
Least developed countries
Least developed countries have the lowest scores on the Human Development Index (HDI)
and experience the lowest rates of economic growth (e.g. Afghanistan, Madagascar, and
Mozambique). The Economic and Social Council of the United Nations uses three criteria for
the identification of LDCs15.
1. Low income; based on a three year average estimate of the gross national income
(GNI) per capita (under $750 for inclusion, above $900 for graduation)
2. Human resource weakness; based on indicators of nutrition, health, education, and
adult literacy
3. Economic vulnerability; based on indicators of stability of agricultural production,
stability of exports of goods and services, economic importance of non-traditional
15
activities, merchandise export concentration, the handicap of economic smallness, and
the percentage of the population displaced by natural disasters.
Freedom in these countries is mostly limited because of the lack of knowledge and resources.
Civil society is even more underdeveloped than is the case in developing nations and is thus
not able to exert influence on government in order to attain economic and political freedom.
Nelson and Singh (1998: 677) argue that frequent changes in government, brought about
through non-democratic means, often lead to shifting and uncertain economic policies and the
denial of political and economic freedoms to civil society. Such an environment can severely
limit economic growth and development.
In the remainder of this issue paper the focus will be on developing nations since the concept
of freedom can be considered a more relevant issue in this region. Certain basic fundamentals
need to be present in a society for freedom to even become an issue. In the LDCs the focus is
much more on stability and security then on freedom. In this case, democratic regimes might
even be detrimental to economic growth (Nelson and Singh, 1998: 690). It is only when the
fundamentals are present that countries can proceed to the next step in their development.
Developing nations, where these fundamentals are generally present, are then challenged to
provide civil society with economic and political freedoms to start the engine of further
development. Building on the relation between freedom and growth as argued in the first parts
of this issue paper, Goldsmith (1997: 29) further argues that; “developing countries that score
better in protecting economic rights also tend to grow faster and to score higher in human
development (i.e. on the Human Development Index)” and “in addition, economic rights are
associated with democratic government and with higher levels of average national income”
(Goldsmith, 1997: 29).
All in all, there is a lot to gain for developing nations, which makes them an excellent
candidate for further analysis.
16
Multinational corporations and civil societies
The primary premise of this issue paper remains that civil society is responsible to pursue
political freedoms for themselves, which is to be achieved through the building up of civil
institutions and social capital. The goal is then to provide insights into the dynamics of the
societal triangle and the interrelations of government, the market, and civil society.
The premise can be approached from different perspectives. First, civil society itself can be
taken as a starting point. Society can organize itself in institutions (e.g. unions and other civil
society organisations) and pressure government into action. This action can consist of either
the creation or the elimination of legislation; whichever is appropriate to trigger markets,
since markets, through investment, provide further growth opportunities for civil society.
Second, government can choose to adhere to the basic principles of good governance and
provide freedoms without having to be asked. Third, the perspective of the market (in the
form of foreign multinational corporations (MNCs) can be taken. MNCs have grown
significantly in both size and influence since their inception, and therefore provide their own
dynamic to the issue of freedom in developing nations. Mind that foreign MNCs do not
necessarily have the intention to support civil society in a host country. Multinationals can
thus also affect civil society and political freedoms in a negative way, for example when the
focus is only on achieving higher turnover and lower production costs. This influence can thus
take on both a negative (i.e. short-term) or a positive (i.e. long-term) form, which leads to the
main question of the issue paper.
Which role can foreign multinational corporations play in securing political freedoms for
civil societies in developing nations?
Consequences of a lack of Freedom
What if there are no freedoms in a country, no political rights such as the right to vote or
freedom from coercion, no economic rights such as the right to property or the freedom to
trade, what would happen to such a country? What would the consequences be?
These consequences would be felt not just by civil society, but also by the domestic market
and by government. They would also be felt not just in the country lacking freedom, but also
17
by any other foreign markets trying to trade with this country (in the form of multinational
corporations). The consequences of a lack of freedom are therefore divided into two groups;
(1) for the country where the freedom is lacking, and (2) for the foreign business which is
affected by this lack of freedom.
Consequences for the country which is lacking freedom
(1) Government involvement through over-, or underregulation;
In the developing society, a lack of freedom, both economic and political, would manifest and
reinforce itself through an increase in government involvement, either by over-, or under
regulation. Too little legislation can create chaos, while too much legislation poses too many
restrictions. Citizens and companies cannot move freely, act freely, think freely. Even
legislation which might seem positive at first, may actually have negative effects (Graham
and Woods 2006). Developing nations for instance, might resort to protectionism, which can
restrict trade and development, and thus cause stagnation in growth.
(2) A lack of investments;
A second manifestation of a lack of freedom, is a drop in investments. Easterly (2001) stresses
the importance of macroeconomic stability and the relevance of economic freedom in the
process of development. Additionally, countries that enjoy higher levels of economic freedom
tend to have greater factor efficiency and higher rates of growth (De Haan and Sturm 2000).
When foreign MNCs are not presented with opportunities to expand their business into
developing countries, the latter will thus miss inflowing Foreign Direct Investments (FDI).
This can have various causes. Governments in developing countries could impose high taxes,
or pass legislation that simply forbids international trade. Alternatively, government might
have such a bad record on human and civil rights violations, that the reputational damage to
the foreign MNC makes it unsustainable for them to trade, resulting in a drop in investments.
(3) Overproduction and a surplus when goods cannot be exported;
Many developing countries have been unable to overcome the many obstacles preventing
them to expand and diversify their exports, leading to overproduction and a surplus. The
primary commodities which many developing nations rely on for export earnings have faced
stagnant demand and/or have been battered by volatile prices. The two sectors in which
developing countries do have a strong comparative advantage (i.e. agriculture and laborintensive manufactures like textiles and clothing) are heavily protected, both in developed and
18
developing countries themselves. Developing countries pose high tariffs in order to limit trade
amongst themselves; the average tariff in developing countries is fourteen percent, while the
developed countries pose tariffs of 5.2 percent (LDCs have an average tariff of 17.9 percent)
(Lankes 2002). Due too these tariff barriers, as well as other legislation, developing countries
get stuck with their own goods.
(4) Lack of important resources;
This links to the next point. Trade barriers and the lack of economic freedom prevent many
developing countries from obtaining necessary resources from abroad. This limits domestic
production and distribution of public goods, which are essential if the basic needs of the
majority of the population are to be met (Streeten 1982). Effectively reallocating existing
resources will help alleviate this somewhat.
(5) Lack in (technical) knowledge, labour, and capital, and the risk of a worker exodus;
Another major consequence of the absence of political and economic freedom is a lack of
(technical) knowledge, labour, and capital, along with an increased risk of losing workers to
foreign economies. The proposition that a higher level of education promotes economic
growth and development would suggest that government should implement policies that raise
educational attainment. Many economists and international organizations thus argue for
investments in education as a policy priority in developing nations (Glewwe 2002). These
investments come not only from government, but also from the market (through MNCs for
instance). It is therefore necessary for government to provide incentives to let knowledge
from abroad in.
A lack of freedom will result in underutilization of domestic human capital, resulting in
knowledge seeping out of the country. Streeten (1982) classified this under three headings, (a)
consumption and level of living; a misclassification of nutrition, health, and education as
consumption which has no effect on human productivity, while in fact they are important for
full labour utilization, (b) attitudes; a mismatch between aspirations of the educated and the
available employment (e.g. a large part of unemployment in Sri Lanka was explained after
appreciating the unwillingness of the educated to perform ‘dirty manual jobs’ (Streeten 1982),
and (c) institutions; the absence, or weak state, of institutions such as labour exchanges, credit
facilities, and land ownership systems.
19
(6) Higher criminality and corruption;
Big issues resulting from a lack of economic and political freedoms are criminality and
corruption. Studies have already shown that corruption negatively affects economic
performance (Schleifer and Vishny 1993; Tanzi and Davoodi 1997) and growth (Mauro
1995). In many developing countries however, corruption and criminality are methods of
acquiring basic necessities which are not available otherwise.
(7) Increased risk of civil unrest (e.g. demonstrations, strikes, and even war);
Where no political or economic freedom exists, there is a risk of divergence from, and actions
against government. This could lead to the creation of civil society organisations such as
unions, but could also be a prelude to violence within society. The cry of freedom has often
been a cover for the use of force (Clark 1990), both by civil society as by government.
Consequences for foreign businesses considering investments
(1) High risk, uncertain return;
Any foreign MNC considering investments in a host country without political or economic
freedom faces certain risks that need to be managed. The appropriation of rents, along with
potential operational uncertainties might be obstacles to investment for many foreign MNCs
looking for stable intermediaries (Aizenman 2003). Janssen (2002) distinguishes three main
categories of risks for the MNC; (1) technological risks that are tied to the process of
production and refer to uncertain output quantities, (2) economic risks that refer to uncertain
input and output prices, and (3) political risks that arise from uncertainty about property rights
on the assets of the revenue streams, and involve tax changes or, as the most drastic example,
expropriation.
(2) Potential reputational risk;
Any foreign MNC considering investments in a developing nation must also be aware of
potential reputational risks (e.g. admitting to child labour, draining of resources,
environmental pollution, bribary, association with questionable regimes).
Investors will thus seek host developing countries that are politically and economically stable.
In addition, these countries should have a sound institutional framework, a reliable public
infrastructure (energy, water, transport), and the capacity to receive and support international
investments (Böhringer and Löschel 2008).
20
The issue life cycle
As mentioned earlier in this paper the issue can first be addressed to as a ‘primary
responsibility’ of civil society. The end goal is an increase in freedom for civil society. Only
civil society can start the need for freedom and end discussions when this has been reached.
The initiative for a more active stance towards the issue of freedom, often comes from another
actor, which could mean the government. For freedom this is not true; when civil society has
an active stance, government follows. Therefore, in reality, the issue can be addressed better
as an ‘interface issue’ (Van Tulder, 2006: 193). It requires action of two of the most involved
actors, namely civil society and government, that has to bring the issue to its mature stage.
Without civil society there will be no need for freedom and without government freedom can
not be created or legislated. Markets play a significant role in reaching a maturity stage of the
freedom issue as well. Without help, in form of investments, job creation, or delivering
resources, from the market and foreign multinationals, freedom will not be brought to
maturity. It is thus not possible to say that all three actors are required for creating freedom in
developing countries, but it does help.
Issue life cycle stages
There are four stages in the issue life cycle, namely; birth, growth, development and maturity.
When addressing the issue of freedom, it can be said that there will be no need for freedom if
civil society does not indicate that freedom is lacking. The input of the issue thus comes from
civil society, or in the issue life cycle categories, from the NGO’s. They function as a
watchdog and try to stimulate the government to take action. The companies, foreign
multinationals, will then follow. The stage of freedom at this moment is different for every
country. In this paper the focus lies on the developing countries, but even within the
developing world there are different ideas of, and different stages in, freedom. In general it
can be said that developing countries are in between the birth and growth stage, while some
are in between the growth and development stage. NGO’s monitor the issue and try to keep it
on the agenda, whereas governments attempt to initiate laws and markets move from inactive
to more reactive and active players.
Post maturity stage
The post maturity stage shows three possible scenarios (Van Tulder, 2006: 166); stage ‘A’
where an issue can reappear at a later stage if the solution is not stable or if new expectational
21
gaps open up; stage ‘B’, where an equilibrium can be reached; or stage ‘C’, where an issue
can be resolved or disappear completely.
In the case of freedom it can be said that if a law has passed, or governmental regulations
have been formulated, there is no longer an issue. Issue fatigue can not really be applied to
freedom, this is illustrated in the fact that many civil leaders in the world get great support for
their fights against oppression. The end of the issue would mean that the freedom issue is
resolved and will disappear completely. The latter is not true when dealing with the freedom
issue., since freedom will always be subject to change and new desires for freedom will arise.
It is better to say that an equilibrium can been reached. The freedom issue can be rejuvenated
and could set in motion a new issue life cycle. Civil society (e.g. NGOs) is responsible for this
rejuvenation, but as long as a country is considered part of the developing countries and when
there are examples of developed countries with better opportunities, freedom will always be
an issue.
22
Unsustainable development
Self-regulation on social and environmental issues by multinational companies has been
advocated as a solution to the problems faced by many developing countries. Market
pressures, boosted by widely available information on corporate behavious, can provide
incentives for multinationals to implement codes and standards. Government action however,
in the form of regulation, but also in the form of social goalsetting and the protection of civil
society actors and institutions, remains vital.
Although multinationals and legal instruments may be able to assist developing country
governments in fulfilling these roles (Graham and Woods, 2006: 868), the question remains
whether multinational corporations (MNCs) accept their responsibility, or remain part of the
problem.
The lack of laws, combined with weak bargaining power and lack of strong government in
many developing countries, results in a situation where these countries are vulnerable to abuse
by multinational companies. This abuse can lead to, for instance, child labour, drainage of
resources, and environmental demolition. The problem for government is that they often do
not want to regulate these multinationals, since that would hamper the inflow of Foreign
Direct Investment (FDI) into the country (Graham and Woods, 2006: 868).
These multinationals have the (financial) resources and the knowledge to enter these
developing countries and set up their business. Due too a lack in legislation and their
bargaining position with respect to government (looking for an economic boost), these MNCs
can basically choose which country they want to enter. Haufler (2001) states that the ability of
international investors to move easily from country to country will lead to a “race to the
bottom”, as companies seek out sources of low-cost production, which often means countries
with weak regulatory systems.
There can be too much freedom given to the multinational corporation which can result in
issues such as low wages and pollution. It should be the primary focus of government to
uphold the freedoms of their own civil society, not provide foreign MNCs with the keys to the
city.
23
Nike and Child Labour
"By far our worst experience and biggest mistake was in Pakistan, where we blew it" -- Nike company
chairman Philip Knight in The Independent, 20 October 2001.
One of the most famous cases of child labour dealt with sportswear and equipment supplier
Nike and the Islamic Republic of Pakistan. The subcontractor in Sialkot responsible for part
of Nike’s soccer ball production, employed children, and even though the government of
Pakistan had laws against child labour at the time, no actions against Nike were taken16.
Furthermore, Nike did not only have a child labour issue in Pakistan, but also in other lowwage countries in the region, such as Vietnam (Kahle et al. 2000).
These practices were brought to light in 1996 when a photographer for Life Magazine took a
photo of a twelve year old boy stitching a Nike soccer ball (Locke 2002), and subsequently
became an issue and the cause of great reputational damage for Nike. The reason why this
issue even existed finds its cause in the fact that Nike was given too much freedom by
government, and proceeded to abuse this freedom and the childeren of Pakistan. Government
might not have been strong enough to provide a counter balance to these international market
pressures, which thus resulted in them failing their primary responsibility of good governance
(Van Tulder, 2006: 173). It might also have been that government did not see a priority in
protecting their citizens. In this case the ultimate cause can be found in the fact that civil
society in Pakistan lacked the resources (i.e. social capital) to say no to child labour.
Shell in Nigeria
The Niger Delta houses an estimated twenty million people and consists of approximately
70.000 km² of land. The country is most famous because of its oil production and exportation
(Ite, 2004: 2). The Shell Petroleum Development Company of Nigeria Limited (SPDC) is the
largest oil and gas MNC operating in the Niger Delta, it is responsible for forty percent of the
oil production (Ite, 2004: 3).
24
Nigeria is now suffering the pollution, such as oil blowouts and pipeline leakages, that is a
result of exploration and exploitation activities by foreign MNCs such as Shell. Between 1976
and 1990, an estimated total quantity of 2.105.393 barrels of oil was spilled on land, coastal,
and offshore marine environments (Daniel-Kalio and Braide, 2002: 441).
After several lawsuits, the Nigerian Federal Court decided in 2005 that Shell should stop
flaring gas, which was a cause of the pollution. Shell should have stopped doing this in 2007,
the company claims however that they cannot stop before 200917. Ever since these lawsuits,
there have been several attacks on Shell employees and factories by angered locals.
This case is an example of foreign MNCs not being responsible in their operations in host
countries, resulting in reputational damage for the MNC while having negative environmental
or social consequences for the developing nation.
Unilever and Indonesian palm oil
Unilever uses palm oil in many of its products. Because of the size of Unilever and the
consequent size of the demand for palm oil, palm oil producing nations such as Indonesia are
presented with a strong economic incentive to produce more palm oil. This has resulted in the
clearing of much of the tropical forests of Indonesia in order to free more land for palm oil
plantations.
Unilever’s suppliers are rapidly expanding their plantations through methods such as illegal
hunting and trade, logging, and forest fires. This is all detrimental to Indonesia’s system of
national parks and protected areas, which house certain endangered species, such as the
Sumatran tiger, the Asian rhinoceros, and most of the world’s remaining orangutans18.
Furthermore, Indonesia’s remaining tropical forests and peatlands have been identified as
massive carbon storehouses. The destruction of these areas would thus act as another catalyst
towards global warming19.
25
Greenpeace took matters into their own hands and stood up for the environment and civil
society. The organisation asked people to write letters to Dove, contact Unilever directly, and
spread the news. As a result of these actions, Unilever has now promised to source all their
palm oil sustainably before 201518. This proves that action from civil society organisation can
be enough to make a difference.
These cases illustrate a common approach to issue management adopted by many MNCs,
namely the inactive of reactive approach (Van Tulder, 2006: 169). In this view, issue
management is still considered more a form of crisis management, than it is considered part of
strategic management. Whenever an issue arises, through an expectational gap (Van Tulder,
2006: 158), the corporation responds in an effort to prevent or limit reputational damage. This
limited apprecation of the effect of societal and environmental issues on the corporation’s
own functioning is what makes many MNCs still part of the problem.
Although these cases do not directly deal with political freedoms as defined in the earlier parts
of this issue paper, they do illustrate the negative role that foreign MNCs can have on
developing civil societies. All three MNCs under discussion, although each to a different
extent, did not appreciate their position in the host country, in terms of size and influence. The
fact that they could have played an active or positive role, and choose not to, can be
considered just as bad as when they would actively pursue unethical interests.
"All that is necessary for the forces of evil to win in the world is for enough good men to do nothing." –
Edmund Burke, Irish philosopher and politician (1729 – 1797)
26
Sustainable development
By now, it should be clear that a lot of potential benefits for both the market (in its form of
foreign multinational corporations) and civil society exist when adopting a long-term,
proactive view on development (Van Tulder, 2006: 194). The proposition of sustainable
development, which implies the “simultaneous consideration of economic growth,
environmental protection, and social equity in business and decision making” (Eweje, 2007:
15), has opened the door for numereous working partnerships between the three societal
institutions (i.e. business organizations, civil society organizations, and government agencies).
With respect to the societal issue of freedom (i.e. political freedom), the literature suggests a
shift in the corporation’s dominant paradigm. Where responsibility used to be placed with
government, corporations now tend to acknowledge their own position (i.e. size and
influence) along with the possibilities of positive contributions (Bendell 2000; Prakash 2002;
O’Riain 2000). Plante and Bendell (1998) already stated that “the future looks bleak for
corporations who try to compete for control rather than partner for prosperity”. It thus seems
that we are headed for a time where the main connection between the private sector and civil
society will no longer be philanthropic/charitable relationships but rather active interactions to
achieve core business, along with civil society and environmental goals.
Strategic partnerships, where the partnership involves a core business or programme of
activities of both partners (Ashman, 2001: 1098), fit perfectly in this new approach (Pinney
1999) and promote the pursuit of long-term goals. Strategic partnerships are widespread and
include not only partnerships between civil society and the market but also, on occasion, the
state. They deal with a wide range of issues, both societal and environmental. Global efforts
in creating partnerships for sustainable development are made in the World Business Council
for Sustainable Development (WBCSD) who aim to “provide business leadership as a catalyst
for change toward sustainable development20”.
27
De Beers and Botswana
“We are making a contribution by helping to build a more civil society. We are part of the solution” -- De Beers
CEO Gareth Penny in The New York Times, 8 August 2008.
An excellent example of this shift in dominant paradigm and the huge positive impact a MNC
can have on the development of a developing nation when ‘partnering for prosperity’, is found
in the case of De Beers; the South African diamond mining company, and the sub-Saharan
African republic of Botswana.
De Beers started out as a privately held mining company founded by Cecil Rhodes (the
founder of Rhodesia, which is currently known as Zambia and Zimbabwe) during the African
diamond rush of the early 1880s. The company now has activities in all areas of the diamond
industry, including exploration, mining (i.e. open-pit, underground, large-scale alluvial,
coastal, and deep sea), trading, industrial manufacturing, and, since recently, retailing.
De Beers has been highly successful during the best part of its hundred year history by using
its dominant position to control supply (at one time De Beers sold between 60-80 percent of
the world’s diamonds), while also using marketing strategies to increase consumer demands
(e.g. ‘diamonds are forever’). From the 1990s onwards it became clear however, that this
business model was no longer viable. A drop in consumer demand, for one, resulted in huge
stockpiles of diamonds since a perception of scarcity had to be upheld at all times. This was
made much more difficult since diamonds, over which De Beers could not exert its influence,
were being discovered at the same time in Canada. This, together with other issues such as
conflict diamonds and the Kimberly Process21, as well as monopoly accusations on the supply
of both gem diamonds and industrial diamonds, eventually forced the company to change its
strategy.
Contrary to what might be expected from such a brazen monopolist, De Beers has always
tried to be somewhat of a steward of Africa and its resources. When the republic of Botswana
gained its independence from Britain in 1967 and a diamond mine was discovered a year
later, De Beers set up a 50-50 joint venture partnership, called Debswana, with the new
28
democratic government. About ten years later, De Beers sold a fifteen percent stake of itself
to the Botswana government, making them one of only three shareholders of De Beers.
Botswana today is considered by many as an African success story, which in no small part is
attributable to the Botswana government, De Beers, and their leadership. As with respect to
political freedoms, Botswana is ranked fifth on the 2005 Ibrahim Index, while also being one
of only eleven free nations in sub-Saharan Africa as defined by Freedom House22 (see also
table 1.1, map 1.3, and map 1.4).
The country is still highly dependent on De Beers for its Gross Domestic Product (GDP), but
it is finding new ways to diversify and develop further. With an average per capita income of
more than two to three times higher than that of surrounding countries, a democratic and
proactive government, and active efforts to combat the HIV/AIDS epidemic (Botswana was
hit extremely hard by HIV/AIDS), Botswana is equipped better than many other sub-Saharan
African nations to continue on the road of development.
The company’s other shareholders, the Oppenheimer family, have a forty percent stake in De
Beers (the third party being Anglo American plc), and have always been considered
‘enlightened corporate leaders’ (Epstein 1982). The family has traditionally been a driving
force for much of the company’s past good works in African societies. New management at
De Beers is building on the company’s legacy of responsibility. In March of this year, De
Beers relocated its value adding diamond sorting activities from London to Gaborone,
providing employment to at least an additional 600 Batswana23. Furthermore, De Beers, as of
2006, has started to publish an annual stakeholders report, which includes economics, ethics,
employees, communities, and environment sections24.
The case of De Beers shows that a MNC can include sustainable strategic partnerships at the
core of its business and as such lift an entire nation out of underdevelopment. It takes a
combination however, of government, civil society, and MNCs to make it work. If anything,
the case of De Beers proves that the presence of political freedoms are required to provide
economic growth and development of social capital, especially in sub-Saharan Africa. Angola
and the D.R. Congo also posses unexploited diamond deposits. When political freedoms are
finally available in these countries, maybe they too can prosper more.
29
Concluding remarks
Freedom is a diverse issue. The theoretical definition of freedom is clear, it consist of both
economic and political freedom which are correlated and closely connected to the size of civil
society. In practice however, freedom is different in every part of the world, for every
population, and in the different stages of hierarchy and development. Freedom has always
been subject to discussion and will continue to be subject of discussion as long as there are
differences in the amount of freedom between different countries.
After the definition of freedom and the choice made to focus on the developing nations only,
an issue statement has been made, namely;
Which role can foreign multinational corporations play in securing political freedoms for
civil societies in developing nations?
This paper focused on the role of the foreign multinational and the manner in which they
affect civil society in developing nations. These multinationals seem to be not only part of the
solution, but as well part of the problem. They positively influence a country’s civil society,
by creating a (better) working environment, bringing in and develop knowledge and provide
lacking resources, wherewith the economic and political freedom will be increased. At the
same time the multinationals are part of the problem when they abuse a country’s weakness
by neglecting their norms, values and legislation.
The creation of civil society institutions can act as a trigger for developing nations' paths to
further growth. A particularly relevant kind of institutions with respect to this paper, as it
relates to the role of MNCs, are trade unions. The existence of trade unions in developing
nations can help in building up the social capital that is needed to strengthen civil society. An
active role in supporting trade unions is something which MNCs, that are serious about
sustainable development, can adopt right away.
30
Future areas of research
After having discussed the concept of freedom at length, we have stumbled across many
different ‘gray’ areas that would benefit from more research.
Freedom is difficult to measure. In different articles, as stated in this paper, variables have
been mentioned that have an effect on the amount of economic freedom. As a total, 38
variables were found. Further research should be conducted on these variables to see what
specific effects they have on the amount of economic freedom. A comprehensive scale should
be developed in order to minimize any confusion. Countries can then be compared more
appropriately.
Some researchers see democracy as the ultimate sign of freedom, civil society then has the
opportunity to make its own choices. However, there have been some critical views to this
point (Nelson and Singh 1998). If democracy is developed to fast, corruption can take over,
which causes more problems. This should lead to further research on the ‘implementation
time’ of democracy and the problems it brings.
The implementing of democracy correlates to the implementation of freedom in a country.
The government is the deciding factor in this implementation, as they are privileged with the
power of legislation. A problem, discussed earlier in this paper, is that government does not
want to scare off foreign direct investment by implementing to much legislation. Further
research should be conducted on this issue, how far can governments of developing countries
go with legislation without scaring off multinational corporations?
As seen in the case studies in this paper, companies can both be part of the problem and the
solution. However, the difficult thing is that some multinationals become part of the solution
only after they have been accused of being part of the problem. They will not admit that they
become part of the solution just to save or improve their image. Research should be conducted
on the intentions of multinationals to become valuable for developing countries.
31
Notes
1
The Ibrahim index is compiled by a project team headed by Professor Rotberg of the Kennedy School of
Government at Harvard University and supported by an advisory council consisting of African scholars and
practitioners [online] Available at http://www.moibrahimfoundation.org/index/index.asp [accessed 20 September
2008]. The foundation is funded solely by Mo Ibrahim, a Sudanese-born mobile communications entrepreneur.
2
Source: http://www.moibrahimfoundation.org/index/by_cat_human_rights.asp [accessed 20 September 2008].
3
Freedom House 2006 Annual Report – Freedom House Donors [online]. Available at
http://www.freedomhouse.org/uploads/special_report/49.pdf [accessed 21 September 2008].
4
The Freedom in the World Index 2008 [online]. Available at
http://www.freedomhouse.org/template.cfm?page=363&year=2008 [accessed 21 September 2008].
5
The Freedom of the Press Index 2006 [online]. Available at
http://www.freedomhouse.org/template.cfm?page=251&year=2006 [accessed 21 September 2008].
6
Ibrahim Index of African Governance – Participation and Human Rights category scores [online]. Available at
http://www.moibrahimfoundation.org/index/Participation%20and%20human%20rights%20rankings%20by%20
year.pdf [accessed 20 September 2008].
7
The Economic Freedom of the World Index [online]. Available at
http://www.freetheworld.com/2007/2007Dataset.xls [accessed 20 September 2008].
8
Deng Xiaoping, the de facto leader of the People’s Republic of China from 1978 to the early 1990s, introduced
property rights for small farmers in 1978. Source:
http://en.wikipedia.org/wiki/Economic_Freedom_of_the_World#Criticism [accessed 20 September 2008].
9
The Economic Freedom of the World Index [online]. Available at
http://www.freetheworld.com/2007/2007Dataset.xls [accessed 20 September 2008].
10
The Economic Freedom of the World Index [online]. Available at
http://www.freetheworld.com/2007/2007Dataset.xls [accessed 20 September 2008].
11
Malik, Khalid, UNDP (16 December 2005) Launch of the China Human Development Report 2005 [online].
Available at
http://www.undp.org.cn/modules.php?op=modload&name=News&file=article&catid=13&topic=40&sid=236&
mode=thread&order=0&thold=0 [accessed 20 September 2008].
12
UNCTAD, World Investment Report 2007 [online]. Available at http://www.unctad.org/fdistatistics [accessed
21 September 2008].
13
New York Times op-ed contributer Thomas Friedman has frequently suggested an inverse relation between the
price of oil and the pace of freedom, proposing that when the price of oil goes up, the spread of freedom goes
down (in oil-producing countries). Friedman (2008) What did we expect? [online]. Available at
http://www.nytimes.com/2008/08/20/opinion/20friedman.html?_r=1&oref=slogin [accessed 22 September
2008].
14
Countries designated by the International Monetary Fund in the April 2008 World Economic Outlook [online].
Available at http://www.imf.org/external/pubs/ft/weo/2008/01/weodata/groups.htm [accessed 23 September
2008].
15
The Economic and Social Council of the United Nations criteria for the identification of the LDC’s [online].
Available at http://www.un.org/special-rep/ohrlls/ldc/ldc%20criteria.htm [accessed 23 September 2008].
16
International and National laws related to child labour [online]. Available at
http://www.labourunity.org/childlabourlaws.htm [accessed 24 September 2008].
32
17
Milieudefensie; Shell, clean up your mess in Nigeria [online]. Available at
http://www.milieudefensie.nl/globalisering/doemee/earthalarm/ea109_engels_shell [accessed 24 September
2008].
18
Orang-utan protest and customer outcry prompt Unilever forest destruction climb down [online] Available at
http://www.greenpeace.org/international/news/unilever-palm-oil080501 [accessed 24 September 2008].
19
Greenpeace International: Palm oil: Cooking the Climate, once you pop, you can’t stop [online]. Available at
http://www.greenpeace.org/international/news/palm-oil_cooking-the-climate [accessed 24 September 2008].
20
WBCSD Mission Statement [online]. Available at
http://www.wbcsd.org/templates/TemplateWBCSD5/layout.asp?type=p&MenuId=NjA&doOpen=1&ClickMenu
=LeftMenu [accessed 24 September 2008].
21
The Kimberly Process Certification Scheme (KPCS) became effective in 2003 and was an effort by
governments, the international diamond industry, and civil society organizations to limit the trade in conflict
diamonds. These are rough diamonds which are traded illegitimacy and whose proceeds are used to fund rebel
groups in parts of Africa.
22
The Freedom in the World Index 2008 [online]. Available at
http://www.freedomhouse.org/template.cfm?page=363&year=2008 [accessed 24 September 2008].
23
Nocera, J. (2008) ‘Diamonds are forever in Botswana’, New York Times Online, August 8, 2008. Available at
http://www.nytimes.com/2008/08/09/business/worldbusiness/09nocera.html?_r=1&ref=business&oref=slogin
[accessed 24 September 2008].
24
De Beers 2007 Report to Society [online]. Available at http://www.debeersgroup.com/en/Mediacentre/Reports/2008/2007-Report-to-Society/ [accessed 24 September 2008].
33
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