Enhancing the contribution of FDI to development: A new agenda for the corporate social responsibility community, international labour and civil society, aid donors and multilateral financial institutions

Both positive contributions and negative damages from foreign direct investment are greater than even the most sophisticated of today’s models and estimating techniques can portray. Securing these positive contributions and avoiding the negative damages requires strategies to correct for market failures, to supply public goods and international standards, to capture positive externalities and limit negative externalities. Members of international civil society, labour groups, corporate social responsibility advocates, international donors, and multilateral lenders should fashion their agenda more closely – as outlined here – to provide those external pressures and actions needed to optimize the impact of mainstream transnational corporate activities on host country growth and welfare. The findings reported here should not in any way undercut the efforts of those who simply want to pressure transnational corporations to “give back” more to the communities where they operate. Corporate charity surely has its place, but the pro-poor sustainable development policy community will want to focus on the larger – and in many ways more important – set of targets sketched out here.