Part One: The New Role of the Private Sector in Economic Development

Chapter List

Overview

^[1]

Events of the past several years have led to a dramatic increase in the public's scrutiny of the corporate sector in the United States. A variety of financial reporting scandals, from Enron to WorldCom to Global Crossing, have shaken public faith in the honesty of corporate officials and the integrity of the information they provide. The same scandals also have led to federal election campaign finance reform and a broader questioning of the role of corporate money in the political process.

Also, the opening of global markets has sparked protests at the World Trade Organization meetings of 1999 in Seattle and at subsequent international meetings. Corporations stand accused of being agents of immiseration in the developing world; critics tie them to problems such as public health, child labor, environmental preservation, and workplace safety in those developing nations where the firms produce and sell.

All of these concerns of expanding global trade and corporate scandals have come together to raise the issue of "corporate engagement" in developing countries, that is, the activities of corporations outside their standard, market-based relationships. ^[1] We use this term rather than the more conventional "corporate social responsibility" for two reasons. First, corporate responsibility is now frequently used with regard to financial reporting corporations have the responsibility to report honestly and obey...