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Sustainability 2018, 10(7), 2400; https://doi.org/10.3390/su10072400

Institutional Voids and the Philanthropization of CSR Practices: Insights from Developing Economies

1
Turku School of Economics, University of Turku, 20500 Turku, Finland
2
Kent Business School, University of Kent, Kent CT2 7FS, UK
*
Author to whom correspondence should be addressed.
Received: 31 May 2018 / Revised: 26 June 2018 / Accepted: 4 July 2018 / Published: 10 July 2018
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Abstract

Corporate social responsibility (CSR) practices and conceptions vary across sectors and nations. However, there is a general tendency among academics and practitioners to present CSR in Africa as activities characterized by philanthropy due to the existence of institutional voids. This review of the current literature demonstrates that weak institutions lead to weaker bargaining powers designed through the historical and geopolitical institutional frameworks of international business and global governance systems. Accordingly, multinational corporations (MNCs) take advantage of such weaknesses to define CSR on their own terms by replacing the ideal responsible and sustainable innovations with ad hoc philanthropy that diverts the attention from the negative consequences of neoliberal ‘structures of accumulation’. This is akin to aid that hardly contributes to structural changes, but rather leads to complacency, corruption, dependency, boutique projects, disguised exploitation, and the misuse of corporate political power to achieve corporate bottom lines. The implications of the results are vast, and they are generalizable to all weaker institutional settings. Thus, weaker institutions create the necessary regulatory, political, economic, and governance climate that perpetuates a pattern of abuses and ethical violations that are then masked with philanthropy. It is argued that the fundamental institutional and geopolitical contexts within which MNCs interact with nation states cannot be ignored in any comprehensive analysis that seeks to meaningfully shed light on the comparative differences of CSR practices. The neglect of the web of contextual, historical, and geopolitical issues in which CSR is entrenched and framed diverts attention from the origins of the socio-economic and environmental questions to philanthropy as a final solution, which has hitherto been perpetuated with undesirable outcomes. View Full-Text
Keywords: Africa; captured institutions; comparative CSR; developing economies; institutional void; paradigm change; strategic corporate responsibility Africa; captured institutions; comparative CSR; developing economies; institutional void; paradigm change; strategic corporate responsibility
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Ahen, F.; Amankwah-Amoah, J. Institutional Voids and the Philanthropization of CSR Practices: Insights from Developing Economies. Sustainability 2018, 10, 2400.

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