Over the past 20 years, the Center for International Private Enterprise (CIPE) has diligently helped businesses in emerging markets strengthen integrity and combat corruption. CIPE has supported the private sector on three levels: internally by developing corporate compliance programs; externally through public communication of its commitments, policies, and practices; and through community-building via collective action initiatives committed to reducing bribery.
In these efforts, CIPE has understood corruption holistically as a collective action problem—and sometimes a strategy to deal with other systemic problems—rather than only the result of individual actors engaged in discrete incidences of corruption. However, a principal agent lens is still usually the guiding theory behind policies proposed by development and donor organizations.
While such policies, which tend to involve reducing discretion, improving oversight, and raising penalties, are important, CIPE has looked for collective action solutions to systemic corruption. To this end, a Guide for Business on Fighting Corruption Through Collective Action was jointly published in 2008 by CIPE, the World Bank Institute, Transparency International USA, Global Advice Network and Siemens. Twelve years later, this guide continues to serve as a useful toolkit to organize businesses in the fight against corruption.
At The C20
Last month, CIPE presented its unique private sector collective action approach in a session at the C20 Summit. Similar in structure to the B20, where CIPE also participated this year, the C20 provides civil society organizations (CSOs) with an opportunity to influence some of the most important global issues. This global roundtable gives CSOs an international platform to address common issues and challenges, and to connect them to the agenda of the G20.
This year’s virtual C20 Summit sessions gathered a whopping 40,000 global participants from across 118 countries. The CIPE-organized event, Collective Action: Unlocking SMEs Ability to Combat Corruption and Monitor Public Funds, explored three main themes:
- How collective action can bring together businesses—especially small and medium-sized businesses (SMEs)—and other stakeholders in a way that benefits wider society;
- How business coalitions are one of the only groups with enough potential influence to shift societal norms surrounding corruption;
- How private sector-driven collective action initiatives have the political heft to be heard when advocating for greater transparency in public spending—a particular concern during the COVID-19 pandemic and its aftermath.
These themes were explored in the session moderated by CIPE Senior Program Officer Katya Lysova, who leads CIPE’s collective action initiatives in Ukraine, Hungary, and Armenia. The event also featured two panelists: Pana Ratanabanangkoon from the Thailand Private Sector Collective Action Against Corruption (CAC) and Ieva Lapekeine from Lithuania’s Clear Wave. Ratanabanangkoon and Lapekeine direct collective action initiatives in their countries and have played a leading role in national discussions about how the business community can help address corruption.
The panel highlighted how the private sector has often been neglected in anti-corruption initiatives despite playing a key role in facilitating or blocking corrupt transactions. Furthermore, many businesses, like retailers and popular consumer brands, are closely connected to citizens, giving them a unique capacity to communicate how corruption can harm the lives of ordinary people.
In addition, the event highlighted how collective action initiatives can change the landscape of public debate. Many emerging economies lack meaningful mechanisms for private-public dialogue—particularly ones that include small and medium-sized enterprises (SMEs). Private sector coalitions can provide a way for governments and the broader private sector to interface on policy issues and build trust. Doing so allows businesses to advocate for common goals, like fighting corruption, that promote better governance and a fairer marketplace. It also provides SMEs with a way to hold governments accountable for their commitments.
These themes resonate with CIPE, whose mission is rooted in a commitment to economic and political freedom and finding the synergy between a vibrant and ethical business sector and effective democratic government. CIPE will continue to promote private-sector solutions to corruption by leading the formation of business coalitions that advocate for higher standards of integrity, transparency, and accountability.