As the world becomes increasingly globalized, there is much attention is being focused on the implications the spread of business, knowledge and capital on developing countries. In particular, more scholars are focusing on the role that extractive MNC’s play in third world countries. Proponents argue that MNC’s are beneficial due to spillovers of knowledge, as well as job creation. Adversaries argue that they play a prominent role in exploiting host countries for their resources while engaging in corrupt behavior that only benefits the executives and the elite.
This study asserts that under certain circumstances, extractive MNC’s may lead to more corruption in developing countries, especially when corruption is already the norm in the given country. The petroleum industry is both highly lucrative and secretive within developing countries. This is the result of the ruling elite controlling the means of production thereby allowing them to manage oil revenue in a corrupt manner without accountability. (Obi, 2010). Furthermore, extractive MNC’s tend to be profit-seeking and liable to adapting to the environment in which they operate within (“Government Turnover and the Effects of Regime Type,” n.d.). Given this information, this study theorized that a combination of greedy local elite combined with adaptive MNC’s will create a relationship that foster further corrupt behavior.
By monitoring involvement levels of extractive MNCs and analyzing how their level of involvement correlated with changes in corruption rates, this study identifies whether the presence of extractive MNC’s in developing countries has an impact on corruption rates over time. Key findings of this study indicate that extractive MNC’s have a clear impact on corruption rates in countries that are already experiencing high levels of corruption. Even in countries that are not experiencing previously high levels of corruption saw minor increases in corruption levels upon the arrival of an extractive MNC.
Williams, Spencer, "Money Made Me Do It: A Comparative Case Study Examining the Connection Between The Presence of Extractive MNC’s and Corruption in Developing Countries." (2018). Senior Independent Study Theses. Paper 8175.
MNCs, Corruption, Investment
Bachelor of Arts
Senior Independent Study Thesis
© Copyright 2018 Spencer Williams