Norms or behavioral guides institutionalize code of conduct that put limit into some choices “by making them less worthy of esteem than others” (Conge, 2010). In today’s world where goods, people, services and capital move around freely, we observe the evolution of the distribution of rewards in three different levels: the conduct of the distribution of wealth (performed by states), the appropriateness of business (performed by multinational corporations), as well as the promotion of global partnership for development (performed by UN member states and nongovernmental organizations).

Kwame Appiah in Cosmopolitanism argued about the need of reframing identity saying, “we are responsible for every other human being” (p. 2185, Kindle Book). We lived in a world of interconnectedness where the pursuit of our trivial deeds can affect millions of others. For example, the anthropogenic fossil fuel emissions to the atmosphere indeed have a perfect correlation with human behavior and climate change. Even though the effect of global warming on the world economy has been discussed largely since the release of 700- pages Stern Review on the Economics of Climate Change Report in 2006, the needs for greenhouse gases’ abatement was not seen as something has to be regulated among states. It was in 1997 whenever the issues begun to get government’s attention. UNDP mentioned that the failure to control human-enhanced emission to the atmosphere would abandon the “bottom billion [1]” efforts to achieve their Millennium Development Goals. Altogether, these would reinforce inequality between the haves and the have-nots.

Earth’s atmosphere is a public good. Nation-states can easily draw their borders; entity that made many states went to war in the past. Atop of their borders, there is not much they can do. You cannot trap your greenhouse gases’ emission right above you and make sure that they are not going to travel to other part of the hemisphere. The accumulated effect of having more than enough greenhouse gases’ at the atmosphere is going to expose countries with climate change and the rise of sea level. For some, those who are belong to developing countries and least developing countries; the cost of dealing with severe drought, more violent storms and monsoonal floods becomes additional burden for the majority of the population. These countries are suffering from lack of public infrastructures and effective disaster risk reduction systems in place. People do learn their lesson from natural disasters, but if you are not supported adequately, you will just have an increased number of casualties without something you can really do about that. Lack of public infrastructure is going to add more tolls in time of disaster. Difficult access as the result means less survivors you can keep alive from injuries or sickness in the aftermath of the disaster. Once humans overload the carrying capacity of Earth’s atmosphere through their enhanced fossil fuel combustion, due to the fact that once emitted, carbon dioxide (CO2) and other greenhouse gases stay in the atmosphere for a long time, humans have to deal with this over decades.

Further, Kwame Appiah proposed two principles to enable us to cope with this situation. According to him, human being could do most well by pondering on the root causes of these inequalities and influencing larger policy decisions. Also, human being should be the advocates for “universal concern and respect for legitimate difference” (p. 143, Kindle Book).

First level in the evolution of the distribution of rewards is the conduct of the distribution of wealth performed by states to its citizens. Some economists challenged the development approach of the 1980s lead by Adam Smith’s theory of The Wealth of Nations and Rostovian takeoff model. These approaches presumed a close link between national economic growth, measured by Gross National Product or GNP and Purchasing Power Parity or PPP, and the distribution of wealth, thus, a better standard of living of the people. The opponents, including Dr. Mahbub ul-Haq, a world-renowned Pakistani economist, came up with an alternative model – Human Development -, which was based on following factors:

  • Growing evidence that did not support the then prevailing belief in the “trickle down” power of market forces to spread economic benefits and end poverty [2]
  • The human costs of Structural Adjustment Program became more apparent [3]
  • Social ills (crime, weakening of social fabric, HIV/AIDS, pollution, etc.) were still spreading even in cases of strong and consistent economic growth
  • A wave of democratization in the early 90’s raised hopes for people-centered models; a model of governance in which all eligible citizens have an equal say in the decisions that affect their lives

Furthermore, the late Dr. Mahbub ul-Haq emphasized that “The basic purpose of development is to enlarge people’s choices. In principle, these choices can be infinite and can change over time. […] The objective of development is to create an enabling environment for people to enjoy long, healthy and creative lives” (1998).

A fundamental change to enlarging people’s choices is building human capabilities – the range of things that people can do or be in life. The most basic capabilities for human development are to lead long and healthy lives, to be knowledgeable, to have access to the resources needed for a decent standard of living and to be able to participate in the life of the community. Without these, many choices are simply not available, and many opportunities in life remain inaccessible. In this context, Human Development Index nowadays matters more for international relations to measure average achievements in a country rather than GDP per capita. It is a composite index that measures the average achievements in a country in three basic dimensions of human development: a long and healthy life –as measured by life expectancy at birth; knowledge –as measured by the adult literacy rate and the combined gross enrollment ratio for primary, secondary and tertiary schools; and a decent standard of living –as measured by GDP per capita in purchasing power parity (PPP) US dollars.

The second level in the evolution of the distribution of rewards is the appropriateness of business performed by multinational corporations. The proponents of civic responsibility of business challenge the basic tenets of economic liberalism. They argue that corporations operate in two worlds. One is the material world of property, resources, ownership and production. The other is world of rights and responsibilities (Conge, 2010). The latter argument is supported by the selected code of conduct that was endorsed by the United Nations and its organ. Universal Declaration of Human Rights that was adopted by the United Nations General Assembly in 1948 served as authoritative interpretation of the term human rights mentioned in the United Nations Charter. Its main objective was to promote and encourage respect for human rights and for fundamental freedoms for all without any discrimination in regard to race, gender, language or religion. Prior to this, in 1932 ILO Convention concerning Forced or Compulsory Labor, made it clear that each states who ratified the Convention had to suppress the use of forced or compulsory labor in all form within the shortest period possible. In 1953, ILO Convention on Equal Remuneration entered into force enunciating the concern of equal pay for equal work for both women and men.

The recent codes of conduct such as Amnesty International Human Rights Principles for Business, the Global Sullivan Principle, and the United Nations Global Compact, all gauge the necessity that multinational corporations have a responsibility to contribute to the promotion and protection of human rights. Having said this, it is now a moral imperative that the conduct of business has to deliver both rights and responsibilities for human being. We might want to recall the case of “blood diamond” when the world was alerted to the problem of conflict diamond as a funding source for rebel movements in Africa; government certification was put in place, caused the uncertified diamonds were sold at discount price. The practice appeared to have been partly responsible for the collapse of RUF in Sierra Leone and UNITA in Angola.

The same practice now is advocated to take place in regard to the mineral conflict in the Democratic Republic of the Congo. The DRC is the world’s largest producer of ore. Ore is a mineral that produces Tin (Sn), Tungsten(W), Tantatum (Ta), and Gold (Au) that end up being used in electronic devices such as cell phone. Raise Hope for Congo (http://www.raisehopeforcongo.org), a campaign aims to advocate for the protection and empowerment of Congolese women and girls, tried to pass the Conflict Mineral Trade Act becomes a law: House Resolution 131. This bill is the strongest effort to date that addresses the scourge of conflict minerals in DRC.

Vogel through The Market for Virtue made a very compelling case regarding Corporate Social Responsibility (CSR), one way of assessing the impact of social expectations on business. He argued that market puts value on things, but they are a lot of variations out there about what matters more. Corporate Social Responsibility argued that the conduct of business that carefully assessed transparency, human rights and environmental protection does pay. Some nongovernmental organizations nowadays have been very active in attributing the conduct of business to social expectations. In Africa, the NGOs are trying to deal with the curse of natural resources, the fact that the ownership of natural resources has been contributed to the civil wars and political discontents, urged the world community to strengthen the rule of plays. One of them is requiring certification for every good from conflicted country to enter the world market. [4]

In addition to this, we might also want to recall the case of Chad in enunciating the most ambitious corporate effort to link energy exploration with human rights and community development. ExxonMobil invested USD3.5 billion on 660-mile pipelines from the oil fields of Chad to Cameroon. Later, the company agreed to work with NGOs and the World Bank to monitor the government’s use of its royalty payments. The practice essentially assumed the roles of development agency, human rights promoter, and environmental watchdog at the same time (p. 148).

Muhammad Yunus through Creating a World without Poverty went further to share his best practices of the success of social business. Yunus first created the Grameen Bank to provide microloans to the poor women in Bangladesh. Nowadays, he expanded his social business through the 26 sister organizations of the Grameen Bank to better serve the need of impoverished households in Bangladesh to overcome poverty. Yunus referred the requirements of being able to overcome poverty to ten-point system describes the specific living conditions. “Once a family has succeeded in clearing all ten of these hurdles [5], then we at Grameen Bank consider them to have escaped from poverty” (p. 110). Lastly, in the case of the promotion of global partnership for development, performed by UN member states and nongovernmental organizations. The United Nations adopted United Nations Millennium Goals (MDGs) in 2001 to recognize the need to assist impoverished nations more aggressively. The goals are intended to spur development by improving social and economic conditions in the world’s poorest countries to achieve a better life by the year 2015. They were derived from earlier international development targets and were officially established at the Millennium Summit in 2000, where 189 UN member states adopted the United Nations Millennium Declaration, from which the eight goals and 21 targets were promoted. The eight Millennium Development Goals are to eradicate extreme poverty and hunger, achieve universal primary education, promote gender equality and empower women, reduce child mortality, improve maternal health, combat HIV/AIDS, malaria and other diseases, ensure environmental sustainability, and develop a global partnership for development. The goals represent a partnership between the developed countries and the developing countries “to create an environment –at the national and global levels alike- which is conducive to development and the elimination of poverty”. It is also important to note the changes the intention of serving this end brought to some existing international relations’ practices.

Despite the debate on its effectiveness, the landscape of aid policy has changed since Rosenstein-Rodan in 1943 advocated for aid to Eastern and South-Eastern Europe. At the level of ends, the basic objective of development (expressed in GDP growth) in the recipient country has been replaced by the objective of poverty alleviation (World Bank, 200). At the level of means, policy conditionality has been dramatically replaced with a concept of selectivity, in which aid agreements are only concluded with those countries whose policies are in some sense already acceptable. Furthermore, some countries are now more acceptable to grant debt cancellation or debt swap. We could recall the practice of debt-for-development swap between the Government of the Republic of Indonesia and the Government of Italy signed in 2005. The agreement made it possible for the GoI to allocate the total amount of almost 30 million Euros for Aceh and Nias rehabilitation and reconstruction rather than to pay it back to Italy.

In sum, these three levels of evolution of the distribution of rewards matter for international relations; it changed the way states, multinational corporations, and the group of states working together to promote human development.

FURTHER REFERENCES

Alessandra Casella and Barry Eichengreen, Can Foreign Aid Accelerate Stabilisation in The Economic Journal 106.436 (1996): 605-619.

Alex De Waal, Democratizing the Aid Encounter in Africa in International Affairs 73.4 (1997): 623-639.

Arthur A. Goldsmith, Foreign Aid and Statehood in Africa in International Organization 55.1 (2001): 123-148.

Bjørn Lomborg (Ed.), How To Spend $50 Million To Make The World A Better Place. Cambridge: University Press, 2006.

Bruce Bueno De Mesquita and Alastair Smith, A Political Economy of Aid in International Organization 63 (Spring, 2009): 309-340.

Carl-John Dalgaard, et. Al, On the Empirics of Foreign Aid and Growth in The Economic Journal 114.496 (2004): F191-F216.

Craig Burnside and David Dollar, Aid, Policies, and Growth in The American Economic Review 90.4 (2000): 847-868.

Dambisa Moyo, Dead Aid, Why Aid Is Not Working and How There Is A Better Way For Africa. New York: Farrar, Straus and Giroux, 2009.

David Vogel, The Market for Virtue: The Potential and Limits of Corporate Social Responsibility. Washington, D.C.: Brookings Institution Press, 2006

Eric Neumayer, The Determinants of Aid Allocation by Regional Multilateral Development Banks and United Nation Agencies in International Studies Quarterly 47.1 (2003): 101-122.

Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else. New York: Basic Books, 2001

Jagdish Bhagwati, Free Trade Today, Princeton, NJ: Princeton University Press, 2003.

Kwame Anthony Appiah, Cosmopolitanism: Ethics in a World of Strangers, New York: W. W. Norton, 2007

Muhammad Yunus, Creating a World Without Poverty: Social Business and the Future of Capitalism. New York: Public Affairs, 2009

Paul Collier, The Bottom Billion: Why the Poorest Countries Are Falling and What Can Be Done about It. New York: Oxford University Press, 2007.

________ and David Dollar, Development Effectiveness: What Have We Learnt? in The Economic Journal 114.496 (2004): F244-F271.

________ and Jan Willem Gunning, Why Has Africa Grown Slowly? in Essentials Reading in Comparative Politics. Ed. Patrick H. O’Neil and Ronald Rogowski. New York: W. W. Norton and Company, 2010.

Paul Mosley, et. Al, Aid, Poverty Reduction and the ‘New Conditionality’ in The Economic Journal 114.496 (2004): F217-F243.

Philipp Harms and Matthias Lutz, Aid, Governance and Private Foreign Investment: Some Puzzling Findings for the 1990s in The Economic Journal 116 (July, 2006): 773-790.

Raghuram Rajan and Arvind Subramanian, Does Aid Affect Governance? in The American Economic Review 97.2 (2007): 322-327.

Shannon Kindornay, Brandon Lum, and Peter Sawyer, The Democratic Republic of the Congo Risk Assessment Brief, January 2009. Retrieved from http://www.carleton.ca/cifp/app/serve.php/1221.pdf

Stephen Knack, Does Foreign Aid Promote Democracy? in International Studies Quarterly 48.1 (2005): 251-266.

Thad Dunning, Conditioning the Effects of Aid: Cold War Politics, Donor Credibility, and Democracy in Africa in International Organization 58.2 (2004): 409-423.

UNDP, Human Development Report 2005, International Cooperation at a Aid, Trade, and Security in an Unequal World. ______: Hoechstetter Printing Co., 2005.

William Easterly, et. Al, Aid, Policies, and Growth: Comment in The American Economic Review 94.3 (2004): 774-780.

Amnesty International Human Rights Principle for Business

Corporate Accountability for Human Rights Abuses: A Guide for Victims and NGOs on Recourse Mechanisms

International Labor Convention: Forced or Compulsory Labor

International Labor Convention: Equal Remuneration for Men and Women

Report by the Commission on the Measurement of Economic Performance and Social Progress (accessible through http://www.stiglitz-sen-fitoussi.fr/documents/rapport_anglais.pdf)

The Added Value of the UN Norms, A Comparative Analysis of the UN Norms for Business with Existing International Instruments

The Global Sullivan Principles

The United Nations Global Compact

Universal Declaration of Human Rights

ENDNOTES

[1] – The term “Bottom Billion” coined from Paul Collier’s book “The Bottom Billion, Why the Poorest Countries Are Failing and What Can Be Done About It”. He refers them as “those countries at the bottom that are falling behind, and often falling apart. They coexist with the twenty-first century but their reality is the fourteenth century: civil war, plague, and ignorance. They are concentrated in Africa and Central Asia, with a scattering elsewhere” (p. 3, 2007).

[2] – I think it is important to include the following passages from Michael P. Todaro’ Economic Development, 11th Edition, page 15 to show the failure of trickle down effect: “Dudley Seers posed the basic question about the meaning of development succinctly when he asserted: ‘The questions to ask about a country’s development are therefore: What has been happening to poverty? …[T]o unemployment? …[T]o inequality? If all three of these have declined from high levels, then beyond doubt this has been a period of development for the country concerned. If one or two of these central problems have been growing worse, especially if all three have it, it would be strange to call the result ‘development’ even if per capita income doubled’.”

[3] – It is the main vehicle of Bretton Wood’s institutions’ enforcement of their free market mantra of the 1980s: the Washington Consensus. The term was initially coined in 1989 by John Williamson to describe a set of ten specific economic policy prescriptions that he considered should constitute the “standard” reform package promoted for crisis-wracked developing countries by Washington DC-based institutions such as the IMF, World Bank and US Treasury Department. The elements of the Washington Consensus are (1) fiscal discipline; (2) redirection of public expenditure priorities towards health, education and infrastructure; (3) tax reform, including the broadening of the tax base and cutting marginal tax rates; (4) unified and competitive exchange rates; (5) secure property rights; (6) deregulation; (7) trade liberalization; (8) privatization; (9) elimination of barriers to FDI; and (10) financial liberalization.

[4] – Kimberley Process Certification Scheme is a joint governments, industry and civil society initiative to stem the flow of conflict diamonds – rough diamonds used by rebel movement to finance wars against legitimate governments (see http://www.kimberleyprocess.com/en) For more information about blood diamonds, see http://www.globalwitness.org/conflict-diamonds and http://www.globalpolicy.org/the-dark-side-of-natural-resources-st/diamonds-in-conflict.html) In addition to such practice, Revenue Watch Institute pioneered the development and implementation of the Extractive Industry Transparency Initiative (EITI) – global standard for transparency and accountability in the minerals sector (see http://www.revenuewatch.org/)

[5] – The ten points of specific living conditions required to escape from poverty are (p.110 – 111):

  1. The bank member and her family live in a tin-roofed house or in a house worth at least 25,000 taka (roughly equivalent to $370). The family members sleep on cots or a bedstead rather than the floor
  2. The member and her family drink pure water from tube-wells, boiled water, or arsenic-free water purified by the use of alum, purifying tablets, or pitcher filters
  3. All of the member’s children who are physically and mentally fit and above the age of six either attend or have finished primary school
  4. The member’s minimum weekly loan repayment installment is 200 taka (around $3)
  5. All family members use a hygienic and sanitary latrine
  6. All family members have sufficient clothing to meet daily needs, including winter clothes, blankets, and mosquito netting
  7. The family has additional source of income, such as a vegetable garden of fruit-bearing trees, to fall back on in times of need
  8. The member maintains an average annual balance of 5,000 taka (around $75) in her savings account
  9. The member has the ability to feed her family three square meals a day throughout the year
  10. All family members are conscious about their health, can take immediate action for proper treatment, and can pay medical expenses in the event of illness

In addition to this, Grameen Bank supports its social agenda through the Sixteen Decisions (p. 58):

  1. The four principles of Grameen Bank –Discipline, Unity, Courage, and Hard Work- we shall follow and advance in all walks of our lives
  2. We shall bring prosperity to our families
  3. We shall not live in dilapidated houses. We shall repair our houses and work towards constructing new houses as soon as possible
  4. We shall grow vegetables all the year round. We shall eat plenty of them and sell the surplus
  5. During the plantation season, we shall plant as many seedlings as possible
  6. We shall plan to keep our families small. We shall minimize our expenditures. We shall look after our health
  7. We shall educate our children and ensure that they can earn to pay for their education
  8. We shall always keep our children and the environment clean
  9. We shall build and use pit latrines
  10. We shall boil water before drinking or use alum to purify it. We shall use pitcher filters to remove arsenic
  11. We shall not take any dowry at our son’s weddings: neither shall we give any dowry in our daughters’ weddings. We shall keep the center free from the curse of dowry. We shall not practice child marriage
  12. We shall not inflict any injustice on anyone; neither shall we allow anyone to do so
  13. For higher income we shall collectively undertake bigger investments
  14. We shall always be ready to help each other. If anyone is in difficulty, we shall all help
  15. If we come to know of any breach of discipline in any center, we shall all go there and help restore discipline
  16. We shall take part in all social activities collectively