Cite this brief: Ganson, Brian. 'Business (not) for peace: Incentives and disincentives for corporate engagement on good governance and peaceful development in the African context'. Acume. https://www.acume.org/r/business-not-for-peace-incentives-and-disincentives-for-corporate-engagement-on-good-governance-and-peaceful-development-in-the-african-context/

Brief created by: Professor Brian Ganson | Year brief made: 2022

Original research:

Research brief:

This research is a review piece that examines assumptions about the private sector and its peace and development impact, and also questions those assumptions that are underlying major policy instruments, particularly in Europe.

There is a major assumption underlying important policy instruments, especially in Europe, that there is an inherent benefit to private sector development, that the private sector has a positive impact in reducing conflict and promoting peace and development.

The assumption is also that the private sector is therefore a necessary partner in development, who has an incentive to pursue positive peace and development goals. This article’s significance is that it critically analyses this assumption.

Actually, periods of fast growth of the private sector are often associated with conflict escalation and violence. One of the main reasons for it is that the private sector benefit from having a chaotic environment. It allows the businesses not to pay workers a living wage, to not care about negative externalities on the environment, to not contribute to making the social conditions of the area better. If a company can externalise and not bear these costs, it can be very profitable. But companies that do that are profitable for the wrong reasons. Another reason for this is also that the states, the government in power that bargains with the private sector has interests different than creating broad, inclusive development and peace.

The fundamental conclusion of this article is that you cannot rely on the supposed natural incentives that companies have to be good actors in fragile places. Rather, a regulatory approach is required. An effective regulatory regime will enable good actors that act in a positive way for development and peace.

Without regulations in place to guarantee behaviour, these good actors are unable to compete with their opportunistic counterparts. Because regulatory regimes are complex, it is best to gather as many actors to the table as possible. This is easier said than done. However, one thing especially European policy makers could do is to stop subsidising and actively pushing companies into fragile areas.

Findings:

Advice: