Business and development: making sense of business as a development agent

Abstract

PurposeThe purpose of this paper is to provide a framework for understanding and analysing business's role as a development actor, and the distinction between development tool and development agent.Design/methodology/approachThe paper presents a theoretical analysis based on secondary data and empirical research.FindingsBusiness has various roles to play in the social and economic development of poorer countries, but are all of them equally important and laudable? Mainstream economics has long held that the private sector is essential to economic prosperity, and this has led policy‐makers and neoliberal thinkers to treat it as a tool for development. But under what circumstances does business go beyond acting out its assigned role as a tool of development to become what this article calls a “development agent” – something that consciously strives to deliver, and moreover be held to account for, developmental outcomes?Research limitations/implicationsThe article presents a framework for a more structured approach to further empirical research, but does not claim to apply that framework in empirical situations.Social implicationsDespite the considerable literature advocating why business should be a development agent, much less attention has been paid to two more fundamental questions: whether and under what circumstances business will take on such a role; and what being a development agent means. These are the central questions of this article. Answering them enables business practitioners, policy‐makers and academics to predict more accurately when business engagement is likely to deliver genuine development value and be sustainable, and hence when it is a worthwhile business, advocacy or policy objective. It also enables improved decision‐making by non‐private sector partners such as development agencies and NGOs.Originality/valueThe article addresses the above questions in turn with reference to empirical research by the author over nearly two decades, and both the corporate responsibility and the international development literature. It discusses what being a genuine development agent means, and provides a framework for understanding the business‐poverty relationship based on business as a cause, a victim, and a solution in international development terms. It concludes with a discussion of how well business is performing as a development agent, and the future potential and limitations of this role.