Corruption and civic space: Contextual factors influencing EITI compliance

Abstract

Market and government failures led to the formation of multi-stakeholder initiatives (MSIs) as an alternative governance structure. The Extractive Industries Transparency Initiative (EITI) is one of these. The impact assessments of EITI yield mixed results. The variation in impact may be attributed to the difference in compliance with the EITI Standard. The authors implemented an ordered logit regression analysis to analyze the relationship between contextual factors and countries’ level of EITI compliance. The authors used the 2013–2015 World Governance Indicators (WGIs) to represent the state of governance in member countries. The EITI International Secretariat’s quarterly assessment of countries’ compliance with the EITI safeguard requirements was used as a proxy for EITI compliance. The authors found statistically significant positive relationship between perception of political freedom and compliance with the safeguard requirements. This finding supports the importance of civic space in making MSIs effective. The authors also found that states that are perceived to be more corrupt, ineffective and has weak rule of law are more likely to comply with the EITI requirements. The findings on freedom and corruption are consistent across models. Countries maybe complying with EITI to improve their reputation and benefit from incentives a compliance status in EITI bring.