Abstract
This paper explores how revenue flows from the extractive sector can have substantial multiplier effects on the rest of the economy in resource-endowed countries in the Global South. The aim is to demonstrate that in order to fully benefit from extraction practices, countries in the Global South must adopt measures to address issues such as weak governance, the exploitative practices of foreign investors, mismanagement, corruption, undervaluation of mineral assets, revenue mismanagement, and various forms of taxation manipulation and evasion. Through literature examples in various African countries, this research concludes that the Global South should focus on constructing national regulatory frameworks that emphasise revenue transparency.
Highlights
The Global South — the developing regions of Africa, Asia and Latin America — is richly endowed with mineral assets that are essential for modern production and consumption worldwide
Most corporate social responsibility (CSR) programming has tended to focus on micro-level issues such as compensation to specific communities, rather than macro-level effects like political corruption and distortions to the national economy induced by reliance on extractive resource revenues
A Policy Agenda for Improving Accountability and Sustainable Development In case after case, the inability to properly and transparently account for resource revenues in developing countries has opened the door to corruption, rent-seeking, and under-investment in the domestic economy
Summary
The Global South — the developing regions of Africa, Asia and Latin America — is richly endowed with mineral assets that are essential for modern production and consumption worldwide. Drawing on illustrative cases and a number of recent studies, a balanced approach between government (regulations) and industry (CSR) is recommended to improve accountability and development outcomes in the extractive sector.
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