Does Corporate Social Responsibility Contribute to Human Development in Developing Countries? Evidence from Nigeria

Abstract

Oil companies have been facing criticism linked to their activities in developing countries from various human rights organizations as well as non-governmental organizations and the media. To change this negative perception, companies have been increasingly promoting corporate social responsibility (CSR) initiatives, which aim at improving living conditions of local communities in oil exploitation areas. In this paper, we explore the impact on the well-being of communities of two kinds of CSR initiatives implemented in two areas of the Niger Delta region of Nigeria. Using multidimensional exploratory methods and checking for robustness using binary logistic regression, we investigate the outcome of CSR initiatives on individuals' empowerment, community participation, and access to basic capabilities such as education, health, shelter, electricity, water and sanitation. Our results show that there is a limited benefit in terms of human development for the population. However, the impact differs according to the strategy of implementation: ‘top-down’ non-participatory approaches to CSR extend the access to basic capabilities for some privileged socio-economic groups, while ‘bottom-up’ participatory approaches positively impact collective capabilities of the whole community, but these more recent initiatives have, to date, little effect on the expansion of basic capabilities.

Keywords:

• Capabilities
• Capability approach
• Human development
• Measurement
• Inequality
• Well-being
• Nigeria

Additional information

Notes on contributors

Kevin Lompo

Kevin Lompo is a PhD candidate in economics at the CEMOTEV University of Versailles, France

Jean-Francois Trani

Jean-Francois Trani is Assistant Professor at the Brown School of Social Work, Washington University, St Louis, USA; and Honorary Senior Research Fellow at the Leonard Cheshire Disability and Inclusive Development Centre, Department of Epidemiology and Public Health, University College London, UK