Reflections on foreign direct investment and development with reference to non-governmental organisations and corporate social responsibility

It is clear that the process of 'globalisation' has presented acute economic challenges to developing countries. Great importance has been accorded to FDI as a driver of development thereby leading to the further empowerment of TNCs. Competition for FDI prevents host governments from implementing tough regulatory measures. In their stead have stepped in NGOs whose lobbying has had an appreciable impact on TNC activities and strongly contributed to the rise of corporate social responsibility (CSR). The paper posits the concept of an 'efficiency CSR hypothesis'. Though CSR is a positive outcome, it does not detract from the profound problems of development for the weakest developing countries via the route of inducing FDI in a globalised economic environment. Contrary to expectations, the increasing interdependence in the world economy presents formidable challenges to development and poverty alleviation for such economies.