A prominent feature of certain policy regimes conducive to inclusive development has been social pacts or compromises in which organized business interests supported, accommodated, or at least did not overtly resist, government policies associated with universal social protection, corporate social welfare, progressive labour market policies, and macroeconomic policies favourable to both economic growth and broad-based private sector development (Mkandawire 2004). With globalization and neoliberalism, traditional social pacts in many countries have unravelled and the ideology and policies promoted by some business associations have supported policies that have problematic effects from the perspective of social protection, equality and small enterprise development. Such policies have been associated with labour market flexibilization, the shift from progressive to regressive fiscal regimes, the weakening of universalist social protection, the privatization of public services, and certain patterns of FDI and trade liberalization.
A more profound questioning of the current policy environment is currently taking place within the international development community. Even within mainstream policy circles, calls for far more resources for poverty reduction, redistribution, local development, counter-cyclical policies, a rethinking of privatization policies, corporate accountability and greater support for SMEs. The private sector – in particular transnational corporations and business associations – are increasingly being called on to engage with these processes of policy and institutional reform.
Research on the nexus between organized business and policy suffers from a number of limitations. It often generalizes about the positive or negative developmental impacts of business associations and fails to differentiate the policy positions of organized business. Much of the research on the role of business associations in developing countries has focused on their implications for growth and democracy, with less attention paid to social and labour market policy, or to the social implications of macro-economic policies promoted by business associations. The current discourse on the role of organized business interests in embedded liberalism and good governance, which suggests a positive role for business associations, tends to ignore the complex dynamics of the business-state nexus.
This project will address two main issues.
First, in a context where the international development community is calling on the private sector to support pro-poor growth and socially-responsible enterprise, what role are business associations playing in this process and why?
Second, under what conditions might social pacts conducive to inclusive development and social policy re-emerge or strengthen?
To examine the role of business associations in supporting or undermining policy regimes conducive to inclusive development, United Nations Research Institute for Social Development (UNRISD) will commission a set of research papers that looks at how business organizations interact with the policy process.
Research results have been published in the following two volumes:
- Marques, José Carlos and Utting, Peter (eds).2010. Business, Politics and Public Policy: Implications for Inclusive Development. Palagrave Macmillan: Basingstoke.
- Utting, Peter. and J.C. Marques (ed).2010. Corporate Social Responsibility and Regulatory Governance: Towards Inclusive Development?, Palagrave Macmillan: Basingstoke.