ABSTRACT

The role of multinational corporations (MNCs) in fostering socio-economic development in developing countries has been the subject of considerable debate by civil society organizations, academics and practitioners. It has been argued that, by working closely with host governments, MNCs have a role to play in alleviating poverty and stimulating economic development particularly in poverty stricken developing countries. This requires a strong commitment on the part of both corporations and host governments. However, in the context of the contemporary global economy, the ability of governments in developing countries to demand accountability, responsibility and transparency from modern corporations has remained questionable. This is in part due to the fact that governments in developing countries are desperate to attract foreign investment in order to deal with the various socio-economic problems including and in particular, poverty. Thus, a tension exists between encouraging foreign investment and issues associated with promoting socio-economic order. This chapter adopts a political economy perspective to considering how neo-liberal ideologies adopted in the global capitalist economy have been manifested within institutional structures as well as in CSR practices and to show how this has serious implications for the socio-economic development of many developing countries, such as is the case in Tanzania. It is argued here that any attempt to change CSR practices and their potential to promote socio-economic development in Tanzania need to be accompanied by changes in the governance structures at both domestic and global levels.