Corruption and civic space: Contextual factors influencing EITI compliance

The article can be downloaded here: http://www.sciencedirect.com/science/article/pii/S2214790X16301332 

Abstract:

Market and government failures led to the formation of multi-stakeholder initiatives (MSIs) as an alternative governance structure. The Extractive Industries Transparency Initiative (EITI) is one of these. The impact assessments of EITI yield mixed results. The variation in impact may be attributed to the difference in compliance with the EITI Standard. The authors implemented an ordered logit regression analysis to analyze the relationship between contextual factors and countries’ level of EITI compliance. The authors used the 2013–2015 World Governance Indicators (WGIs) to represent the state of governance in member countries. The EITI International Secretariat’s quarterly assessment of countries’ compliance with the EITI safeguard requirements was used as a proxy for EITI compliance. The authors found statistically significant positive relationship between perception of political freedom and compliance with the safeguard requirements. This finding supports the importance of civic space in making MSIs effective. The authors also found that states that are perceived to be more corrupt, ineffective and has weak rule of law are more likely to comply with the EITI requirements. The findings on freedom and corruption are consistent across models. Countries maybe complying with EITI to improve their reputation and benefit from incentives a compliance status in EITI bring.

Highlights:

• The perception of greater political freedom and stronger civic space increases the likelihood of compliance with the EITI requirements.
• An increase in the perception of corruption increases the likelihood that a country will comply with the EITI requirements.
• An increase in the perception of government ineffectiveness increases the likelihood that a country will comply with the EITI requirements.
• An increase in the perception of the rule of law decreases the likelihood that a country will comply with the EITI requirements.
• The effect of perception of corruption, government ineffectiveness and weak rule of law are instantaneous.
• The effect of political freedom and civic space on EITI compliance is consistent even with the use of alternative indicators.