Self-Regulation in Weak Institutional Environments: The Extractive Industries Transparency Initiative, Corruption, and Growth in Resource-Rich African Communities

71 Pages Posted: 17 Apr 2025 Last revised: 4 May 2025

See all articles by Shirley Tang

Shirley Tang

Bocconi University - Department of Management and Technology

Daniel W. Elfenbein

Washington University in St. Louis - John M. Olin Business School

Tatenda Pasipanodya

Washington University in St. Louis - John M. Olin Business School

Date Written: April 15, 2025

Abstract

Can voluntary self-regulatory institutions address corruption in weak institutional environments? Prevailing wisdom suggests that absent rigorous enforcement, such initiatives may merely generate symbolic gestures. We revisit this conclusion by examining the Extractive Industries Transparency Initiative (EITI)—a multi-stakeholder effort designed to deter corruption in resource-rich countries. Linking annual firm-level EITI membership with Afrobarometer survey data and satellite-based measures of local economic activity, we find lower perceptions of corruption, greater civic engagement, and increased economic development near the oil and gas operations of firms after they become EITI members. We argue that, in these weak institutional environments, external pressure from civil society and global NGOs can partly substitute for formal legal enforcement, inducing genuine adherence to self-imposed transparency standards, which in turn, meaningfully improve governance and development outcomes.

Keywords: Extractive industries, Transparency, Voluntary Disclosure, Corruption, Africa, Self-regulation, Mutli-stakeholder initiative

Suggested Citation

Tang, Shirley and Elfenbein, Daniel W. and Pasipanodya, Tatenda, Self-Regulation in Weak Institutional Environments: The Extractive Industries Transparency Initiative, Corruption, and Growth in Resource-Rich African Communities

(April 15, 2025). Bocconi University Management Research Paper, Available at SSRN: https://ssrn.com/abstract=4742433 or http://dx.doi.org/10.2139/ssrn.4742433

Shirley Tang (Contact Author)

Bocconi University - Department of Management and Technology ( email )

Via Roentgen 1
Milan, MI 20136
Italy

Daniel W. Elfenbein

Washington University in St. Louis - John M. Olin Business School ( email )

One Brookings Drive
Campus Box 1156
St. Louis, MO 63130-4899
United States

HOME PAGE: http://www.elfenbein.net

Tatenda Pasipanodya

Washington University in St. Louis - John M. Olin Business School ( email )

St. Louis, MO
United States

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