Articles

MHCi MONTHLY FEATURE

September 2008

NATIONAL SOCIAL RESPONSIBILITY (NSR) AND NATION STATES

By Jawahir Adam-Hopkins and Michael Hopkins

A. Introduction to National Social Responsibility

Much has been written about Corporate Social Responsibility (CSR) but little of that discussion and lessons learned has been applied to the social responsibility of Nation States.This Monthly Feature explores the concept of National Social Responsibility (NSR).The obvious difference between CSR and NSR is that CSR is about treating the stakeholders of a corporation in an ethical and socially responsible manner while NSR is about treating the stakeholders of a nation in an ethical and socially responsible manner.

Turning the tools of CSR to nation states shows that, purchase depressingly many, pharm if not most, countries lack social responsibility. The key stakeholders of any Nation State are their citizens and their trading partners.Consequently, NSR can bedefined as:

A State that treats its citizens fairly,looks after their well-being, and is respectful to foreigners – immigrants aswell as their trading partners.

We at MHC International Ltd (MHCi) have developed an index of NSR and show below the position of some countries, including the top seven, in the table.

National Social Responsibility Index (NSRI)

 

Country

Rank

Country

NSRI

1

Sweden

1

2

Iceland

0.98

3

Denmark

0.98

4

Finland

0.96

5

Netherlands

0.96

6

New Zealand

0.96

7

Switzerland

0.95

14

United Kingdom

0.88

21

USA

0.83

81

South Africa

0.54

119

Russia

0.43

179

Zimbabwe

0.11

180

Somalia

0.07

Source: MHCi where a NSRi score of one is excellent and zero very poor. For more details see the pdf national social responsibility index

The MHCi NSR Index is composed of whether the State treats its citizens:

  1. Fairly
  2. Looks after their well-being
  3. Without corruption.

To measure these three aspects we have used measures of the freedom of the country, life expectancy at birth and transparency.The first uses the Economist Intelligence Unit’s 2007 Democracy Indexwhich, in turn, is based upon five categories: electoral process and pluralism; civil liberties; the functioning of government; political participation; and political culture.The second, life expectancy at birth, which is the best measure of the level of living, on average, of a nation’s well-being and is drawn from the 2007 UNDP Human Development Report[1]. The third indicator is the nation’s transparency and uses Transparency International’s Corruption Perception Index.

Using these data and creating an index from zero to one, where zero means absolutely no social responsibility and one means excellent social responsibility we can see that Sweden tops the list followed by Iceland and Denmark. The bastions of democracy came further down the list than one might expect with the UK at 14 - its civil liberties have been hard hit in recent years because of its intrusive behaviour as a response to terrorism as has the USA with a position at Number 21.

The rising economic powerhouses, the BRIC group of countries (Brazil, Russia, India and China), came 53rd, 119th,73rd, and 108th respectively. According to The Economist, although almost half of the world’s countries can be considered to be democracies, infact the number of “full democracies” is relatively low (only 28). Almost twice as many (54) are rated as “flawed democracies”.Of the remaining 85 states, 55 are authoritarian and 30 are considered to be “hybrid regimes”. As could be expected, the developed OECD countries (with the notable exception of Italy) dominate the top of the NSR index while the lower regions are composed, unsurprisingly, of the poorer nations.  Only one Asian country, Japan, makes the grade.

B. Can lessons be learned from the CSR movement?

Can, therefore, countries that have neglected or departed from being nationally responsible learn anything from the CSR movement?Treating the stakeholders of corporation responsibly is obvious if a corporation wishes to succeed, although we have seen many failures– Enron, WorldCom, Parmalat to name but a few who have become anti-models of how not to carry out CSR.

At the national level one would think that a government would like to treat its people responsibly, morally and fairly.But, for so many, this has not been the case.In fact many of these countries have turned into fragile or failed states and this has led to mass outflows of migrants (more frequently known as refugees or IDP's) and is the main focus of the remainder of this article.

C. Failed States

According to Wikipedia, “a failed state is a state whose central government is so weak or ineffective that it has little practical control overmuch of its territory. The level of control required to avoid being considered a failed state varies considerably amongst authorities”.  A failed state is also one that can no longer perform its national security to protect its society or control its territory.

Some of the reasons why states fail are:

    1. The existence of massive corruption.  For example, when government officials use their governmental powers for illegitimate private gain and abuse of government authority.   Examples are many: Nigeria,  Myanmar, and Zimbabwe.
    2. The presence of armed warlords who directly challenge the State authority. This has led, for instance, to the destruction of the State of Somalia and the ensuing conflict of 18years.
    3. Breakdown of law and judicial ineffectiveness e.g. Pakistan in 2007.
    4. Divisions along clan, tribal lines and ethnical tensions for example the clashes and election violence in Kenya in late 2007 through early 2008.
    5. Violation of human rightsand where a dictatorial or military rule suspends or manipulates constitutional and democratic institutions e.g. Indonesia in East Timor, Sudan in Darfur and Zimbabwe.

D.  Signs of success

Post conflict countries that emerge from fragility rarely experience peace, security, economic and social development for many decades after the tyranny.  There are, happily, exceptions.  In Africa, three countries seem to be on a hopeful path are Mozambique, Liberia and Rwanda and lessons can be drawn from them.  These three countries, helped by the international community, focused on treating the stakeholders of the peace process in an ethical and responsible manner. The hallmarks of success might, therefore, well be those countries who have adopted national social responsibility.

Can, therefore, some lessons be applied in some of the most difficult situations currently facing the international community?  Clearly these are complex issues and cannot be treated in great depth in this short article but, perhaps, it will stimulate different approaches to the treatment of a Nation’s stakeholders than the generally pathetic attempts to date.

E. Failed and Fragile States

Many countries can be categorized as failed or fragile since the key stakeholders are neither treated responsibly nor behave responsibly.  Here we focus on the last two in our NSR Index: Zimbabwe and Somalia.

Zimbabwe

In Zimbabwe, Mugabe has ruled his country with an iron fist for 28 years and has become evermore dictatorial, and seemingly less and less interested in the welfare of his people, treating Zimbabwe's wealth and resources solely for the use of his inner circle.  In recent years he has unleashed reign of terror and corruption in his country [2].  More than a million people have been displaced; inflation is so high it can hardly be measured; 80% of adults are unemployed and tens of thousands face famine and starvation each year.  Additionally, the rule of law has been replaced by the arbitrary and brutal rule of the government, freedoms have been curtailed, the economic opportunities of the Zimbabwean people have been wasted, and their common heritage has once again been monopolized by a privileged minority.  The roots of this catastrophe lie in the actions taken by the key stakeholders: President Mugabe, his inner circle within the ruling party (ZANU-PF); foreign governments such as South Africa, led by the ineffectual Mbeki.

Somalia

One country in Africa that is categorized as a “failed” state is Somalia.  This is due to the lack of functioning government and a continuous political, social and humanitarian crisis for the last 18 years.  Its key stakeholders are: the Transitional Federal Government (TFG); the clan leaders; the opposition movements such as Al-Shabab (The Youth) and the Islamic insurgents; nations such as Ethiopia which support the TFG; and the United States which was instrumental in the invasion of the Ethiopian troops in Somalia in 2006.  Other key stakeholders include the United Nations, the Organization of African Union, the breakaway State of Somaliland, NGOs and the media.

Since the overthrow of the democratically elected government on 21 October 1969 by a military coup led by Siyad Barre, there has never been a genuine leadership that has behaved in a responsible and ethical manner: Siyad Barre’s regime was destroyed by greed, corruption, irresponsible clan leaders and the desire for power.  Since then Somalia has been controlled by warlords who fought for power along clan lines.  The TFG that was thought to bring peace and stability is now blamed for the killing and maiming of their own people and has authorized Ethiopian soldiers to kill and humiliate the Somali people.  The UN confirms the displacement of one and half million people and the exodus of thousands of refugees to neighbouring countries. 

Lessons from the peaceful and democratic self-declared independent state of Somaliland, where the stakeholders have behaved responsibly over 18 years, have been ignored.  Thus there is a crucial need for NSR leadership.  The African Union has miserably failed in acting responsibly to resolve the crises in Somalia and Zimbabwe.  The dramatic failure of SADC leaders to broker a deal between Robert Mugabe and Morgan Tsvangirai also shows lack of responsibility on the African continent.  Only Botswana and Zambia seem to be coming out of this well (ranked a lowly90 and 160th respectively on the MHCi NSR Index).

F. Concluding Remarks

There is a need for the intervention of the international community particularly the development actors in the fragile states before they descend into fragile or failed states category.  This would mean an intervention where the behaviour of the government authorities is evaluated to see if they are behaving in a socially responsible way towards their stakeholders – the nation.  CSR tools are becoming successful so now is the time to apply some of these lessons to countries.

What main elements could be included in anew, nationally social responsible approach?

At least three are key:

1. Decide on a clear values statement on where the country concerned wishes to be ten years from now.

2. Identify the key stakeholders and carryout a stakeholder dialogue to assess the views of all key players.

3. Resolve conflicts and disagreements through continuing dialogue with key stakeholders that are led by prominent international figures who command international respect.

[Thanks to comments on an earlier version by Ivor Hopkins of MHCi, Prof. John Lawrence of Columbia University, Prof. Emilio Kleinformer ILO and University of Chile and Peter Moss]


[1] As Prof. John Lawrence of Columbia University pointed out our NSR Index goes beyond the HDI since, for instance, the HDI says nothing about  corruption or intrusiveness in people's rights' spectra...and the NSRI approach has a lot of face validity i.e. the results accord with knowledgeable perceptions (personal communication, Aug 26 2008)

[2] The latest election on 29 March ’08 was typical.  Mugabe not only rigged the elections but cracked down on his opponents and refused to give up power.  This led to the international condemnation of the election results, which followed widespread accusations of ballot irregularities and violence by the ruling Zanu-PF party.