Corrosive & Constructive Capital Initiative
Led by the Center for International Private Enterprise
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Our Mission
To close governance gaps that Corrosive Capital can and often does exploit, so that recipient countries can be more ready to embrace Constructive Capital opportunities and absorb funding with less risk to democracy, institutions, and sovereignty.
Corrosive Capital
Constructive Capital
Definition:
Corrosive Capital is financing, whether state or private, that lacks transparency, accountability, and market orientation.Definition:
Constructive Capital refers to financial flows that are well-governed at the funding source and destination and respond to market voids.Problem:
Originating from authoritarian regimes, Corrosive Capital exploits and exaggerates governance gaps to influence economic, political, and social developments in recipient countries.Indicators:
Transparent terms and entry into the market, accountable to a wide array of local stakeholders in the recipient country, and justification is based on market principlesSolution:
Increase transparency and accountability around investment to neutralize the effects of Corrosive Capital.Benefits:
Benefits of Constructive Capital investments include transparent and documented terms, stakeholder accountability, and more.Corrosive Capital
Definition:
Corrosive Capital is financing, whether state or private, that lacks transparency, accountability, and market orientation.Problem:
Originating from authoritarian regimes, Corrosive Capital exploits and exaggerates governance gaps to influence economic, political, and social developments in recipient countries.Solution:
Increase transparency and accountability around investment to neutralize the effects of Corrosive Capital.Constructive Capital
Definition:
Constructive Capital refers to financial flows that are well-governed at the funding source and destination and respond to market voids.Indicators:
Transparent terms and entry into the market, accountable to a wide array of local stakeholders in the recipient country, and justification is based on market principlesBenefits:
Benefits of Constructive Capital investments include transparent and documented terms, stakeholder accountability, and more.Featured Resources
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The Fate of Globalization in the Post-Coronavirus Era
This article discusses how future globalization and international trade should be based on global participants playing from the same rule book — instead of the West coming to play baseball and the East coming to play cricket.
Corrosive Capital and Serbian Mining
BBC News published this article covering CIPE and the Center for Contemporary Politics’ research into Chinese copper mining investment in eastern Serbia. The analysis found that Chinese company Zijin’s Bor-based copper mining complex was exempted from environmental regulations compliance for an undetermined transition period.
Promoting Resilient Economies in the Western Balkans: Tackling Corrosive Capital at the Sectoral Level
CIPE Partner, the Center for the Study of Democracy (CSD), held an event featuring the launch of a new Corrosive Capital report explaining the application of CSD’s Monitoring Anti-Corruption Policy Implementation methodology and how it can be used to identify potential common patterns of Corrosive Capital in the Western Balkans.
