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416 Globalization is bringing new actors to the fore: civil society organizations (CSOs) and the private sector take on an increasing role in shaping global governance together with the public sector. Governance traditionally has been associated with the institutions of the state. However, in a globalized economy, this concept is out of sync with reality. Political and economic problems such as corruption are increasingly affecting more than one state. Solutions can no longer be sought solely on the national level and only by state actors. As traditional governing institutions are losing influence, a governance void arises. However, this chapter argues that CSOs are filling this gap and developing into a true “third sector,” complementing state and commercial actors.A greater number of voluntary civic and social organizations are playing an important role where traditional actors are failing to cope effectively. An active civil society is vital to address corruption and other challenges to global governance that exist in 2009. Civil society cannot replace the traditional governance institutions; state governments still have the democratic legitimacy to govern their countries. Private sector enterprises, particularly multi-national corporations also have become acknowledged actors in global governance. For many years, such entities have played an important role in shaping global markets. They have devised global strategies and created global assets and liabilities. The private sector has assumed a great responsibility in shaping and maintaining global governance. The role of these two traditional actors remains important and cannot be underestimated. However, both 16 A Coalition to Combat Corruption: TI, EITI, and Civil Society peter eigen The author thanks Tim Bittiger for his thoughtful editorial support in bringing various publications together for this chapter. 16 0328-0 ch16.qxd 7/15/09 3:53 PM Page 416 actors should be supported and complemented by CSOs, at the local, national, and global levels. A powerful civil society can be the key element to regain the primacy of politics over the market, to rebuild the human capacity that is needed to shape the global economy into what in Germany is known as Soziale Marktwirtschaft —a market that serves the people, rather than a society that has to obey the“invisible hands”of the market. The world’s societies can only thrive if its people, through civic activity and its representative bodies, are involved in shaping globalization; in building better global governance. The Plague of Corruption The failures of governance manifest themselves in many ways, but corruption is likely one of the challenges with which the public and private sectors have the most difficulties, especially when each sector is working on its own.At the same time, corruption is a case that illustrates how a new triangular alliance of governments, companies, and CSOs can successfully join forces to address corruption’s root causes. Bribery and corruption are increasingly recognized as major scourges of society.The scale of the devastating effects that corruption inflicts on the world is immense. The World Bank Institute estimates that $1 trillion a year are paid in bribes around the world.1 However, the damage goes beyond these figures: corruption leads to a perversion of economic decision-making.It distorts competitive markets, leads to the misallocation of resources, and ruins the investment climate. PricewaterhouseCoopers estimates that the Russian Federation alone loses $10 billion a year in potential foreign direct investments. Corruption also diverts public expenditures away from social sectors, such as education and health, and it is one of the main reasons for the poverty that the world is facing in the twenty-first century. In this century, with the world’s immense possibilities and opportunities dramatically to reduce poverty, it is unacceptable that more than 1 billion people still live under the absolute poverty line. In 2007 alone, 11 million children died before they reached the age of five of easily curable illnesses caused by poverty. Corruption likewise violates human rights and exacerbates discrimination against those who are unable to claim their fair share of the world’s resources. Former United Nations (UN) High Commissioner for Human Rights Mary Robinson proclaimed that corruption was a “crime against humanity.”2 Corruption and an unfair distribution of wealth are among the root causes of the conflicts that are ravaging large parts of the world, producing large-scale A Coalition to Combat Corruption 417 16 0328-0 ch16.qxd 7/15/09 3:53 PM Page 417 destruction and deaths; as of early 2009 such cases include the Democratic Republic of the Congo, the Sudan, Chad, and...


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