CSR - Corporate Social (Ir)responsibility?

I have recenttly come across a number of publications/conference/seminars enthusing over the idea of CSR.

Now, I am in favor of any corporate actions that improve social welfare. But I have doubts at the same time whether by focusing on CSR we are not actually losing track of something else.

Specifically, can companies be considered "socially responsible" when they "optimize" taxes, thus reducing tax revenue, undermining productive public spending (roads etc) and--ceteris paribus--increasing tax rates for consumers, who need to pay more because of lower CIT revenue? Just read this shocking NYT's story on General Electric, which despite having earned almost $15 billion dollars in profits in 2010 have not only paid nothing to the US Treasury, but even claimed a $3.2 billion refund! Given the nominal 35% CIT rate in the US, GE should have paid some $5 billion of taxes on its worldwide income. This compares with $160 million that GE spends on CSR per year, that is 3% of the amount that it should have paid in taxes. How socially responsible is this?

And what about companies that may be spending on a lot on CSR but focus their business on selling overpriced products that consumers do not need, often on the basis of misleading information? Let's take Danone, a French food company and one of the global CSR leaders. It produces Actimel and Activia, dairy products with added bacteria, which cost a multiple of a price of regular milk and yoghurt and--against the claims of the company--have no proven impact on health whatsoever? The company recently lost a case in the US and had to pay $21 million in damages (read this and that). How socially responsible is this?


I leave it to you to decide.

The New World Bank EU10 Economic Report

The World Bank has just published its useful and comprehensive "EU10 Regular Economic Report", April 2011, which covers the recent economic developments in the EU-10 area. Worth reading, not only because I have contributed to it, including on the EU 2020 focus note:-)

The new growth model - the Warsaw Consensus!

The DC-based Center for European Policy Analysis has just published my paper on the "Post-Crisis Prospects and a New Growth Model for the EU-10", where I analyze the growth prospects of the EU-10 countries (New Europe), argue that the global crisis has undermined the credibility of the current growth model, and offer a set of policy recommendations for a new growth agenda for the region - the Warsaw Consensus.

This is an important paper for me, particularly as I introduce the concept of the Warsaw Consensus as the strategic growth model for Central Europe.

All comments are warmly welcome!

Lecture at CEPA in Washington DC, April 6, 9am-10.30am

I will deliver a lecture on "Central Europe: New Growth Model Needed?" at the Center for European Policy Analysis (CEPA).

The lecture will be based on my 2009 paper "The Coming Golden Age of New Europe" and the 2011 paper on "Post-crisis Prospects and a New Growth Model for the EU-10" (both published by CEPA).

Books on being wrong

I have just read/am in the process of reading a couple of excellent books on why experts tend to be wrong (they are actually more often wrong than right), why we find so hard to know whenever we make errors, why our memory fails ("it fades over time and is distorted by our beliefs, desires and interests) and why "If being wrong is so natural, why are we all so bad at imagining that our beliefs could be mistaken – and why do we typically react to our errors with surprise, denial, defensiveness and shame?". And "what if I am wrong?"

In addition, you can read some truths about the way our minds really work: "first, we are subject to powerful illusions about how our minds work. Second, these illusions are difficult to shake, even when they are pointed out to us in books like this. Third, technology may hurt more than it helps, since new inventions often tax our mental capacities even further."

Read the helpful reviews below and the books themselves (now available on everyone's laptop, just download Kindle software)

http://www.nytimes.com/2010/07/25/books/review/Gilbert-t.html

http://www.nytimes.com/2010/06/11/books/11book.html?ref=review

http://www.nytimes.com/2010/06/06/books/review/Bloom-t.html

Supervision of SKOKs/credit unions in Poland

In February we launched a World Bank report on "Credit Unions in Poland: Diagnostic and Proposals on Regulation and Supervision", which I have co-authored.

The press release and the full report in English are here

"Doing Business" reforms in Poland

I forgot to write about it before, but in January we finally published the World Bank's "Doing Business Reform Memorandum", whose preparation I have coordinated. The report was completed already in June 2010, but it took some time to publish it.

The main message of the report is that there is scope for substantial improvement in the business climate in Poland by streamlining five key areas measured by the Doing Business Report: starting a business, obtaining construction permits, paying taxes, protecting investors and registering a property.

If the recommended reforms were to be implemented, I am convinced that Poland could become the Top 10 Reformer in the next edition of the Doing Business Report and advance to the first 50 in the global report from 70th place now.