Workshop on International Law, Natural Resources and Sustainable
Development
EITI: How a Transnational Public-Private Partnership was Designed to Improve Domestic
Governance in Resource-Rich Developing Countries
Patricia Galvão Ferreira
Centre for Latin American Studies, Stanford University
According to the “resource curse” literature many resource-rich but poor developing
countries that are currently experiencing a resource boom will likely end up with worse
development outcomes than their resource-deprived peers in the long run. There is broad
consensus on the main explanation for this conundrum: a deficit in domestic governance
systems allows rent-seeking behaviour to thrive. Yet, promoting governance reform in
resource-rich developing countries through development assistance has proved an
intractable enterprise, leading actors concerned with the resource curse to look for
regulatory alternatives. This paper argues that the Extractive Industries Transparency
Initiative (EITI), created in 2002, is one example of innovative regulatory alternative aimed
at improving the chances of successful governance reform at the local level.
The paper examines how against all odds a group of civil society organizations, transnational
corporations, western developed countries and resource-rich developing countries found
common ground to create a transnational public-private partnership with the primary
objective to facilitate governance reforms to the domestic extractive sectors in resourcerich developing countries. It argues that EITI’s design seeks to overcome the shortcomings
associated with conventional global initiatives to influence domestic governance reform in
at least four different ways. First, it tries to increase the ownership (and legitimacy) of a
global initiative among resource-rich developing countries. Second, it relies on a multistakeholder model that uses the leverage of different public and private actors in the
national and international levels to explore opportunities to press for or reinforce reforms in
domestic systems. Third, it promotes greater access to information on revenues flowing into
government coffers to increase pressure for accountability by citizens in host countries, thus
facilitating further governance reforms. Fourth, it requires the active participation of civil
society organizations and industry players in the implementation of the initiative at the
national level, to directly improve the quality and effectiveness of governance and
accountability mechanisms. The article draws from existing literature on EITI and similar
initiatives to lay out some inductive hypotheses as to how the actual implementation of EITI
is happening, as compared to the assumptions that informed the strategy of its original
proponents.