Elizabeth Dávid-Barrett

Collective action initiatives in which governments and companies make anti-corruption commitments have proliferated in recent years.

This apparently prosocial behavior defies the logic of collective action and, given that bribery often goes undetected and unpunished, is not easily explained by principal-agent theory. Club theory suggests that the answer lies in the institutional design of anti-corruption clubs: collective action can work as long as membership has high entry costs, members receive selective benefits, and compliance is adequately policed.

This article contributes to the debate by examining how these conditions manifest in the case of anti-corruption clubs in the realm of international business, with particular focus on the international dimension of many initiatives. This vertical aspect of institutional design creates a richer, more complex set of reputational and material benefits for members, as well as allowing for more credible and consistent monitoring and enforcement.

Transparency in the extractives sector is widely seen as a key tool for improving accountability and deterring corruption. Yet for those very reasons, it is a puzzle that so many governments in corruption-prone countries have voluntarily signed up to greater scrutiny in this area, by joining the Extractive Industries Transparency Initiative (EITI).

We argue that EITI serves as a reputational intermediary, whereby reformers can signal good intentions and international actors can reward achievement. International and domestic actors thus utilize EITI to diffuse the norm of resource transparency and to advance reformist aims in a highly problematic policy area.