Pakistan Institute of Development Economics



Instinctive Behaviour, Producer Surplus, and Corporate Social Responsibility

In a broader sense, CSR became an issue mainly in the recent years. The evolution of this phenomenon is largely to be credited to the neoliberalist era that began in the last quarter of the 20th century and continues to dominate the new millennium. Not surprisingly, the conceptual and operational definitions of CSR are subject to as many controversies and disappointments as is the outcome of neoliberalist economics manifested in looming threats to social, economic and environmental sustainability. The scope of this study is, however, only limited to addressing the issue of CSR. The analysis is carried out by adopting an inductive approach while probing into both interconnected aspects and disconnected separate currents of the phenomenon. The interconnectivity of CSR relates the capitalist paradigm with the individual/collective human behaviour. The disconnection on the other hand refers to specific real world issues with local and global contexts involving simultaneous but unequal capitalist development in the North and the South. The paper is divided into three parts. Part 1 reflects on the relationship between instinctive and ethical behaviour of the entrepreneurs. The former is driven by the motivational force of self-interest exhibited in efforts to accumulate producer surplus, while the latter demands social responsibility under the influence of intrinsic and/or extrinsic regulations. Part II presents a brief review of the literature on CSR, largely relating to the corporate sector in the North. Finally, Part III of the paper analyses the literature on CSR in the developing countries and highlights its recent origins in a world where Technical Barriers to Trade (TBTs) are increasingly underscoring the North-South divide in gains from economic globalisation.

Naheed Zia Khan