The Corrosive & Constructive Capital Initiative’s mission is to promote accountability, transparency, and resilient markets to generate economic growth and greater opportunity.
Building Better Markets: Corrosive vs Constructive Capital
Foreign investment in emerging economies can lead to opportunity, growth, and efforts to strengthen democracy. Foreign capital can also be used to undermine democracy and widen corruption in recipient countries, an alarming trend with deals involving authoritarian regimes where state and private investments are often intertwined. To identify and mitigate potential threats, the Center for International Private Enterprise (CIPE) created two labels: Corrosive Capital deals are typically secretive and undermine regulation. They subvert the interests of citizens and limit opportunities to enter the market, ultimately making recipient countries more vulnerable to economic and political manipulation. Constructive Capital investments are market-oriented, have clear terms, and are accountable to stakeholders.
CIPE and its partners in dozens of countries are mapping foreign investment activities to identify key characteristics (below) and implement programs that increase global awareness, strengthen democratic institutions, safeguard citizens’ interests, and ensure a fair playing field for all businesses.