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The Role of Political Divestiture for Sustainable Development

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  • Julia M. Puaschunder

Abstract

In the wake of historical and political events, stakeholder pressure can trigger shareholders to divest from politically incorrect markets with the goal of accomplishing socio-political change. While mainstream development research advocates for more private investor involvement in sustainable development to achieve the Sustainable Development Goals (SDG)s in funding infrastructure, health, education and climate change mitigation; the following paper introduces political divestiture as an alternative means to implement sustainable development. While foreign investment can create positive conditions for improving societal development, also politically incorrect usage of funds or regulatory lacunae can do harm in the developing world. Political divestiture is portrayed as an innovative investment allocation to maximize positive development impacts of investment whilst minimizing associated risks of politically insecure markets. In an attempt to balance risk and access to capital, political divestiture is proposed as a means to implement sustainable development by removing funds from politically incorrect regimes in order to be channeled towards socially responsible and sustainable finance solutions. Future research outlooks on political divestiture as sustainable development driver comprise the antecedents and success factors as well as institutional and international frameworks to foster Financial Social Responsibility in the long-term international development domain.

Suggested Citation

  • Julia M. Puaschunder, 2016. "The Role of Political Divestiture for Sustainable Development," Journal of Management and Sustainability, Canadian Center of Science and Education, vol. 6(1), pages 76-91, March.
    • Handle: RePEc:ibn:jmsjnl:v:6:y:2016:i:1:p:76-91
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    References listed on IDEAS

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    More about this item

    Keywords

    business ethics; financial social responsibility; political divestiture; Socially Responsible Investment (SRI); sustainable development; United Nations;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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