IDEAS home Printed from https://ideas.repec.org/h/spr/csrchp/978-3-030-56092-8_32.html
   My bibliography  Save this book chapter

Alaska’s Corporate Social Responsibility: The Economics of the Corruption Case of VECO

In: Sovereign Wealth Funds, Local Content Policies and CSR

Author

Listed:
  • Douglas B. Reynolds

    (University of Alaska Fairbanks)

Abstract

During the early 2000s, Alaska tried to develop its natural gas industry just as natural gas prices in the US market were high, highlighting an interesting case of Corporate Social Responsibility (CSR). In order to develop an Alaskan natural gas industry, then, a two thousand mile, multi-billion dollar pipeline would be needed, and such a pipeline would require a tax contract between the state of Alaska and the Alaskan North Slope oil producers, which would create tough negotiations and a strenuous relationship between Alaska and the international oil companies (IOCs). Usually, governments choose petroleum taxes, regulations, and government support within the petroleum industry based on maximizing social welfare, but not based on maximizing corporate profits. The corporations though needed a certain level of profits in order to be able to invest in a new petroleum development. Therefore, there is a natural incentive for corporations to try to change government policy in order to reduce their risk and assure profitability. However, there is one other factor to consider when trying to get such a gigantic pipeline built and a new natural gas industry started, which are the risks involved. Since investors are taking huge risks to build natural gas infrastructure, then they need favorable taxes to get the job done or they cannot make the investment pay off, and sometimes, they use corrupt means to get a good deal, in which case their Corporate Social Responsibility can be lost. Still, it is not always possible to know the absolute best tax rates or the perfect government terms and conditions that will maximize social value. Therefore, if social welfare includes not just the best terms possible of a tax contract but also whether a project is completed or not, then even if taxes are low, the state could still receive jobs and maximize social welfare compared to not having a new industry at all. Thus, the Alaska VECO corruption case analysis also shows an intricate economic calculation of the expected costs and benefits of the project, after the fact, of how things could have turned out.

Suggested Citation

  • Douglas B. Reynolds, 2021. "Alaska’s Corporate Social Responsibility: The Economics of the Corruption Case of VECO," CSR, Sustainability, Ethics & Governance, in: Eduardo G. Pereira & Rochelle Spencer & Jonathon W. Moses (ed.), Sovereign Wealth Funds, Local Content Policies and CSR, pages 567-578, Springer.
    • Handle: RePEc:spr:csrchp:978-3-030-56092-8_32
    DOI: 10.1007/978-3-030-56092-8_32
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:csrchp:978-3-030-56092-8_32. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.