Individual and Corporate Social Responsibility

Abstract

economica (2010) 77, 1–19 doi:10.1111/j.1468-0335.2009.00843.x individual and corporate social responsibility by roland be´ nabouw and jean tirolez wprinceton university ztoulouse school of economics final version received 6 november 2009. society’s demands for individual and corporate social responsibility as alternative responses to market and distributive failures are becoming increasingly prominent. we draw on recent developments in the psychology and economics of prosocial behaviour to shed light on this trend and the underlying mix of motivations. we then link individual concerns to corporate social responsibility, contrasting three possible understandings of the term: firms’ adoption of a more long-term perspective, the delegated exercise of prosocial behaviour on behalf of stakeholders, and insider-initiated corporate philanthropy. we discuss the benefits, costs and limits of socially responsible behaviour as a means to further societal goals. introduction economists’ view of how society should be organized has traditionally rested on two pillars. the invisible hand of the market, described in adam smith, harnesses consumers’ and corporations’ pursuit of self-interest to the pursuit of efficiency. the state corrects market failures whenever externalities stand in the way of efficiency, and redistributes income and wealth, as the income and wealth distribution generated by markets has no reason to fit society’s moral standards. in industrialized democracies, much of the …

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