Women’s Economic

Empowerment and
Corrosive Capital
The Center for Women’s Economic Empowerment (CWEE) at

CIPE advances gender equality in emerging markets to build more

inclusive, thriving economies and democracies that deliver for all

citizens. This two-page briefer outlines how CIPE approaches the

intersection of women’s economic empowerment (WEE) and

constructive/corrosive capital. This briefer lists some examples

of CIPE programming and presents areas of interest for future

research, project and policy exploration.

Constructive and corrosive capital describe how investments,

including foreign direct investment, enter countries and comply,

or fail to comply, with clear, accountable market structures and

regulations. This in turn affects how women and other minority

groups can participate in the open economy.

Constructive Capital Corrosive Capital

Investments that are market-oriented Investments that are completed in secret, enter the country via
opaque legal structures and often come from authoritarian regimes

Accountable to stakeholders Does not engage local stakeholders

Complies with local regulations, including environmental and social Does not comply with local regulations and goes forward without
compliance that compliance

Has clear market justification and clear rules of engagement and fair Lacks market justification, rules of engagement are unclear so it is
policies that allow for universal participation hard for average businesses to participate in procurement or busi-
ness processes

Leads to greater participation of women and minority groups and Begets more corrosive capital, crowds out participation by women
promotes human rights and minority groups and disregards human rights

More inclusive by nature or through regulation More exclusive by nature with little to no regard for regulation

Promotes healthy open, business competition Stifles competition through closed deals and favoritism
Why Corrosive Capital and CIPE Supports US Government Policy to
Constructive Capital Matter for Promote Constructive Capital
Women’s Economic Empowerment
The US Government has made public statements about its
Around the globe women-owned businesses and women concerns on tactics coming from authoritarian regimes to
entrepreneurs disproportionally represent small- and medium gain domestic and international control using subversive
enterprises (SMEs) that face greater challenges for business
techniques and injecting corrosive capital investments. The
opportunities, growth, competitiveness and access to markets
National Security Council has made public statements on a top
and capital. When countries value and promote constructive
administration priority to, “rally our allies to combat corruption
capital investments, regulations, accessible information and clear
and kleptocracy, and to hold systems of authoritarian
engagement principles foster the participation of SMEs, including
capitalism accountable for greater transparency and
in public procurement bids and processes. Research demonstrates
participation in a rules-based system.”3 The US Government’s
that increasing procurement transparency and employing
promotion of accountable investment through constructive
e-procurement processes not only reduce processing times and

opportunities for corruption, but also make it easier for women capital, transparency and accountability is not only vital to

and minority-owned businesses to participate in those processes. democracy, but also to fostering open economies, diversity

and the participation of women and minority groups in the

Furthermore, investments from companies that have higher
private sector and civil society organizations.
accountability to stakeholders generally hire more women.

Research has shown that companies that have more diverse

leadership teams and boardrooms perform better.1 Specifically,

1 Diversity wins: How inclusion matters | McKinsey
research has shown that foreign investment firms from countries
2 https://blogs.worldbank.org/psd/why-do-foreign-investors-attitudes-
with more equal culture, as measured by their score on the toward-women-matter

UNDP Gender Inequality Index (GII), tend to hire more women 3 The inexorable rise of Jake Sullivan - POLITICO

and have more women managers.2 Companies that care about

Environmental, Social and Governance (ESG) criteria and Corporate

Social Responsibility (CSR) are more likely to focus on issues,

such as gender equality and preventing sexual harassment in the

workplace. They are also more likely to uphold rule of law, comply

with local regulations and invest in and promote constructive

capital and the systems that support it. Constructive capital allows

women the space to lead in companies and organizations.

As companies and countries work to recover from the negative

health, social and economic impacts of the COVID-19 pandemic,

they must also find ways to include women and other minority

groups, support local business growth and promote access to new

markets. Women, in turn, must continue to insist that their voices

be heard and must participate in transparency and accountability

initiatives during this recovery in a concerted effort to offset the

exacerbated negative consequences of the pandemic. Women

must be part of the dialogue processes that promote constructive

capital as part of response efforts.

CENTER FOR INTERNATIONAL PRIVATE ENTERPRISE ∞ 1211 Connecticut Avenue, NW Suite 700 I Washington, D.C. 20036
 cwee.cipe.org ∞  @cipewomen ∞  @CIPEDC ∞  CWEE@cipe.org ∞  (202) 721-9200
JUNE 2021