Master’s Thesis 2020 30 ECTS Faculty of Landscape and Society The Power of Consulting: The Big Four in Angola, Tanzania and South Africa Irgen Wiig Sørensen Global Development Studies The Department of International Environment and Development Studies, Noragric, is the international gateway for the Norwegian University of Life Sciences (NMBU). Established in 1986, Noragric’s contribution to international development lies in the interface between research, education (Bachelor, Master and PhD programmes) and assignments. The Noragric Master theses are the final theses submitted by students in order to fulfil the requirements under the Noragric Master programme “International Environmental Studies”, “International Development Studies” and “International Relations”. The findings in this thesis do not necessarily reflect the views of Noragric. Extracts from this publication may only be reproduced after prior consultation with the author and on condition that the source is indicated. For rights of reproduction or translation contact Noragric. © Irgen Wiig Sørensen - June 2020 E-mail: [email protected] Noragric - Department of International Environment and Development Studies P.O. Box 5003, N-1432 Ås, Norway Tel.: +47 67 23 00 00 https://www.nmbu.no/fakultet/landsam/institutt/noragric Declaration I, Irgen Wiig Sørensen, declare that this thesis is a result of my research investigations and findings. Sources of information other than my own have been acknowledged and a reference list has been appended. This work has not been previously submitted to any other university for award of any type of academic degree. Signature ...................................... Date…………………………….. II Acknowledgements First of all, I would like to thank my wife Berit, who has supported me through all the ups and downs and who has contributed with continuous good feedback. Secondly, I would like to thank my study group consisting of Jonas and Grant, who have through the whole journey of the master programme shown great support. I would further like to thank my supervisor at NMBU, Morten Jerven for the feedback and support during my research. During this research project, I have also gotten feedback and support from Ingrid Hjertaker in “Tax Justice Network Norway”, who I would also like to share my gratitude with. And last but not the least, thank you to everyone else who has contributed to this research with all their knowledge, expertise and critical questions. This has helped enormously, and I am very grateful for the time you have spent on sharing your thoughts and reflections on my research! Thank you! III Abstract Though the Big Four have been identified in their involvement in reported and leaked data regarding lobbying, tax evasion and misconduct in the western world, the capacity and underlaying interests of the Big Four in development countries have received little focus in executed research. Thereby, while acknowledging the need for further studies on the Big Four, conducting a multiple case study has allowed for the observation of the Big Four in different contexts, and by doing so, improved the understanding of how the operations of these firms affect the development capacities of Angola, Tanzania and South Africa. The thesis has shed light on the ongoing capacity of the Big Four as a result of their global network, size and expertise in their field, which enables the Big Four to operate on a scale much larger than any other accounting and auditing companies in the world. The global network of the Big Four further enables their national entities to gain hold of the richest clients as well as gaining structural access to government employees and politicians. This access and capacity as well as if the Big Four’s national/local offices operate in an illegal or unethical manner can have detrimental outcomes for the states’ development capacities. The findings can provide a theoretical roadmap for further studies on the Big Four, especially in terms of how their operations affect the development capacities in Angola, Tanzania and South Africa. IV V Contents Acronyms ......................................................................................................................... VIII Chapter I Introduction ........................................................................................................................... 1 Research Context .......................................................................................................................... 2 Research Objectives and Questions .............................................................................................. 4 Thesis Structure ............................................................................................................................ 4 Chapter II Background ........................................................................................................................... 5 State Capacity ............................................................................................................................... 5 Tax and Development ................................................................................................................... 6 Interest Groups and Lobbying ....................................................................................................... 8 Theoretical Framework ......................................................................................................... 9 Power: A Radical View .................................................................................................................. 9 Example of Power Relations in Politics........................................................................................ 10 Chapter III Methodology ........................................................................................................................ 13 Research Design .......................................................................................................................... 13 Case study as a method ..........................................................................................................................13 Research Questions and Propositions .....................................................................................................15 Case study selection ...............................................................................................................................16 Data Sampling and Collection ..................................................................................................... 18 Data sampling ........................................................................................................................................18 Data collection .......................................................................................................................................18 Methods for analysis ................................................................................................................... 19 Ethical considerations ................................................................................................................. 20 Chapter IV Literature Review & Findings ............................................................................................. 20 The Interests of the Big Four ....................................................................................................... 20 In the context of: ......................................................................................................................... 23 Tanzania.................................................................................................................................................24 Angola....................................................................................................................................................26 South AFrica ...........................................................................................................................................30 Chapter V Analysis and discussion ....................................................................................................... 33 Analysis ....................................................................................................................................... 34 The Big Four as interest groups ...............................................................................................................34 VI Where is the state capacity? ...................................................................................................................35 The development issues .........................................................................................................................37 Power and Relations...............................................................................................................................38 Discussion ................................................................................................................................... 41 Access From the Global Network .............................................................................................................41 Global Code of Conduct ..........................................................................................................................42 The Results and Outcomes .....................................................................................................................43 Chapter VI Conclusion..........................................................................................................................