Corporate community involvement contributes capital or resources in various forms to a community. However, such involvement may also influence local institutions that determine how well these resources are used, i.e. the extent to which they are used promote the public good rather than being subject to private capture. For community involvement to have a beneficial effect on local development, corporations need to consider their impact on local institutions. This paper presents two case studies from Tanzania which illustrate how community involvement activities of two mining firms have resulted in misappropriation of and conflict over corporate community involvement funds. It is argued that corporations need an analytical approach which integrates a differentiated stakeholder approach with institutional theory to contribute to local development in poor communities.
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