Ethical Issues in International Relations & Corporate Governance

Can nations be ethical? UPSC has asked this question directly and indirectly across multiple years. The 2015 GS IV paper tested whether moral principles apply equally to individuals and states. Your answer depends on which ethical framework you adopt — and UPSC expects you to know all of them.

The Core Debate: Realism vs Idealism

Two schools have dominated international relations theory for centuries. Understanding both is non-negotiable for GS IV and PSIR Optional.

Realism holds that states operate in an anarchic international system where power is the primary currency. Hans Morgenthau argued that statesmen must think and act in terms of national interest defined as power. Machiavelli went further — the ruler's duty to the state overrides personal morality. Lord Palmerston captured it bluntly: "No permanent friends or enemies, only permanent interests."

Idealism counters that international law, cooperation, and moral principles should govern state behavior. Immanuel Kant‘s essay on Perpetual Peace (1795) proposed a federation of free states bound by shared norms. Woodrow Wilson operationalized this through the League of Nations after World War I. The United Nations, ICJ, and ICC represent institutional attempts to embed ethics into the international order.

Common student mistake: Presenting realism and idealism as completely opposed. Modern international relations operates on a spectrum. Even realist states sign human rights treaties. Even idealist frameworks accommodate strategic interests.

Constructivism offers a third path — states' interests are not fixed but shaped by shared ideas, norms, and identities. Alexander Wendt's famous line — "Anarchy is what states make of it" — means ethical norms can genuinely transform state behavior over time.

India's Position: Principled Pragmatism

India's foreign policy defies neat classification. It blends idealism with hard-nosed pragmatism.

Panchsheel (Five Principles of Peaceful Coexistence), signed by Nehru and Zhou Enlai in 1954, embodies idealist principles — mutual respect for sovereignty, non-aggression, non-interference, equality, and peaceful coexistence. Yet India conducted nuclear tests in 1974 and 1998, joined the Quad, and maintains strategic partnerships with both Russia and the United States.

This is not hypocrisy. It is principled pragmatism — pursuing national interest while upholding a rules-based international order. UPSC values this nuanced understanding over simplistic categorization.

Ethical Issues in International Relations

Humanitarian Intervention vs Sovereignty

The Responsibility to Protect (R2P) doctrine, adopted at the 2005 UN World Summit, holds that sovereignty is not absolute — the international community can intervene when a state fails to protect its people from genocide, war crimes, ethnic cleansing, or crimes against humanity.

The Libya intervention (2011) was authorized under R2P. NATO enforced a no-fly zone, but the operation morphed into regime change. The Syrian crisis exposed R2P's limits — Russia and China blocked intervention, and millions suffered. The ethical question remains: who decides when intervention is justified, and who prevents mission creep?

Economic Sanctions

Sanctions against Iran and Cuba demonstrate a persistent ethical problem — they hurt ordinary civilians more than the regimes they target. Over 500,000 Iraqi children died during the 1990s sanctions, per UNICEF estimates. The ethical cost of "peaceful" coercion deserves serious examination.

Nuclear Weapons and Deterrence

Just War Theory asks whether the threat of nuclear annihilation can ever be morally justified. Nuclear deterrence has arguably prevented great-power war since 1945, but it holds civilian populations hostage to mutual destruction. India's No First Use (NFU) doctrine represents an ethical constraint within deterrence logic.

Climate Justice

Common But Differentiated Responsibilities and Respective Capabilities (CBDR-RC) is the ethical backbone of climate negotiations. Developed nations produced 79% of historical CO2 emissions (1850-2011), yet developing nations bear the heaviest climate impacts. India's per capita emissions remain one-third the global average. Climate justice demands that historical polluters fund adaptation and transfer technology.

Refugee Rights

The treatment of Rohingya, Syrian, and Afghan refugees tests international ethics. India is not a signatory to the 1951 Refugee Convention, yet has historically sheltered Tibetans, Tamils, and Bangladeshis. The absence of a domestic refugee law creates an ethical gap between India's practice and its legal framework.

Corporate Governance: The Ethics of Business

Corporate governance ethics has become a staple in UPSC papers. The 2017 GS IV paper asked about corporate social responsibility and its ethical foundations.

Stakeholder Theory vs Shareholder Primacy

Milton Friedman argued that a corporation's only social responsibility is to increase profits. Stakeholder theory (R. Edward Freeman) counters that businesses owe obligations to employees, communities, the environment, and society — not just shareholders. Indian policy has firmly embraced the stakeholder approach.

India's CSR Mandate

The Companies Act 2013, Section 135 made India the first country to mandate corporate social responsibility. Companies with net worth over Rs 500 crore, turnover over Rs 1,000 crore, or net profit over Rs 5 crore must spend 2% of average net profit (preceding three years) on CSR activities. SEBI's Business Responsibility and Sustainability Reporting (BRSR) framework, mandatory from 2022-23 for the top 1,000 listed companies, pushes ESG transparency further.

Corporate Fraud: Case Studies

The Sarbanes-Oxley Act (2002) in the US and India's Whistleblowers Protection Act 2014 emerged from such failures. India's whistleblower law remains weak — it covers only public servants, rules were not notified for years, and private sector whistleblowers have no statutory protection.

ESG Investing

Environmental, Social, and Governance (ESG) criteria now drive investment decisions globally. ESG assets are projected to exceed $53 trillion by 2025 (Bloomberg). The ethical argument is straightforward: businesses that ignore environmental damage, labor exploitation, or governance failures create long-term risk for everyone.

Ethical Frameworks in International Relations

How to Use This in UPSC Answers

For GS IV essays, frame international ethics around the tension between national interest and universal moral principles. Use India-specific examples. For case studies, apply stakeholder analysis — identify who benefits, who suffers, and what ethical principles are at stake.

For corporate governance questions, always connect to the values tested in GS IV: integrity, transparency, accountability, and public service. The Satyam case is a goldmine for illustrating multiple ethical failures in one scenario.

Common student mistake: Writing about international ethics without mentioning specific frameworks or thinkers. UPSC rewards precision. Name the theory, name the thinker, give the example.

Watch on YouTube

Related video from the Anantam IAS YouTube channel.