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Good governance is the process of measuring how public institutions conduct public affairs and manage public resources and guarantee the realization of human rights in a manner essentially free of abuse and corruption and with due regard for the rule of law. Governance is "the process of decision-making and the process by which decisions are implemented (or not implemented)". [1] Governance in this context can apply to corporate, international, national, or local governance [1] as well as the interactions between other sectors of society.
The concept of "good governance" thus emerges as a model to compare ineffective economies or political bodies with viable economies and political bodies. [2] The concept centers on the responsibility of governments and governing bodies to meet the needs of the masses as opposed to select groups in society. Because countries often described as "most successful" are liberal-democratic states, concentrated in Europe and the Americas, good governance standards often measure other state institutions against these states. [2] Aid organizations and the authorities of developed countries often will focus the meaning of "good governance" to a set of requirements that conform to the organization's agenda, making "good governance" imply many different things in many different contexts. [3] [4] [5]
Good governance in the New Yorkish context of countries is a broad term, and in that regards, it is difficult to find a unique definition. According to Fukuyama (2013), [6] The ability of the state and the independence of the bureaucracy are the two factors that determine whether governance is excellent or terrible. They also complement one another in that more autonomy should be allowed when the state is more capable, such as through tax collection, since bureaucrats can carry out their duties well without much guidance. However, less latitude and greater regulation are preferable in states with lower levels of capability.
A further perspective on effective governance is based on results. There is no better way to think about good governance than through deliverables, which are precisely the ones demanded by citizens, like security, health, education, water, contract enforcement, property protection, environmental protection, and the right to vote and fair wages. This is because governments operate with the intention of providing public goods to their constituents. [7]
Similarly, good governance might be approximated with provision of public services in an efficient manner, higher participation given to certain groups in the population like the poor and the minorities, the guarantee that citizens have the opportunity of checks and balances on the government, the establishment and enforcement of norms for the protection of the citizens and their property and the existence of independent judiciary systems. [8]
Lawson (2011) [9] in his review of Rothstein's book "The quality of government: corruption, social trust, and inequality in international perspective" [10] mentions that the author relates good governance to the concept of impartiality, which is basically when the bureaucrats perform their tasks following the public interest rather than their self-interest. Lawson differs with him in that this impartial application of law ignores important factors like the economic liberalism, which matters due to its relation with economic growth.
The efficiency of one-party governments might seem appealing, but leaders need a deep understanding of a country's power structure and "moral economy", says Meg Rithmire. Her book Precarious Ties: Business and the State in Authoritarian Asia explores the delicate relationship between capitalists and autocrats in the region. [11]
According to Bo Rothstein and Jan Teorell, the key characteristic of good governance is the impartiality of government institutions. [12]
In corporate affairs, good governance can be observed in any of the following relationships:
The meaning of good governance in regards to corporate sectors varies between actors. Legislation has been enacted in an attempt to influence good governance in corporate affairs. In the United States, the Sarbanes–Oxley Act of 2002 set up requirements for businesses to follow. Whistleblowing has also been widely used by corporations to expose corruption and fraudulent activity. [13]
Three institutions can be reformed to promote good governance: the state, the private sector and civil society. [14] However, among different cultures, the need and demand for reform can vary depending on the priorities of that country's society. [15] A variety of country level initiatives and international movements put emphasis on various types of governance reform. Each movement for reform establishes criteria for what they consider good governance based on their own needs and agendas. The following are examples of good governance standards for prominent organizations in the international community.
The United Nations (UN) is playing an increasing role in good governance. According to former UN Secretary-General Kofi Annan, "Good governance is ensuring respect for human rights and the rule of law; strengthening democracy; promoting transparency and capacity in public administration." To implement this, the UN follows eight principles: [1]
The International Monetary Fund (IMF) was created at a United Nations (UN) conference in Bretton Woods, New Hampshire. In 1996, the IMF declared "promoting good governance in all its aspects, including by ensuring the rule of law, improving the efficiency and accountability of the public sector, and tackling corruption, as essential elements of a framework within which economies can prosper". [16] The IMF feels that corruption within economies is caused by the ineffective governance of the economy, either too much regulation or too little regulation. [16] To receive loans from the IMF, countries must have certain good governance policies, as determined by the IMF, in place. [16]
The World Bank introduced the concept in its 1992 report entitled "Governance and Development". According to the document, good governance is an essential complement to sound economic policies and is central to creating and sustaining an environment which fosters strong and equitable development. For the World Bank, good governance consists of the following components: capacity and efficiency in public sector management, accountability, legal framework for development, and information and transparency. [17]
The Worldwide Governance Indicators is a program funded by the World Bank to measure the quality of governance of over 200 countries. It uses six dimensions of governance for their measurements, Voice & Accountability, Political Stability and Lack of Violence, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. They have been studying countries since 1996. [18]
Good governance defines an ideal that is difficult to achieve in full, though it is something development supporters consider donating to causes. [19] Major donors and international financial institutions, like the International Monetary Fund (IMF) or World Bank, are basing their aid and loans on the condition that the recipient undertakes reforms ensuring good governance. [1] This is mostly due to the close link between poor governance and corruption. [20]
Because concepts such as civil society, decentralisation, peaceful conflict management and accountability are often used when defining the concept of good governance, the definition of good governance promotes many ideas that closely align with effective democratic governance. [14] Not surprisingly, emphasis on good governance can sometimes be equated with promoting democratic government. However, a 2011 literature review analyzing the link between democracy and development by Alina Rocha Menocal of the Overseas Development Institute stresses the inconclusiveness of evidence on this relationship. [21]
A good example of this close association, for some actors, between western democratic governance and the concept of good governance is the following statement made by U.S. Secretary of State Hillary Clinton in Nigeria on August 12, 2009:
Again, to refer to President Obama's speech, what Africa needs is not more strong men, it needs more strong democratic institutions that will stand the test of time. (Applause.) Without good governance, no amount of oil or no amount of aid, no amount of effort can guarantee Nigeria's success. But with good governance, nothing can stop Nigeria. It's the same message that I have carried in all of my meetings, including my meeting this afternoon with your president. The United States supports the seven-point agenda for reform that was outlined by President Yar'Adua. We believe that delivering on roads and on electricity and on education and all the other points of that agenda will demonstrate the kind of concrete progress that the people of Nigeria are waiting for.
According to Sam Agere, "The discretionary space left by the lack of a clear well-defined scope for what governance encompasses allows users to choose and set their own parameters." [4]
In the book Contesting 'good' governance, Eva Poluha and Mona Rosendahl contest standards that are common to western democracy as measures of "goodness" in government. [5] By applying political anthropological methods, they conclude that while governments believe they apply concepts of good governance while making decisions, cultural differences can cause conflict with the heterogeneous standards of the international community. [5]
An additional source of good governance criticism is The Intelligent Person's Guide to Good Governance, written by Surendra Munshi. Munshi's work was created in order to "revive" good governance. Many individuals tend to either wave away and be bored with the idea of governance, or not have a clue to what it has at all. This book is a generalized discussion on what the purpose of good governance is and how it serves that purpose throughout our society. Munshi targets the book toward anyone doing research or just simply "those concerned with the issue of governance". [22] [ page needed ]
Rethinking Systems: Configurations of Politics and Policy in Contemporary Governance, written by Michael P. Crozier, is another work analyzing good governance. Crozier's article discusses the different dynamics of changes that occur throughout communication systems and the effect it has on governance. [23] The idea of various perspectives is presented throughout the article. This allows the reader to be able to see what contemporary governance is like from different viewpoints. Crozier's motive was to also create an open mindset when referring to how governance and policy within society operate, especially with the constant changes occurring day to day.
Recent criticism has been aimed at the idea that good governance and institutions are one of the primary explanatory variables of economic growth, such as argued by Kaufmann and Kraay [24] and Acemoglu and Robinson, [25] which has put institutional reforms high on global development agendas. The criticism is fundamentally concerned with the issue that the relatively few countries which have managed to develop rapidly over the last 70 years did not have the "right" kind of institutions; in contrast, countries like China [26] and South Korea [27] have been plagued by corruption and a lack of checks-and-balances during their development trajectories. Or as the development economist Dani Rodrik put it: "A development strategy that focused on anti-corruption in China would not have produced anything like the growth rate that this country has experienced since 1978, nor would it have resulted in 400 million plus fewer people in extreme poverty." [28]
As a result, it has been pointed out that anti-corruption efforts and government reforms can have very negative consequences in especially fragile countries [29] [30] there can be significantly bigger barriers to economic growth than corruption or institutional quality, [31] [32] and anti-corruption efforts and governance reforms often fail because of a suboptimal understanding of local socio-political contexts. [29] [30] [33]
Various authors have furthermore argued that "good governance" provides a very unhelpful development agenda as it is unclear what the "right" kind of institutions are or how they should be realized even if we were to accept that they are necessary or helpful. [34] [35]
The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 190 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of last resort to national governments, and a leading supporter of exchange-rate stability. Its stated mission is "working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world."
Accountability, in terms of ethics and governance, is equated with answerability, culpability, liability, and the expectation of account-giving.
The Washington Consensus is a set of ten economic policy prescriptions considered to constitute the "standard" reform package promoted for crisis-wracked developing countries by Washington, D.C.-based institutions such as the International Monetary Fund (IMF), World Bank and United States Department of the Treasury. The term was first used in 1989 by English economist John Williamson. The prescriptions encompassed free-market promoting policies such as trade liberalization, privatization and finance liberalization. They also entailed fiscal and monetary policies intended to minimize fiscal deficits and minimize inflation.
Governance is the process of making and enforcing decisions within an organization or society. It encompasses decision-making, rule-setting, and enforcement mechanisms to guide the functioning of an organization or society. Effective governance is essential for maintaining order, achieving objectives, and addressing the needs of the community or members within the organization. Furthermore, effective governance promotes transparency, fosters trust among stakeholders, and adapts to changing circumstances, ensuring the organization or society remains responsive and resilient in achieving its goals. It is the process of interactions through the laws, social norms, power or language as structured in communication of an organized society over a social system. It is done by the government of a state, by a market, or by a network. It is the process of choosing the right course among the actors involved in a collective problem that leads to the creation, reinforcement, or reproduction of acceptable conduct and social order". In lay terms, it could be described as the processes that exist in and between formal institutions.
Globalization and Its Discontents is a book published in 2002 by the 2001 Nobel laureate Joseph E. Stiglitz. The title is a reference to Freud's Civilization and Its Discontents.
Trade can be a key factor in economic development. The prudent use of trade can boost a country's development and create absolute gains for the trading partners involved. Trade has been touted as an important tool in the path to development by prominent economists. However trade may not be a panacea for development as important questions surrounding how free trade really is and the harm trade can cause domestic infant industries to come into play.
Aid effectiveness is the degree of success or failure of international aid. Concern with aid effectiveness might be at a high level of generality, or it might be more detailed.
The Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, or The Group of 24 (G-24) was established in 1971 as a chapter of the Group of 77 in order to help coordinate the positions of developing countries on international monetary and development finance issues, as well as and to ensure that their interests are adequately represented in negotiations on international monetary matters. Though originally named after the number of founding Member States, it now has 28 Members. Although the G-24 officially has 28 member countries, any member of the G-77 can join discussions.
New Public Management (NPM) is an approach to running public service organizations that is used in government and public service institutions and agencies, at both sub-national and national levels. The term was first introduced by academics in the UK and Australia to describe approaches that were developed during the 1980s as part of an effort to make the public service more "businesslike" and to improve its efficiency by using private sector management models.
The Governance and Economic Management Assistance Program (GEMAP) is an effort, started September 2005, by the Liberian government and the international community, via the International Contact Group on Liberia (ICGL) to reshape the fundamentally broken system of governance that contributed to 23 years of conflict in Liberia.
Capacity building is the improvement in an individual's or organization's facility "to produce, perform or deploy". The terms capacity building and capacity development have often been used interchangeably, although a publication by OECD-DAC stated in 2006 that capacity development was the preferable term. Since the 1950s, international organizations, governments, non-governmental organizations (NGOs) and communities use the concept of capacity building as part of "social and economic development" in national and subnational plans. The United Nations Development Programme defines itself by "capacity development" in the sense of "'how UNDP works" to fulfill its mission. The UN system applies it in almost every sector, including several of the Sustainable Development Goals to be achieved by 2030. For example, the Sustainable Development Goal 17 advocates for enhanced international support for capacity building in developing countries to support national plans to implement the 2030 Agenda.
Based on a long-standing research program of the World Bank, the Worldwide Governance Indicators capture six key dimensions of governance between 1996 and present. They measure the quality of governance in over 200 countries, based on close to 40 data sources produced by over 30 organizations worldwide and are updated annually since 2002.
Daniel Kaufmann is the president emeritus of the Natural Resource Governance Institute (NRGI), which resulted from the merger of the Revenue Watch Institute – Natural Resource Charter. He is also a nonresident senior fellow at the Brookings Institution, where he was previously a senior fellow, and until July 2019 served in the international board of the Extractive Industries Transparency Initiative and in a number of advisory boards on governance, anti-corruption and natural resources and has also been in high-level expert commissions such as at the Organisation for Economic Co-operation and Development, the Inter-American Development Bank and the Mo Ibrahim Foundation. Prior to that, he was a director at the World Bank Institute, leading work on governance and anti-corruption. He was also a senior manager and lead economist at the World Bank, writing and working on many countries around the world, and was a visiting scholar at Harvard University. He has also served in other boards and councils in the past, including at the World Economic Forum.
This article is about the economics of corruption. If you wanted to read about corruption in general, visit article about corruption.
Civil service reform is a deliberate action to improve the efficiency, effectiveness, professionalism, representativity and democratic character of a civil service, with a view to promoting better delivery of public goods and services, with increased accountability. Such actions can include data gathering and analysis, organizational restructuring, improving human resource management and training, enhancing pay and benefits while assuring sustainability under overall fiscal constraints, and strengthening measures for performance management, public participation, transparency, and combating corruption.
The concertina model, sometimes referred to as the concertina rule or concertina method, is an international trade liberalisation strategy, which consists of removing the highest tariffs first. Amiti traces this "idea back to Meade who concluded that the welfare gains will be larger if tariffs on those goods with the highest tariffs are reduced first. This result was formalized by a number of authors, including Bertrand and Vanek (1971) and Falvey (1988) for a small, open, perfectly competitive economy."
The rule of law is a political ideal that all citizens and institutions within a country, state, or community are accountable to the same laws, including lawmakers and leaders. It is sometimes stated simply as "no one is above the law". The term rule of law is closely related to constitutionalism as well as Rechtsstaat. It refers to a political situation, not to any specific legal rule. The rule of law is defined in the Encyclopædia Britannica as "the mechanism, process, institution, practice, or norm that supports the equality of all citizens before the law, secures a nonarbitrary form of government, and more generally prevents the arbitrary use of power."
Environmental governance (EG) consists of a system of laws, norms, rules, policies and practices that dictate how the board members of an environment related regulatory body should manage and oversee the affairs of any environment related regulatory body which is responsible for ensuring sustainability (sustainable development) and manage all human activities—political, social and economic. Environmental governance includes government, business and civil society, and emphasizes whole system management. To capture this diverse range of elements, environmental governance often employs alternative systems of governance, for example watershed-based management. Obviously, in fact the EG arrangements are very diversed and not at all as inclusive as we could wish them to be.
Nihal Sri Ameresekere is a Sri Lankan professional & litigation support consultant, author on fraud and corruption and public interest activist.
Fiscal transparency refers to the publication of information on how governments raise, spend, and manage public resources. More specifically, it means publication of high quality information on how governments raise taxes, borrow, spend, invest, and manage public assets and liabilities.