Since the end of the 1980s the issue of good governance has dominated the international discussion about development and international assistance to developing countries. It has been argued that good governance is an essential precondition for development. There are many countries that are similar in terms of their natural resources and social structures but with strikingly different performance in improving the welfare of their people. These differences have been attributed to standards of governance i. e. poor governance which stifles and impedes development.
In those countries corruption is high, there is poor control of public funds, lack of accountability, abuses of human rights and excessive military influence; development inevitably has suffered (Karl Wohlmuth, Hans H. Bass, et al, 1999).
The term good governance was first used by the World Bank in 1989 to characterize the crisis in Sub-Sahara Africa as a crisis of governance and has become an increasingly popular and favorite subject among donor agencies. Its emergence was also strongly driven by the end of the Cold War.
In the aid circles, “good governance” became the most prominent paradigm within which to direct political reform effort, marking a shift from strategic alliance building used during the cold war to facilitating the adoption of western institutions open and transparent standards. Aid was now being used as a carrot to assist this objective, the main difference between cold war and post-cold war lying in the level of transparency. The rise of the good governance concept can therefore be traced to the World Bank who originally embarked upon utilizing the concept as it grappled with the challenge of why aid had failed in Africa.
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It focused inward to the institutions governing the economy and the implementation of structural reform. It found the problem to be developing countries, especially Africa’s governance i. e. the management of a country’s economic and social resources. The apparent appeal of the term ‘governance’ for policy-makers such as those in the World Bank was the term’s elasticity in referring to the complexities of political structures within the broader process of administration and management. It was a term that connected the concepts of politics and administration.
The World Bank eventually identified three distinct aspects of governance as: i) The political regime, ii) The process by which authority is exercised in the management of a country’s resources, and iii) The capacity of governments to design, formulate and implement policies and discharge functions. (Susan Kirillo, 2005).
Aspects of good governance encompass a ‘core area’ and an associated area. Many donor agencies now subscribe to the core non-political dimension of governance as their common denominator.
This dimension may be summarized as encompassing the four categories of the World Bank’s good governance framework, which are public sector management, rule of law, transparency and information, accountability and financial management. These core areas aim at development of good economic governance (Susan Kirillo, 2005).
Donors now widely accept that the quality of governance does matter for development performance and aid effectiveness. They have expanded their work on governance and political issues. This includes:
i) Supporting the development of international agreements and initiative on governance. i) Substantial funding and technical assistance for governance reforms and capacity building in developing countries. iii) Promoting policy processes that foster participation. iv) Supporting regional mechanisms for improving governance such as the African Peer Review Mechanism (APRM).
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Many donors now consider governance issues in selecting focus countries or in informing their aid allocations across countries e. g. the World Bank uses the country policy and international governance assessments. This policy brief has put forward ideas on a set of core governance issues and considerations for aid allocation and country programming.
Better orientation of aid interventions to governance contexts helps make development assistance more effective and allay fears about doubling aid. This benefits both poor people in developing countries and reassures taxpayers in donor countries. Good governance is now a significant pillar in developing countries and the consideration of a state’s ability to confirm to universally acceptable democratic standards. But in most developing countries, the present condition of good governance is not satisfactory; it is laden with many barriers.
This in turn has an effect on development as more often than not; sound development is facilitated by good governance. Good governance is now viewed as essential for promoting economic growth and alleviating poverty in developing countries. Without good governance it is assumed that benefits of reforms will not reach the poor and funds will not be used effectively. The Meaning of Good Governance For better understanding of good governance it is necessary to know what poor or bad governance is. A World Bank booklet lucidly summarized the major symptoms of poor governance as:
i. Failure to make clear separation between what is public and what is private hence a tendency. ii. Failure to establish a predictable framework of law and government behavior conducive to development or arbitrariness in the application of rules and laws iii. Executive rules, regulations, licensing requirements and so forth, which impede, functioning of markets and encourage rent seeking. iv. Priorities, inconsistent with development, resulting in a misallocation of resources v. Excessively narrowly based or non-transparent decision making. vi. Excessive costs, poor service to the public and failure to achieve the aims of policy.
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The concept of ‘governance’ is as old as human civilization. It is mentioned that, sometimes governance and government are used interchangeably, possibly because the former is regarded as a useful buzz-word. Usually governance means government plus something else: public policies, institutions, and a system of economic relationships or a role for the non-governmental sector in the business of the state (B. C. Smith; 2007; 3-4).
The term ‘governance’ means: the process of decision making and the process by which decisions are implemented or not implemented.
Governance is used in several contexts such as corporate governance, international governance, national governance and local governance (UNESCAP).
The terms ‘governance’ and ‘good governance’ are increasingly being used in development literature. Bad governance is now regarded as one of the root causes of all under development within society. Most of the donors and international financial institutions are increasingly basing their aid and loans on the condition that reforms that ensure “good governance” are undertaken.
The World Bank and United Nations Development Program (UNPD) see governance as the manner in which a country’s economic and social resources are managed and power is distributed. “Governance encompasses every institution and organization in society from the family to the state”. This view of governance recognizes its importance in development of institutions, particularly private property and the rule of law. Governance has also been defined as a network of private non-governmental bodies that have a role to play in the formulation and implementation of public policy and the delivery of public services.
Governance is government plus the private and not for profit sectors (B. C. Smith; 2007; 4-5).
Government is one of the most important actors in governance. The other actors involved in governance vary depending on the level of government that is under discussion (UNESCAP).
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Good governance is not only for a type of government and its related political values but also for certain kinds of additional components. It implies government that is democratically organized within a democratic political culture and with efficient administrative organizations, plus the right policies, particularly in the economic sphere (B. C. Smith; 2007; 4-5).
At the constitutional level good governance requires changes that will strengthen the accountability of political leaders to the people, ensure respect for human rights, strengthen the rule of law and decentralize political authority. At the political and organizational level, good governance requires three attributes that are common to the governance agendas of most aid agencies: political pluralism, opportunities for extensive participation in politics, and uprightness and incorruptibility in the use of public powers and offices by servants of the state.
Administratively, good governance requires accountable and transparent public administration; and effective public management, including a capacity to design good policies as well as to implement them (B. C. Smith; 2007; 4-6).
The UNDP defined good governance as “The exercise of political, economic and administrative authority to manage a nation’s affaires. It is the complex mechanisms, processes, relationships and groups articulating their interests, exercising their rights and obligations and mediating their differences” (Cornelias Ncube; 2005).