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Introduction
In 1990s, management largely lost its pristine glory to a new avatar called
governance which dislodged it from the hall of fame and fashion. Government had,
so far, exclusive jurisdiction over governance, connected as, it seemed, it was with
sovereign functions, but with the rise of this epithet to the position of prominence, the
business corporate world also adopted it. Thus, corporate governance became
fashionable. As a consequence, public administration or management ceased to be the
focus. It was thought, words like administration or management harped on processual,
whereas governance was the substantive part of functioning of states organisational
life, being at the heart of the thing. Governance is administration-cum-management
plus, and hence more inclusive, more expansive, more citizen-cum-customer related
and more modernly contemporary.
The Websters Encyclopaedic Unabridged Dictionary of the English Language
defines governance as a method or system of government or management. The term
governance is thus a qualitative expression, a normative concept and is different
from government.
Governance is a qualitative concept whereas government is a physical entity. The
report of Al Gores National Performance Review (1993) prefers the term
democratic governance to good governance and its distinguishing attributes lie in
certain values such as equal opportunity, justice, diversity and democracy.
Good Governance: The Concept
Good Governance being an adjective expression connotes certain value-assumptions,
whereas governance as a process denotes a value free dispensation. Good
governance is associated with efficient and effective administration in a democratic
framework. It is equivalent to purposive and development oriented administration
which is committed to improvement in quality of life of the people. It implies high
level of organisational effectiveness. It also relates to the capacity of the centre of
power of political and administrative system to cope up with the emerging challenges
of the society. It refers to adoption of new values of governance to establish greater
efficiency, legitimacy and credibility of the system. Good governance is, thus, a
function of installation of positive virtues of administration and elimination of vices
of dysfunctionalities. In short, it must have the attributes of an effective, credible and
legitimate administrative system- citizen-friendly, value-caring and people-sharing.
The concept of good governance derives its relevance in the context of
misgovernance which includes non-feasance, over- feasance and malfeasance. In
many countries, the democratic form of government has proved to be ineffective for
checking swindling of public funds for private gains by the elected leaders as well as
permanent-bureaucrats. Misuse of power, fraud, chicanery and embezzlement of
funds are systematically perpetrated by the leaders of government and their unions.
Misgovernance is found all around, especially in the developing countries, in rampant
degree. The concept of good governance becomes attractive as a remedy against this
state of affairs.
governance. But the pursuit of it is as old as our civilisation. The term good
governance however, comprehends the processes and procedures as well as
substantial concerns. It is only then that sustainable development is really possible.
World Bank Document on Sub-Saharan Africa
In 1989, the concept of governance was for the first time highlighted in a World
Bank Document on Sub-Saharan Africa. By good governance was meant, at that time,
sound development management. Four key dimensions identified in this context were:
(i) public sector management; (ii) accountability; (iii) legal framework for
development; and (iv) information and transparency. The Bank Document on SubSaharan Africa had this to say: Improving governance would begin with an
assessment of the institutional environment (with emphasis on the key governance
elements of accountability, rule of law, openness and transparency) which determines
the patrimonial profile of the country: high when all other factors are absent and low
when they are present.
World Bank Prescription
World Banks document, entitled Governance and Development (1992), puts it,
governance is defined as the manner in which power is exercised in the management
of a countrys economic and social resources for development.
From its lending experience in many developing countries, the Bank came to realise
that good governance is central to creating and sustaining an environment which
fosters strong and equitable development, and it is an essential complement to sound
economic policies. Three distinct aspects are identical in the conceptualisation of
governance: (i) the form of political regime (parliamentary or presidential, military
or civilian, and authoritarian or democratic); (ii) The process by which authority is
exercised in the management of a countrys economic and social resources; and (iii)
the capacity of governments to design, formulate and implement policies, and in
general, to discharge government functions.
Recounting its wide experience, the Bank Document narrates vividly the problems of
governance. For instance, despite technical soundness, programmes and projects
have often failed to produce desired results. Laws are not enforced properly and there
are often delays in implementation. Privatized production and market-led growth do
not succeed unless investors face clear rules and institutions. In the absence of proper
accounting systems, budgetary policies cannot be implemented or monitored. Many a
time, procurement systems encourage corruption and distort public investment
priorities. Again, failure to involve beneficiaries and others affected in the design and
implementation of projects has often led to substantial erosion of their sustainability.
Against this background of mal-governance, the Bank has attempted to focus on some
of the key dimensions of governance, such as a public sector management,
accountability, the legal framework for development, and information and
transparency, as already stated.
The Bank has identified a number of aspects of good governance which has assumed
significance for the developed and the developing countries. These factors deal with
political and administrative aspects, which are as follows:
1. Political accountability, including the acceptability of political system by the
people, and regular elections to legitimize the exercise of political power.
2. Freedom of association and participation by various religious, social,
economic, cultural and professional groups in the process of governance.
responsibility for the provision of public goods, with fiscal resources being channelled
in a preferential manner to ensure their supply. This also contributes to improving
equity in the economy (although user fees may be levied to promote cost recovery
where feasible).
In a market-oriented economy, the government has the obligation to see to it that
markets function efficiently and that the playing field is level for all participants. This
requires mobility of factors of production, free flow of information regarding prices
and technology, and competition among buyers (for outputs) and sellers (for inputs).
Market regulation by the government should ensure that the operating rules do not
discriminate between individual participants or interest groups. This implies wide
publicity for legislation and administrative rules and their fair and transparent
application.
A key responsibility of government is ensuring that the benefits of economic growth
are equitably distributed across society. Taxation and expenditure measures are
prominent instruments for this purpose. While taxes should not be excessive (so as not
to discourage production and growth), they should be collected effectively to provide
adequate revenue for essential services (and help maintain fiscal balance). The latter
consideration also requires that public spending avoid excessive debt-service burdens
and subsidies for low priority activities be phased out. This underscores the close
relationship between equity and macroeconomic stability.
Given the role of government as economic development manager, as outlined above,
policies that best suit these responsibilities need to be followed. Once those policy
choices are made, however, good governance is required to make sure that
implementation is effective and consistent. As a development partner, the Bank has a
clear and direct interest in the capacity of borrowing governments to fulfil their
economic role by implementing the associated policies. More specifically, the success
of the Banks project investments depends crucially on the efficacy of the institutional
framework in DMCs and the consequent capability for purposive implementation.
growth. Hence, the World Banks emphasis in recent years has shifted from its own
interventions to the overall country context (i.e., the governance climate) within
which those interventions take place. In doing so, it has been guided by the nature of
its operations and the opportunities for action that these offer. Accordingly, the key
dimensions of governance identified by the World Bank are (i) public sector
management, (ii) accountability, (iii) legal framework for development, and (iv)
transparency and information.
The Bank also regards governance as synonymous with sound development
management. It therefore relates governance to the effectiveness with which
development assistance is used, the impact of development programs and projects
(including those financed by the Bank), and the absorptive capacity of borrowing
DMCs. (3)
Accordingly, like the World Bank, the Bank, too, is concerned directly with the
manner in which the public sector is managed in DMCs, and with the legal framework
for development. However, in formulating an analytical framework for addressing
governance issues, the Bank prefers to draw a distinction between, on the one hand,
elements of good governance and, on the other, the specific areas of action (e.g.,
public sector management) in which they could be promoted or their existence
enhanced. In line with this reasoning, and building upon the approach of the World
Bank, the Bank has identified four basic elements of good governance: (i)
accountability, (ii) participation, (iii) predictability, and (iv) transparency.
The following sections consider briefly the relevance of the four elements of good
governance to the development process. (4)
Access to accurate and timely information about the economy and government
policies can be vital for economic decision making by the private sector. On grounds
of efficiency alone, such data should be freely and readily available to economic
agents. While this is true across all areas of the economy, it is especially relevant in
the case of those sectors that are intrinsically information intensive, such as the
financial sector in general and capital markets in particular.
Transparency in government decision making and public policy implementation
reduces uncertainty and can help inhibit corruption among public officials. To this
end, rules and procedures that are simple, straightforward, and easy to apply are
preferable to those that provide discretionary powers to government officials or that
are susceptible to different interpretations. However well-intentioned the latter type of
rule might be in theory, its purpose can be vitiated in practice through error or
otherwise.
In practice, though, it may sometimes be necessary to place limits on the principle of
transparency. In doing so, it may be helpful to distinguish information as a
commodity from information as a process. For example, intellectual property rights
may need to be protected in order to encourage innovation and invention; but decision
making on the establishment of intellectual property and rights thereto (i.e., to whom
they are granted and why) should be transparent.
Responsiveness
Good governance requires that institutions and processes try to serve all stakeholders
within a reasonable timeframe.
Consensus oriented
There are several actors and as many view points in a given society. Good governance
requires mediation of the different interests in society to reach a broad consensus in
society on what is in the best interest of the whole community and how this can be
achieved. It also requires a broad and long-term perspective on what is needed for
sustainable human development and how to achieve the goals of such development.
This can only result from an understanding of the historical, cultural and social
contexts of a given society or community.
Equity and inclusiveness
A societys well being depends on ensuring that all its members feel that they have a
stake in it and do not feel excluded from the mainstream of society. This requires all
groups, but particularly the most vulnerable, have opportunities to improve or
maintain their well being.
Effectiveness and efficiency
Good governance means that processes and institutions produce results that meet the
needs of society while making the best use of resources at their disposal. The concept
of efficiency in the context of good governance also covers the sustainable use of
natural resources and the protection of the environment.
Accountability
Accountability is a key requirement of good governance. Not only governmental
institutions but also the private sector and civil society organizations must be
accountable to the public and to their institutional stakeholders. Who is accountable to
whom varies depending on whether decisions or actions taken are internal or external
exchange rate policies. Many governments face the challenge of regulating money
supply, while pursuing expansionary fiscal policies to encourage investment. In such
situations, if monetary policy is too accommodating, inflationary pressures can put
investor confidence at risk, thus defeating the very objective of the fiscal policy. In
some countries, managing the fiscal deficit may be made more difficult by
compulsions to bail out a politically manipulated banking sector. Granting greater
autonomy to the central bank is one way that governments can signal investors that
macroeconomic policy will be prudent and sound. Insulating economic ministries
from political pressures can have similar benefits, but may be even more difficult to
achieve.
Interlinkages among the elements of governance
Conceptually, the four elements of governance indicated above tend to be mutually
supportive and reinforcing. Accountability is often related to participation, and is also
the ultimate safeguard of predictability and transparency. In the absence of
accountability to affected groups, even predictable decision making of autonomous
government agencies may result in the latter placing agency interests above those of
the former. Similarly, transparency and information openness cannot be assured
without legal frameworks that balance the right to disclosure against the right of
confidentiality, and without institutions that accept accountability. Again,
predictability in the functioning of the legal framework would be helpful for ensuring
the accountability of public institutions. At the same time, predictability also requires
transparency, because without information about how similarly placed individuals
have been treated, it may be difficult to ensure adherence to the rule of equality before
the law. Finally, a transparent system facilitates governmental accountability,
participation, and predictability of outcomes.
How are good governance and human rights linked?
Good governance and human rights are mutually reinforcing. Human rights principles
provide a set of values to guide the work of governments and other political and social
actors. They also provide a set of performance standards against which these actors
can be held accountable. Moreover, human rights principles inform the content of
good governance efforts: they may inform the development of legislative frameworks,
policies, programmes, budgetary allocations and other measures.
On the other hand, without good governance, human rights cannot be respected and
protected in a sustainable manner. The implementation of human rights relies on a
conducive and enabling environment. This includes appropriate legal frameworks and
institutions as well as political, managerial and administrative processes responsible
for responding to the rights and needs of the population.
The links between good governance and human rights can be organized around four
areas:
Democratic institutions
When led by human rights values, good governance reforms of democratic institutions
create avenues for the public to participate in policymaking either through formal
institutions or informal consultations. They also establish mechanisms for the
inclusion of multiple social groups in decision-making processes, especially locally.
Finally, they may encourage civil society and local communities to formulate and
express their positions on issues of importance to them.
Service delivery
In the realm of delivering state services to the public, good governance reforms
advance human rights when they improve the states capacity to fulfil its
responsibility to provide public goods which are essential for the protection of a
number of human rights, such as the right to education, health and food. Reform
initiatives may include mechanisms of accountability and transparency, culturally
sensitive policy tools to ensure that services are accessible and acceptable to all, and
paths for public participation in decision-making.
Rule of law
When it comes to the rule of law, human rights-sensitive good governance initiatives
reform legislation and assist institutions ranging from penal systems to courts and
parliaments to better implement that legislation. Good governance initiatives may
include advocacy for legal reform, public awareness-raising on the national and
international legal framework and capacity-building or reform of institutions.
Anti-Corruption
In fighting corruption, good governance efforts rely on principles such as
accountability, transparency and participation to shape anti-corruption measures.
Initiatives may include establishing institutions such as anti-corruption commissions,
creating mechanisms of information sharing, and monitoring governments use of
public funds and implementation of policies.
Good governance, human rights and development
The interconnection between good governance, human rights and sustainable
development has been made directly or indirectly by the international community in a
number of declarations and other global conference documents. For example, the
Declaration on the Right to Development proclaims that every human person and all
people are entitled to participate in, contribute to, and enjoy economic, social,
cultural and political development (article 1). In the Millennium Declaration, world
leaders affirmed their commitment to promote democracy and strengthen the rule of
law as well as to respect internationally recognized human rights and fundamental
freedoms, including the right to development. According to the United Nations
strategy document on the millennium development goals (MDGs), entitled The
United Nations and the MDGs: a Core Strategy', "the MDGs have to be situated
within the broader norms and standards of the Millennium Declaration," including
those on human rights, democracy and good governance.
The concept of good governance in the main international human rights instruments
From a human rights perspective, the concept of good governance can be linked to
principles and rights set out in the main international human rights instruments.
Article 21 of the Universal Declaration of Human Rights recognizes the importance of
a participatory government and article 28 states that everyone is entitled to a social
and international order in which the rights and freedoms set forth in the Declaration
can be fully realized. The two International Covenants on Human Rights contain
language that is more specific about the duties and role of governments in securing
the respect for and realization of all human rights. Article 2 of the International
Covenant on Civil and Political Rights requires states parties to respect and to ensure
the rights recognized in the Covenant and to take the necessary steps to give effect to
those rights. In particular, states should provide an effective remedy to individuals
when their rights are violated, and provide a fair and effective judicial or
Conclusion
Good governance is a concept that has come into regular use in political science,
public administration and, more particularly, development management. It appears
alongside such terms such as democracy, civil society, participation, human rights and
sustainable development. In the last decade, it has been closely associated with the
public sector reform.
Good governance has 8 major characteristics. It is participatory, consensus oriented,
accountable, transparent, responsive, effective and efficient, equitable and inclusive
and follows the rule of law. It assures that corruption is minimized, the views of
minorities are taken into account and that the voices of the most vulnerable in society
are heard in decision-making.(5) (OECD, 2001).
Good governance as a concept has steadily entrenched itself in the political and
development discourse. It has permeated all sectors and become part of the
common shared principles and virtues of different countries in the world. It has
attained universality as an indicator of adherence to democracy and rule of law.
There is a danger, however, that good governance has become a catchword and that
few bother to consider its implications. Good governance is given a broad definition
that encompasses an array of issues in the socio-political and economic order of a
country.
The United Nations Committee for Development Planning in its report issued in 1992
entitled Poverty Alleviation and Sustainable Development: Goals in Conflict?
identified the following as being part of the attributes of good governance:
1. Territorial and ethno-cultural representation, mechanisms for conflict resolution
and for peaceful regime change and institutional renewal;
2. Checks on executive power, effective and informed legislatures, clear lines of
accountability from political leaders down through the bureaucracy;
3. An open political system of law which encourages an active and vigilant civil
society whose interests are represented within accountable government
structures and which ensures that public offices are based on law and consent;
4. An impartial system of law, criminal justice and public order which upholds
fundamental civil and political rights, protects personal security and provides a
context of consistent, transparent rules for transactions that are necessary to
modern economic and social development;
5. A professionally competent, capable and honest public service which operates
within an accountable, rule governed framework and in which the principles of
merit and the public interest are paramount;
6. The capacity to undertake sound fiscal planning, expenditure and economic
management and system of financial accountability and evaluation of publicsector activities;
7. Attention not only to central government institutions and processes but also to
the attributes and capacities of sub-national and local government authorities and
to the issues of political devolution and administrative decentralisation.
It encompasses a broad agenda that includes effective government policies and
administration, respect for the rule of law, protection of human rights and an
effective civil society. However, it is imperative to point out that it is not confined
only to political and social issues but also includes proper management of the
economy as well as transparency and fair competition in business. In this broad
definition of good governance sustainable development, especially in relation the
utilization of natural resources and environmental management, is also part of it.
Good governance, to be effective and sustainable, must be anchored in a vigorous
working democracy which respects the rule of law, a free press, energetic civil society
organizations and effective and independent public bodies such as the
Commission for Human Rights and Good Governance, Prevention of Corruption
Bureau and the Fair Trade Commission. The Commission is important in ensuring the
promotion and protection of human rights, but also in ensuring both transparency
and accountability on the part of the government. Good governance requires
transparency and efficiency also in different government agencies.
At the political level democratic practices, including transparency in policy making
and administration, are important aspects of good governance. This is signified by a
pluralistic political system that allows the existence of diversity in political and
ideological opinions. No wonder that good governance is said to be more easily
achieved and guaranteed in a multi-party system than in a mono-party system. It
also means the holding of regular elections applying the principle of universal
franchise. In order to qualify as democratic, elections must be free and fair.
Good governance deals with the nature and limits of state power. The doctrine of the
separation of powers is therefore relevant in the establishment of whether or not a
country has a political system that is responsive to good governance. The doctrine of
the separation of powers is based on the acceptance that there are three main
categories of government functions: legislative, executive, and judicial.
Corresponding to these are the three main organs of government in a state - the
Legislature, the Executive and the Judiciary. The doctrine insists that these three
powers and functions of government in a free democracy must be kept separate and
exercised by separate organs of the state.
Today the doctrine should be taken to mean checks and balances based on a
constitutional scheme. What is important today is not the separation of powers
but checks and balances. It is one of the functions of the Parliament to
check the Executive. This is done by various means, including the authorisation of
the budget, the scrutiny of government expenditure and the questioning of the
government in parliament to account for its actions. It is the duty of the Judiciary to
protect the constitution by seeing to it that the laws of the country are not contrary
to the constitution. The Judiciary stands between the citizens and the state as a
balance against executive excesses or abuse of power, the transgression of
constitutional or legal limitations by the Executive as well as the Legislature. This is
why the Judiciary, as the custodian of the constitution, is empowered to declare an
Act of Parliament as unconstitutional and therefore null and void. It also has the
power of finding government action to be an infringement of the constitution. This
has been brought about by the incorporation of fundamental freedoms and rights of
the individual popularly known as the Bill of Rights in the constitution. This has
resulted in the Constitution being supreme to the extent that powers of the judiciary
extends to examining the validity of even an amendment to the constitution as it has
been repeatedly held that no constitutional amendment can be sustained which
violates the basic structure of the Constitution. The structure of the constitution
includes separation of powers.
Another equally important part of good governance is the promotion and protection
of human rights. For this to be effective the rights and freedoms must be enshrined
in the Constitution. This covers political and civil rights and they range from the right
to life to freedom of expression. The courts of law should be independent to be able
to enforce the rights of the individual vis--vis the state. Currently the issue
of good governance is widely regarded as one of the key ingredients for poverty
reduction and sustainable development. It can be achieved in an enabling economic
environment responsive to the basic needs of the people. It requires sound economic
management and the sustainable use of resources as well as the promotion of
economic and social rights.
References:
(1) Websters New Universal Unabridged Dictionary, London: Dorset & Baber, 1979.
(2) Managing Development: The Governance Dimension, World Bank, June 1991.
(3) Doc. R158-94, ADF VI: Progress Report, 7 April 1994 (para. 92).
(4) The specific areas of action in which these elements of good governance will be
applied are dealt with in the chapter "Promoting the elements of good governance in
Bank operations".
(5) This definition of good governance is taken from an OECD e-book
entitled Citizens as Partners - Information, Consultation and Public Participation in
Policy-Making
Internet Links:
1. http://www.unescap.org/pdd/prs/ProjectActivities/Ongoing/gg/governance.asp
2. http://www2.ohchr.org/english/issues/development/governance/
3. http://portal.unesco.org/ci/en/ev.phpURL_ID=5205&URL_DO=DO_TOPIC&URL_SECTION=201.html
Notes:
The Regulation of Private Monopoly in Developing Countries, Price Waterhouse,
London, April 1994.
A uniform tariff rate (where merchants know exactly what customs duty payment is
required) is preferable, on this ground, to multiple tariff rates that offer customs
officials discretion over the classification of goods.
Bibliography
1. Promoting good governance: principles, practices and perspectives- Sam
Agere
2. Good Governance, Management in Government- O.P. Minocha
3. Public Administration: Administrative Theories and Concepts- Dr. B.L Fadia
& Dr. Kuldeep Fadia
4. R. Balasubramanium, The role of the State and administration: The emerging
scenario.
5. The World Bank, Governance and Development, Washington D.C.,1992
6. New horizons of public administration- Mohit Bhattacharya
7. The Organisations for Economic Cooperation and Development (OECD),
Multilateral Agreement Paper, October 1997.
ANNEXURES
ANNEX I
To conclude, it is clear that the concept of governance has over the years
gained momentum and a wider meaning. Apart from being an instrument of
public affairs management, or a gauge of political development, governance
has become a useful mechanism to enhance the legitimacy of the public
realm. It has also become an analytical framework or approach to
comparative politics.
ANNEX II
also considers the political, social and economic aspects of the concept. Governance is
thus defined as "the use of political authority and exercise of control in society in
relation to the management of its resources for social and economic development".**
This fairly general definition reflects both the role of public authorities in creating the
framework for the activities of economic agents and in making decisions about the
distribution of benefits, as well as the nature of the relationship between government
and the governed.
Governance has the following attributes: accountability, efficiency and effectiveness,
independent legal framework, responsible and equitable administration at all levels of
government.
UNDP
UNDP defines the concept of governance by relating it to that of sustainable human
development. Thus, Under the parameters of Sustainable Human Development, sound
governance has come to mean a framework of public management based on the rule of
law, a fair and efficient system of justice, and broad popular involvement in the process
of governing and being governed. This requires establishing mechanisms to sustain the
system, to empower people and give them real ownership of the process.
Governance is also defined as the exercise of political, economic and administrative
authority to manage a society's affairs. It is a broad concept that encompasses the
organizational structures and activities of central, regional and local government, the
parliament and the judiciary and the institutions, organizations and individuals that
comprise civil society and the private sector insofar as they actively participate and
influence the shaping of public policy that affects people's lives.
Asian Development Bank
The Asian Development Bank is the only development bank that has developed a
policy on governance. It focuses primarily on the social and economic aspects of
governance, and identifies the following basic components: accountability of the
public sector, participation of the private sector, predictability of the legal framework
and public policy, transparency of information, and clarity of regulations and policies.
According to the Bank, governance refers to the institutional context in which citizens
interact among themselves and with government agencies. Even though policy issues
are important to development, the concept of governance as defined by the Bank
basically focuses on the ingredients of effective management. The Bank sees
governance as being synonymous with effective management of development.
The Bank's analytical framework for dealing with governance issues distinguishes
between the components of governance and specific areas of activity for promoting it
(such as public-sector management).