Governance

Lecture 5
 What is Governance

 The traditions and institutions by which authority in a country is exercised”

 Governance refers to "all processes of governing, whether undertaken by a
government, market, or network, whether over a family, tribe, formal or informal
organization, or territory, and whether through laws, norms, power, or language. It
relates to processes and decisions that seek to define actions, grant power, and verify
performance.
 The way “ … power is exercised through a country’s economic, political, and social
institutions.”
 History of Governance
 Antiquity, Pharaohs, kings: Ancient Egyptian history is a long and complex one with more than 3,000
years of details. Throughout these 3,000 years ancient Egyptians lived under about 30 dynasties, with
each dynasty being based on the lineage/family of the kings/pharaohs).
 In medieval times-”fall of Imperial Rome and the beginning of the Early modern Europe”. (in
European history, the Middle Ages, or Medieval period, lasted from the 5th to the 15th century): the
need for expert civil servants whose ability to read and write formed the basis for developing
expertise in such necessary activities as legal record-keeping, paying and feeding armies and levying
taxes.
 Prior to 19th century public administrations was rife with nepotism/favoritism and was spoils system.
 In Modern USA Woodrow Wilson(1887) is considered the father of public administration advocated
concepts: Separation of politics and administration, Comparative analysis of political and private,
Organisations efficiency, effectiveness of public service merit-based assessment.
 Separation of Politics with administration is still play imp role however the dominance of this
dichotomy was challenged by second-generation scholars, beginning in the1940s. Gulick gave
public administration concept of; POSDCORB, Fayol gave 14 points for private management
(DIVISION OF WORK, AUTHORITY: DISCIPLINE: UNITY OF COMMAND: UNITY OF DIRECTION:
SUBORDINATION OF INDIVIDUAL INTERESTS TO THE GENERAL INTERESTS: REMUNERATION:
CENTRALIZATION: SCALAR CHAIN: ORDER: EQUITY: STABILITY OF TENURE OF PERSONNEL; INITIATIVE:
SPIRIT DE CORPS):
 History of Governance
 Second-generation theorists drew upon private management practices for
administrative sciences.
 The mid-1940s theorists challenged Wilson and Gulick. The politics-administration
dichotomy remained the centre of criticism in the third generation. In addition to this
area of criticism, government itself came under fire as ineffective in-efficient, and
largely a wasted effort.
 In the late 1980s, New Public Management was proposed by David Osborne and Ted
Gaebler; combination of splitting large bureaucracies into smaller, more fragmented
ones, competition between different public agencies and between public agencies
and private firms and incentivisation on more economic lines. Some critics argue that
the New Public Management concept of treating people as "customers" rather than
"citizens".
 In the late 1990s, Janet and Robert Denhardt proposed digital era governance; It
focuses on themes of reintegrating government responsibilities, needs-based holism
(executing dutiesin cursive ways), and digitalization (exploiting the transformational
capabilities of modern IT and digital storage).
Analytical Framework: Three levels of Governance
Perspectives on Governance

Four common governance arrangements that have existed historically as well

as at present:
1. Hierarchies
2. Markets
3. Networks
4. Communities
 Governance as hierarchies
 Governance conducted by and through vertically integrated state structures is an
idealized model of democratic government and the public bureaucracy.
 In the bureaucratic sphere, the webrian model of the Public service characterized most
of the advanced western democracies. This was essentially governance by law; instead
of bridging the public private border, this type of governance strictly upheld that
distinction.
 The State as epitome of the collective interest separated from society and governed
society through laws and regulations under command and control model.
 The other institutions also entangled in system but State never surrender its legal authority.
 Critics are of the view that the model was suitable when there was Standardized
whereas now emphasis has to be on; smaller scales, flexibility, diversification, informal
exchange rather formal one and sharing power between sate and market. Hence
leading to horizontal model and also due to the role of globalization roles of Global
institutions.
 Further in new dynamics the cities and regions are acquiring more autonomy at the
expense of State.
 However hierarchy still play important role in national and international context; like in
Pakistan Local Govt System was decentralized but now again it rests with Provincial Govt.
Hierarchal Model
Weber Model
Hierarchal Model
 Governance as Markets
 Resource-allocating mechanism or more broadly the employment of monitory criteria to
measure efficiency. In ideal situation neither elected nor mangers can make decisions
alone but more role of public and decisions are made within framework of
overarching/all-embracing policies.
 In perspective of economic; the governance refer to various mechanism in which
economic actors cooperate to resolve common problems.
 The difference between market as governance mechanism and the governance of
market is that in governance of market the actors of market although they compete
each other share problems of coordinating.
 Market Governance Mechanisms (MGMs) are formal or informal rules that have been
consciously designed to change the behaviour of various economic actors - including
individuals, businesses, organisations and governments – to encourage sustainable
development.
 Well known MGMs include fair trade certification, the European Union Emission Trading
System and Payment for Ecosystem Services (PES).
Market Governance Typology
 Governance as networks
 One of the most familiar forms of contemporary governance is policy networks. Such networks
comprise a wide variety of actors, state institutions, organized interests and so on- in a given
policy sector.
 Networks vary considerably with regard to their degree of cohesion, ranging from coherent
policy communities to single-issue coalitions.
 Policy networks facilitate coordination of public and private interests and resources, and in that
respect, enhance efficiency in the implementation of Public Policy.
 Networks in the new governance thus regulate and coordinate policy sectors more according
to the preferences of the actors involved than with consideration to public policy.
 The development from government towards governance- the decreasing reliance on formal-
legal powers- has clearly strengthened the position of the policy networks.
 The relationship between the networks and the state is mutual dependence as network has
expertise and skills help in policy process.
 Sometime the common interest of the networks challenge the state interests.
Network Governance
 Community Governance
 The general idea is that communities can – and should- resolve their
common problems with a minimum of state involvement.
 In a broader perspective, communitarian governance builds on a
consensual image of the community and the positive involvement of its
members in collective matters.
 The communitarian solution to the problem is to organize governance
without government.
 This communitarian view on governance is supported both by those
who think that there is too much and by those who think there is too little
government.
 Communitarian governance seems to resolve common problems and
poster a civic spirit in the community without breeding large public
bureaucracies.
Community Governance
Theories/Models of Governance
Theory/Concept Details
Traditional Authority The starting point for a consideration of governance theories is the traditional idea of top
down authority devolved in the state. Stated simply, government, as the legitimate
embodiment of the general will, or the crown, or whatever the source of authority is
expected to be, is the only possible source of governance in these models.

Communitarianism Communitarianism refers to a theoretical perspective that seeks to lessen the focus on
individual rights and increase the focus on communal responsibilities.

Institutional Theory Govt life revolves around institutions like; legislatures, executives, courts and political
parties. The institutions determined implemented public policies.

Autopsies/Examine & The argument here that society and markets have developed the capacity for self-
Network Steering organization and for eluding (avoiding) any attempts on the part of government control
them.
 Theories/Models of Governance
Rational-Choice Theory Macro/Micro decision making

Chris (2007) Two theories of governance: Stakeholder and Stewardship in context of Neo-Institutional
Theory (focuses on developing a sociological view of institutions — the way they interact and
the way they affect society). The Stakeholder theory presents moral justification for the
management of different groups who affect or are affected by an organization and these
groups priorities their needs but the criteria of prioritization is debatable. Stewardship focuses
gave importance to non-economic factors like trust to attain maximum social benefit. The
legitimacy for such organizations is vital as it may account far the nature and development of
governance arrangements that they adopt to guarantee the legitimacy. Example for
stewardship is: In American politics, an example of the stewardship theory is where a
president practices a governing style based on belief they have the duty to do whatever is
necessary in national interest.
Coase (1960) Advocated the inter-linkage of institutions, good governance and sustainable development.
This means that the institutions play a crucial role in development
Blunt (1995) Pointed out number of requisites for good governance including political legitimacy,
accountability, freedom of association and participation, legal and transparent framework, rule
of law, freedom of information and expression, sound and competent administration, open
institutions, vibrant civil society and respect for human rights.
Theories/Models of Governance
1996, Rhodes Refers that the governance has to do with self-organizing inter-organizational networks that
substitute and complement the functions of hierarchies (i.e. bureaucracies) and markets or co-exist
with them.

In Doornbos (2003) For a long time the word “governance” was not clearly defined in dictionary as usually it refers to
some corporate bodies for the boards of governors related to administration and having less focus
on management. He further pointed out that the concept of good governance was developed for
referring to the way in which; countries, provinces, cities and institutions are being governed.

Najem (2003) gave a broad view of good governance including policies for free economy and conducive
environment for market growth, transparency in decision making for socio-economic economic
uplift, encouragement to civil society and concrete measures to address global challenges like;
education, health and the environment.
Theories/Models of Governance
Arie Halachmi (2005) Distinguished between governing and governance and referred that governing has to do with
control, while governance is related with steering. The governing is state-centered while
governance assumes a polycentric (or at least a decentralized) institutional structure with the
government apparatus as only one of several actors
Roy and Tisdell (2008) Considered that the possibility for good governance depends on institutional structures and the
economic resources available for ensuring governance and the centralized governance
structures are inefficient and unproductive. decentralization has taken three structure: i) “de-
concentration” referring to transferring resources and decision making from headquarters to the
lower level, (ii) “devolution” referring to devolution of resources and power to autonomous units
of government and iii) “delegation” meaning delegation of resources and power to organizations
outside the traditional bureaucratic structures.

Bo Rothstein and Jan While discussing the quality of governance considered effectiveness and efficiency as the most
Teorell (2008) important aspects of the governance.
i) the degree of successful policy implementation—effectiveness—and ii) the amount of
government output delivered relative to input—efficiency.
Esade and Francisco Longo QoG requires the application of a range of criteria which includes: (a) extent to which policies
(2008) are persistent, (b) adaptability of the policies in accordance with the circumstantial changes, (c)
degree of coherence and coordination of policies and actions among the actors who participate in
their design and implementation, (d) quality of implementation and enforcement, (e) degree to
which policies pursue the best public interest, and (f) the extent of efficiency that which policies
reveal an allocation of limited resources that ensures maximum returns.
Theories/Models of Governance
Jan Kooiman (1996)
Gave three theories on governance under various concepts as follows: i) for the World Bank and the
developmental literature, the governance concept is the essence of enlightening its traditional
technical capacity-building scope to a base in which there is room for civil society and its
participation, ii) the second concept is that using governance to develop an extensive theory of
social-political interaction, the basic argument is that since modern societies are diverse, dynamic
and complex, the problems associated with those societies have peculiar characteristics and their
solutions. The traditional problem solving approaches ignore the diversity and can not cope up with
dynamics and complexity and iii) governance serves as a comprehensive concept in the
development of problem-oriented Public Service Management (PSM) theories that are open-
minded with respect to inclusion of pluralistic societal forces.

The international donor (i) the form of political regime: (ii) the process and methods by which authority is exercised and
agencies consider (iii) the capacity of governments to design, formulate, and implement policies and perform
governance in context with functions. Viewed governance more broadly and asserted nature for Good governance is
good governance. characterized by predictable, open, enlightened and transparent policymaking through specialized
bureaucracy.
UNDP, the governance (a) Devolution (b) Strengthening institutions, and (c) Enhancing socio-economic development.
assistance in Pakistan Strong, credible and effective governing institutions those have the ownership of the society posses
required three interventions: the capability to deliver in accordance their mandate are essential pursue sustainable socio-
economic development
 Governance and New Public Management
Governance refers to the development of governing styles in which boundaries between and within public and private
sectors have become blurred. The essence of governance is its focus on mechanisms hence may be regarded as a new set
of managerial tools. It is also about more than achieving greater efficiency in the production of public services. New
Public management is a broad and very complex term used to describe the wave of public sector reforms through-
out the world since the 1980s. The main hypothesis in the NPM-reform wave is that more market orientation in the
public sector will lead to greater cost-efficiency for governments, without having negative side effects on other
objectives and considerations.

• NPM, identified several ways in which public organizations differ from the private sector:
• degree of market exposure—reliance on appropriations
• legal, formal constraints—courts, legislature, hierarchy
• subject to political influences
• coerciveness—many state activities unavoidable, monopolistic
• breadth of impact
• subject to public scrutiny
• complexity of objectives, evaluation and decision criteria
• authority relations and the role of managers
• organizational performance
• incentives and incentive structures
• personal characteristics of employees

Peters and Pierre agree, saying that governance is about process, while NPM is about outcomes
 Governance Systems:
Actors, Capacities and Accountability
Citizens/Firms

Political Actors & Institutions

• Political Parties
• Competition, transparency

Executive-Central Govt
Civil Society
Check &
Citizens/Firms

Citizens/Firms
& Private
Balance
Sector
Institutions Cross-cutting Control
Agencies (Finance, HR) • Civil Society
• Parliament
Watchdogs
• Judiciary
• Media
• Oversight
• Business
institutions
Associations
Service Delivery &
Regulatory Agencies

Subnational Govt &

Communities Outcomes:
Services,
Regulations,
Citizens/Firms
Corruption
 Governance Systems:
When Accountability Breaks Down
Citizens/Firms
State
Political Actors & Institutions Capture
• Political Parties
• Competition, transparency

Executive-Central Govt
PatronagCivil Society
Check &
Citizens/Firms

Citizens/Firms
Balance e& & Private
Institutions Cross-cutting Control
Sector
nepotis • Civil Society
• Parliament Agencies (Finance, HR)
• Judiciary m Watchdogs
• Media
• Oversight
• Business
institutions
administrati Associations
Service Delivery &
ve Regulatory Agencies
corruption

Subnational Govt &

Communities Outcomes:
Services,
Regulations,
Citizens/Firms
Corruption
Worldwide Governance Indicators
 Good Governance Definitions

 The notion of good governance first appeared in a 1989 World Bank Report on
Africa, which defines it as the “exercise of political power to manage nations’
affairs.
 Good governance includes features: an efficient public service; an
independent judicial system and legal framework to enforce contracts;
accountable administration of public funds; an independent public auditor,
responsible to a representative legislature; respect for the law and human rights
at all levels of government; a pluralistic institutional structure (maintain social
order), and a free press
 Managerial approach described in Governance and Development which
treats good governance as “synonymous with sound development
management. (World Bank)
 Good governance is defined as “the manner in which power is exercised in the
management of a country’s economic and social resources for development”.
(Asian Development Bank)
 Good Governance can be seen as the exercise of economic, political and
administrative authority effectively to manage a country’s affairs at all levels.
(UNDP)
Good Governance Framework
Good Governance in Public Sector
 Islamic Governance System in Pursuance of Hazrat Ali Letter to
Governor of Egypt

Hazrat Ali's Famous Epistle To Malik Ashtar, Governor of Egypt the sailent features of letter are following:
 The richest treasure-Good Deed
 The common Man
 The counselors
 The different classes of People
 The Army
 The real guidance
 Chief Judge
 Subordinate Judiciary
 Revenue Administration
 Clerical Establishment
 Trade and Industry
 The Poor
 Open Conferences
 Communion/unity with God
 Aloofness not desirable