The debate about good governance

By: | Published: January 11, 2015 1:40 AM

Prime Minister Narendra Modi constantly talks up his commitment to good governance...

Prime Minister Narendra Modi constantly talks up his commitment to good governance as his development mantra. So far, his record has been ‘governance by ordinance’, which is hardly in keeping with the accepted definition of good governance, but, as the Chinese say, “black cat or white cat, if it can catch mice, it’s a good cat”. Thanks to Modi, however, the phrase ‘good governance’ has become fashionable again, but what exactly does it mean? Good governance is a term that has become a part of the vernacular of a range of development institutions and other actors in the international arena. What it means precisely has not been so well-established. In an oft-cited quote, former UN secretary-general Kofi Annan noted that “good governance is perhaps the single-most important factor in eradicating poverty and promoting development”.

However, in a landmark paper, author and an expert on the economies of developing countries, Rachel Gisselquist, highlighted the problem of conceptual clarity when it comes to “good governance” and went on to explain why this is problematic for the practical outcomes that development institutions are trying to achieve. There has, she analysed, never been a widespread consensus on “good governance” and it remains an extremely elusive objective.

It means different things to different organisations. The World Bank’s work on good governance addresses economic institutions and public sector management, including transparency and accountability, regulatory reform, and public sector skills and leadership. The United Nations highlights democratic governance and human rights, aspects avoided by the Bank. The IMF declares that “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, are essential elements of a framework within which economies can prosper.” Governance experts routinely focus on other types of governance—global governance, corporate governance, IT governance, participatory governance and some others— which may be related only peripherally to the good governance agenda as it concerns domestic politics and administration. The vision of good governance promoted by aid donors and the international community always focused on liberal and democratic, in short, western democracies. The general belief was that better governance would follow when states became more democratic, more accountable, more transparent and more bound by the rule of law.

Now, in the wake of the global economic downturn, that concept has taken a severe beating. In a research paper he did for the Institute for Development Studies (IDS), political economist Mick Moore presented an emerging view: “One of the more prominent themes in the governance debate in the next few years is likely to be some rather energetic pointing of fingers by people from the global south at the poor quality of governance—especially economic governance—in what we used to call the West.” Moore went back in history, two decades ago, when the West “thought that it knew and practised the best recipes for promoting economic growth”. That recipe, he goes on to explain, ignored the countries in east Asia that were doing very well economically using somewhat different recipes. Back then, those were seen as special cases and had no impact on the accepted norms of good governance. Moore then goes on to show how different the world looks now: “Most of the economies of the old West are in deep trouble. They are close to stagnant. Most of the rest of the world is still growing. But rates are decelerating, dragged down in large part by the mediocre performance of the old West. And that, in turn, owes a great deal to bad governance: to the inability of the governments of the old West to prevent pressure group and electoral politics from undermining economic performance.” He ends with this telling conclusion: “If governance concerns do disappear from the development agenda, it will mainly be because of their roots in the western countries that are now so conspicuously

unable themselves to practise what they used to preach to others.”

It’s abundantly clear that all countries, north and south, face severe governance challenges. A number of emerging economies have shown that it is possible to reach high standards of governance without having joined the ranks of wealthy nations. The key question is how long it takes for governance to improve. The general view based on research is that while governance may deteriorate quickly, improvements are always slow and incremental. The question of “how to improve governance?” is, of course, the most pressing from an Indian perspective, one that Modi is currently grappling with. That seems a more relevant issue than mere lip service to “good governance”, which has become a catchy shorthand to describe a variety of political and economic institutions and outcomes. It all boils down to one essential: the capacity of governments to formulate policies and have them effectively implemented. Now, with China’s economy faltering, the Eurozone in deep trouble and the euro on a slide, ditto for Russia and the rouble, and most nations struggling to adjust to the sharp sudden fall in oil prices, the phrase ‘good governance’ has been turned on its head. Perhaps it’s time that “how to improve governance?” replaces the clearly outdated “good governance” for all countries, rich or poor.

The writer is Group Consulting Editor, Features & Special Projects, The Indian Express

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