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December 02, 2007

Motherhood, Apple Pie, and Good Governance

Posted by Michel Lazare

Like motherhood and apple pie, we all love good governance. Right?

Indeed, finding somebody --or an institution-- who does not claim to support good governance might be challenging. But defining good governance is equally challenging.

An illustration of this difficulty was given in a December 3, 2007 PFM Blog post, where our colleague Ian Lienert wrote:

A framework for relating the stages of PFM reform with governance categories, ranging from States that are “failing or collapsed” through to “institutionalized and competitive”, was presented. However, it was difficult to pin down the links between PFM reform frameworks and governance, in part because the concepts of “governance” and “political economy” are multi-dimensional and ill-defined.

There is actually no shortage of definitions of governance in general and of good governance in particular. This was clearly demonstrated in an article in the September 2007 issue of the Overseas Development Institute (ODI) journal "Development Policy Review" (Grindle, Merileee  Good Enough Governance Revisited, Development Policy Review  25 (5): 533-574 -- Merilee S. Grindle is the Edward S. Mason Professor of International Development and the Director of the David Rockefeller Center for Latin American Studies at Harvard University).

Table 1 of Merilee S. Grindle's article lists "what is governance" and "what is good governance" for five institutions ( World Bank, UNDP, IMF, DFID, USAID) and three reputed authors (Hyden, Kaufman, and Hewitt de Alcantara).

This table clearly shows that there is little consensus on how to define the concept of governance. While some institutions define the concept rather narrowly, focusing on "economic aspects of governance...in two spheres: improving the management of public resources ...; supporting the development and maintenance of a transparent and stable economic and regulatory environment conducive to efficient private sector activities..."),  others are taking a broad approach. In the latter category, the paper attributes the following definition to DFID: "how the institutions, rules, and systems of the state--the executive, legislature, judiciary, and military -- operate at central and local level and how the state relates to individual citizens, civil society and the private sector." The former (narrower) definition is attributed to the IMF and dated 2005; however, the current version used on the IMF website seems broader. In particular, the page on "The IMF's Approach to Promoting Good Governance and combating Corruption -- A Guide" indicates the following:

The term governance, as generally used, encompasses all aspects of the way a country, corporation, or other entity is governed. It includes the economic-policy interactions that fall within the mandate and expertise of the IMF. Relevant questions with regard to those policies are: their effectiveness; their transparency, and thus the accountability of policy makers; and the extent to which they meet internationally accepted standards and good practices.

There is also a wide variety of definitions of good governance. Table 1 of Merilee S. Grindle's article quotes a 2005 USAID definition: "transparency, pluralism, citizen involvement in decision-making, representation and accountability; focusing particularly on five areas: legislative strengthening, decentralization and democratic local governance, anti-corruption, civil-military relations, and improving policy implementation." It also indicates that according to Hyden and co-authors, good governance " can be measured along five dimensions (participation, fairness, decency, efficiency, accountability and transparency" while Daniel Kaufmann, in a 2003 article, is reported as pointing toward six dimensions: "voice and external accountability; political stability and lack of violence, crime, and terrorism; government effectiveness; lack of regulatory burden; rule of law; control of corruption."

Beyond this variety and lack of consensus on the scope of governance or good governance, two notions, in our view, seem to underpin most definitions in one way or an other: inclusiveness and accountability.

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