2. Governance theories
2.1. Governance as theory
2.1.2. Good governance
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most efficient level of governance.”49 In the end, a general definition of governance includes all of the abovementioned aspects. If we define governance “as the traditions and institutions that determine how authority is exercised in a particular country,”50 most of the phenomena mentioned in this chapter will have been taken into account.
2.1.2. Good governance
Good governance signifies governance in a normative sense. That means that “the juxtaposition of „good‟ augments the essentially evaluative nature of the concept.”51 Good governance has become popular in several international institutions as a key tool to evaluate governments. Most notably, international financial institutions such as the IMF and the World Bank have applied good governance to evaluate institutionalizing processes in terms of effectiveness, efficiency, transparency and accountability of governments.52 Financial institutions and Western governments were the first to link development assistance to governance issues.53 With the idea of good governance, the international organizations aim to create processes and mechanisms for enhancing government quality. Good governance acts as a legal framework for development. Better accountability, transparency and decentralization are the key elements of this process. Some Western governments “interpret the term more broadly to embrace also the processes of democratization, respect for human rights, and socioeconomic equity.”54
In the normative aspect of good governance, „good‟ refers to some rules that are considered necessary for sustainable development,55 meaning that good governance
49 Lisa L. Martin, "The Leverage of Economic Theories - Explaining Governance in an
Internationalized Industry","Governance in a global economy: political authority in transition" (eds.) Kahler and Lake, (Princeton, New Jersey: Princeton University Press, 2003), 35.
50 Cheung and Schott, "Governance and public sector reforms in Asia: paradigms, paradoxes and dilemmas", 4.
51 Howell, "Governance Matters: Key Challenges and Emerging Tendencies", 1.
52 Ibid.
53 Howell, "Getting to the Roots: Governance Pathologies and Future Prospects", 233.
54 Howell, "Governance Matters: Key Challenges and Emerging Tendencies", 1.
55 Daniel Kaufmann and Aart Kraay, "Governance Indicators: Where Are We, Where Should We Be Going?," International Bank for Reconstruction and Development, (2007).
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should be established.56 The OECD 57 has defined six criteria of good governance:
rule of law, accountability, transparency, efficiency and effectiveness, responsiveness, and forward-vision.
The idea that good governance leads to development and economic growth is widespread not only among scholars but also in development agencies. The
“possibility that open and inclusionary institutions take more human and financial capital to run successfully58” is one of the assumptions. Grindle59 has taken a different critical standpoint. According to Grindle, taking good governance as a guide to development is problematic for several reasons. Firstly, governments in developing countries have often low legitimacy and venal leadership. Civil society, to the extent that it exists at all, struggles with being disenfranchised and may be divided. Under such circumstances, the ideas of good governance are barely workable. “In such contexts, getting good governance as a route toward poverty reduction can overwhelm the commitment of even the most energetic reformers.”60 Secondly, most of the policies proposed on the basis of good governance approaches are ahistorical and are in large measure incompatible with regional characteristics. Thirdly, the study of developed countries offers no evidence that good governance is an essential condition for development. Studies suggest “that economic development occurred long before countries had fully institutionalized democracies, professional bureaucracies, rules for corporate governance, modern financial institutions, and extensive social welfare services.”61 The essential requirements of good governance of transparent and accountable institutions were not necessary conditions for economic and industrial development.
56 Goldsmith, "Is Governance Reform a Catalyst for Development?," 165.
57 OECD, "China in the Global Economy: Governance in China", 43.
58 Goldsmith, "Is Governance Reform a Catalyst for Development?," 182.
59 Merilee S. Grindle, "Good Enough Governance: Poverty Reduction and Reform in Developing Countries," Governance: An International Journal of Policy, Administration, and Institutions, Vol. 17, No. 4 (2004), 525.
60 Ibid., 526.
61 Ibid., 531.
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Instead of a „full program‟ of good governance, Grindle has proposed a proper concept of „good enough governance‟, which she defines as “a condition of minimally acceptable government performance and civil society engagement that does not significantly hinder economic and political development and that permits poverty reduction initiatives to go forward.”62
A reduced agenda for good governance requires tackling the problem of choosing which reforms of good governance would be reasonable to introduce. That requires a broad knowledge of the possibilities of how particular goals, such as poverty reduction, can be achieved. The lack of sufficient information about how strategies can be implemented makes good governance for a wide range of countries only “a distant possibility63” of what can be done in actuality.
Gindles‟ concept of good enough governance has some implications for which part of development we should focus upon. The idea is that some governance deficits are less important and do not require too much attention. Grindle “suggested that good enough governance directs attention to considerations of the minimal conditions of governance necessary to allow political and economic development to occur.”64 Nevertheless, good governance remains an important guideline for a wide range of areas of the development community, despite the fact that numerous questions remain unanswered, especially the question of which institutions matter most. It is not likely that the World Bank and other lenders to the „Third World‟ will change their policies regarding good governance any time soon.
62 Ibid., 526.
63 Ibid., 543.
64 Merilee S. Grindle, "Good Enough Governance Revisited," Development Policy Review, Vol. 25, No.
5 (2007), 554.
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