1. An Introduction to Good Governance The concept of good governance in the modern world is not even 25 years old. However, in India, this concept is as old as the Indus Valley Civilisation, which continued to be practised even after Kautilya for many centuries. Contemporary Western aid and overseas development policies have three defining features: 1. The aim of aid has been to promote open, market- friendly and competitive economies. This policy was embodied in the conditionality of structural adjustment lending, developed in the 1980s. Later, in the 1990s, two further features have been added to structural adjustment. 2.Support for democratisation 3.Improvement of human rights records.

2. An Introduction to Good Governance Development assistance in the Third World countries, in the post Cold War era has thus been subjected to the new politics of good governance. In 1989, the concept of governance was for the first time highlighted in a World Bank document on Sub-Saharan Africa. The good governance at that time was meant sound development management. Four Key Dimensions: 1.Public sector management 2.Accountability 3.Legal framework for development 4.Information and transparency

3. An Introduction to Good Governance The bank documents Sub-Saharan African say: Improving governance would begin with an assessment of the institutional environment (with emphasis on key governance elements of accountability, rule of law, openness, and transparency), which determines the patrimonial profile of the country: high when other factors are absent and low when they are present. The World Bank Prescription The bank document entitled “Governance and Development” (1992) says, “Governance is defined as the manner in which power is exercised in the management of a country’s economic and social resources for development.”

4. An Introduction to Good Governance From its lending experiences 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 policy.” Three distinct aspects are identified in the conceptualisation of governance: 1.The form of political regime (Parliamentary or presidential, Military or civilian, Authoritarian or democratic) 2.The process by which authority is exercised in the management of country’s economic and social resources. 3.The capacity of government to design, formulate and implement policies, and in general, to discharge government function.

5. An Introduction to Good Governance The first aspect, it is admitted, falls outside the bank’s mandate, the focus of government is basically on the second and the third aspects. Recounting its wide experience, the bank document narrates vividly the problem of governance, e.g. despite technical soundness, programme and projects have often failed to produce desired results. Laws are not enforced properly and there are often delays in implementation, absence of proper accounting systems, budgetary policy cannot be implement or monitored etc.

6. An Introduction to Good Governance Moreover, procurement system encourages corruption and distorts public investment priorities. Failure to involve beneficiaries and other affected in the design and implementation of the project has often led to substantial erosion of their sustainability. There are many cases of malgovernance in developing countries. Economic, human and institutional development are important in brining sound development management.

7. An Introduction to Good Governance The bank document sums up the conditionality of good governance. “Governance is a continuum, and not necessarily unidirectional: it does not automatically improve over time. Its is a plant that needs constant tending. Citizens need to demand good governance. Their ability to do so is enhanced by literacy, education, and employment opportunities. Governments need to improve responsive to those demands. Neither of these can be taken for granted.”

8. An Introduction to Good Governance Change occurs sometimes in response to external or internal threats, e.g. Egypt (external threat), Nepal (internal threat). Occurs through pressure from different interest groups some of which may be in the form of populist demands, e.g. Republic Nepal. Lenders and aid agencies and other outsiders can contribute resources and idea to improve governance. However, for change to be effective it must be rooted firmly in the societies concerned and cannot be imposed from outside.

9. An Introduction to Good Governance Conventionally, the World Bank has been concerned with technical and economic solutions. But in practice, this is a kind of ‘technicist illusion’. Governance is sought to be detached from the turbulent world of politics and the structure and purpose of the State.

10. An Introduction to Good Governance The key components was identified as: - legitimacy of government; - accountability of political and official elements of government; - competence of governments to make policy and deliver services; and - respect for human rights and the Rule of Law (including individual and group rights and security, a legal framework for economic and social activity, and participation)

11. An Introduction to Good Governance The combined efforts of the aid-giving countries and the international funding agencies is that entitlement to aid would depend on: - degree to which a client country would be having a liberal state -a pluralist polity - legislatures are constituted through free and fair elections