Friday, November 02, 2007

Good governance is not a luxury

In this new post, I am sharing some thoughts about governance, which has become one of the most heated debates in both developing and developed countries. I remember being told about the ‘African tree’ by my parents who had the privilege to spend some years breathing clean air in rural areas. Indeed, during that time they used to gather under trees to discuss about various topics and issues in the village. Through those gatherings some chiefs actually used to consult with their subjects. Some scholars have called this the African democracy.

If I get further back into ancient time, we learn that classical tasks of the state have been making war and ensuring internal order. However, the event of modernism has seen the state mostly performing a role of economic transformation and development achievement though still performing its classical roles.

In present times, there is mounting evidence that success in development depends, to certain extent, on internal structures that a state is made of. Many studies such as the one by the sociologist Peter Evans prove enough that differences in the level of development is much due to the nature of states and the kind of relationships states develop with their societies.

As far as sub-Saharan Africa is concerned, the observation is that conditions of empty democracies easing elite to capture many states, failing and under-resourced bureaucracies, corruption, and many other symptoms still prevail. Yet without state, the other master institution of modern society (markets) cannot function (Evans 1995).

On the other hand, “managing an economy is not an easy task, especially in a context of global imperatives, where a country that deviates from the global norm is meted with punishment by global capital. The task is more difficult in a society like ours [South Africa] with conflicting imperatives. … These competing imperatives pose critical challenges for building one nation that belongs to all South Africans. To a large extent, South Africa’s ability to effectively address these imperatives will be dependent on the ability of the ruling party, the African National Congress… (Edigheji, 2005).

However, this long quote should not be taken for excuse. Instead, Africa should learn that the 3 successful post-war development experiences over the world emphasize the role that state apparatuses have played:

  • The Marshall plan, which consisted of funding the post war reconstruction of Europe. Great results where achieved by European states such as France.
  • The East Asian Growth and Development Plan (where US capital inflows helped to generate anti-communist states), and
  • The European Integration Programme (attempt to promote growth and overcome regional inequalities in Europe).

In the East Asian case for instance, the East Asian miracle, countries did not only receive US aid to prevent communist expansion. Well known as the tigers, states played a vital role by:

  • Successfully using financial instruments to channel investment decisions in line with national priorities, hence the concept of state-capitalism;
  • Effectively initiating and presiding industrial transformation, hence the concept developmental state;
  • Surmounting particularistic interest and securing collective goals, hence the concept embedded autonomy.

In the 1990s, the World Bank initiated a research in more than 200 countries to determine prospects of development based on six sectors:

  • Voices and Accounatbility, measuring political, civic and human rights;
  • Political Instability and Violence - measuring the likelihood of violent threats to, or changes in, government, including terrorism;
  • Government Effectiveness - measuring the competence of the bureaucracy and the quality of public service delivery;
  • Regulatory Burden - measuring the incidence of market-unfriendly policies;
  • Rule of Law - measuring the quality of contract enforcement, the police, and the courts, including judiciary independence, and the incidence of crime;
  • Control of corruption.

All the 6 indicators used by the bank relate to governance, that shows how good governance is determinant for development.

In 2005, the World Bank research was released and its main findings indicate that a realistic improvement in just one of the 6 areas within a country, can result in about 300% increase in the national per capita income over the long the term!
Main conclusions of the World Bank report are that:

  • Improved governance leads to higher standards of living and poverty alleviation;
  • Such improvements in governance are realistic;
  • Measuring governance changes over time: significant improvements are feasible;
  • Yet the worldwide reality is sobering: limited progress on average;
  • Demand for rigorously monitoring progress: the power of data.

Hence the Bank to conclude: ‘Yet good governance is not a luxury that only wealthy countries can afford’.

Despite this brief book review one should be aware that I am not an advocate of the World Bank, in fact my empirical study in DRC last year made me side with those still questioning the genuineness of the Bank’s latest policy regarding poverty alleviation, I do respect most of their research findings.

Besides that, the UN Convention against Corruption has just set some institutional arrangements to fight corruption and urges States to appoint bodies to coordinate prevention and enforcement measures (UNDP, April 2006).

All this makes me conclude that the thesis that development’s outcomes in third world depend on the role a state performs is still valid to a certain extent. Thus, good and stable governance, sound macroeconomic policies, pro-poor bureaucracies and service delivery will characterize African countries that are going to make a difference.



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