Governance and Development

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Governance and Development
Julius Court, ODI jcourt_at_odi.org.uk http//ww.odi.
org.uk/wga_governance/
Without progress in governance, all other
reforms will have limited impact. (Commission
for Africa, 2005)
QEH, University of Oxford, May 2006
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Overseas Development Institute

• Britains leading development Think Tank
• 9m, 70 researchers
• Policy Research / Advice / Public Debate
• Rural / Humanitarian / Poverty Aid / Economics
  (HIV, Human rights, Water)
• DFID
• Civil Society , Parliament, WB, EC
• DC Governments

See www.odi.org.uk
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Governance and Development

• Rationale Why does this matter?
• What is governance? What does theory tell us?
• Governance and Development
• How does governance vary? (What did we do? Why?
  What did we find?)
• What are the priorities?
• What are the implications for aid policy?
• Q A

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Governance Overloaded?
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Priority Given to Governance

• "The issue of good governance and capacity
  building is what we believe lies at the core of
  all of Africas problems." (CFA, 2005)
• good governance is perhaps the single most
  important factor in eradicating poverty and
  promoting development. (UN SG, Kofi Annan)
• Of all the ills that kill the poor, none is as
  lethal as bad government. (The Economist)

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Governance Failures (prox)

• Corruption
• Low quality education and health
• Stifling regulation
• Incompetent public administration
• Slow, costly justice
• Little state accountability
• (weak development performance)
• (Keefer, 2006)

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What are the problems?

• Governance concept is broad
• Donor uses vary with mandate
• Politically contested (what is good)
• Difficult to measure (eg compared to economic
  issues)
• Lack of systematic understanding (what priorities
  where how to improve)
• Donors struggling (Kenya, Uganda, Ethiopia)

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Governance and Development

• Rationale Why does this matter?
• What is governance? What does theory tell us?
• Governance and Development
• How does governance vary? (What did we do? Why?
  What did we find?)
• What are the priorities?
• What are the implications for aid policy?

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What is Governance?
The form of political regime the process by
which authority is exercised in the management of
a countrys economic and social resources for
development capacity of governments to design,
formulate, and implement policies and discharge
functions. The exercise of economic and
political and administrative authority to manage
a countrys affairs at all levels. Governance
refers to the formal and informal rules that
regulate the public realm the space where state
as well as economic and societal actors interact
to make decisions.
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What is Governance?

• Development discovered governance in 1989.
• Not a new concern! (Aristotle, Ancient China,
  etc)
• Consensus
• More than just government
• State plus relations between state and society
• Process-oriented how not just what is done.
• NB Problems.

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Arenas of Governance
Civil Society the ways citizens raise and
become aware of political issues Political
Society the way interests in society are
aggregated in the political process Executive
stewardship of the system as a whole (by
government) Bureaucracy the way policies are
implemented Economic Society the relationship
between the state and the market Judiciary the
way disputes are settled (based on functional,
systems approach)
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Principles of Good Governance

• Participation involvement ownership by
  stakeholders
• Fairness do rules apply equally to everyone in
  society
• Decency rules are implemented without harming
  people
• Accountability political actors are responsible
  for actions
• Transparency clarity and openness of
  decision-making
• Efficiency use of limited resources for greatest
  outputs.
• Lead to state legitimacy and effectiveness
• NB other principles and tradeoffs

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Governance and Development

• Rationale Why does this matter?
• What is governance? What does theory tell us?
• Governance and Development
• How does governance vary? (What did we do? Why?
  What did we find?)
• What are the priorities?
• What are the implications for aid policy?

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Analytical Framework
Governance Realm
Development (after Sen)
Determinants

• Arenas
• Civil Soc
• Political Soc
• Executive
• Bureaucracy
• Economic Soc
• Judiciary

• Context
• History
• Political
• Economic
• Social
• International

• Outcomes
• Human Security
• Political Rights
• Economic Dev
• Human Capital
• Trust

Complex, two way con-inst dem unclear
gov-growth clear
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Governance - Development
GDP per Capita
Infant Mortality
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Unpredictable policy lowers investment growth
A special Private Sector Survey conducted for the
1997 WDR The State in a Changing World allowed
for construction of Governance Credibility index,
measured by perception of 4000 firms in 67
countries on (i) protection of property rights
(ii) judicial reliability (iii) predictability
of rules and (iv) control of corruption.
Investment share in GDP,
GDP/capita growth rates,
Governance Credibility
From Leipziger (2006)
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Governance and Development

• Rationale Why does this matter?
• What is governance? What does theory tell us?
• Governance and Development
• How does governance vary? (What did we do? Why?
  What did we find?)
• What are the priorities?
• What are the implications for aid policy?

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How? Data Collection

• Dozens of agencies 100s of indicators
• Objective Data Often limited not helpful
• Subjective (Take Care!)
• Aggregate (Kaufmann)
• International Panels (Freedom House)
• Household / Public Opinion Surveys (DIAL)
• In-country Panel of Experts (WGA)
• Principles Triangulate Know Source etc

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WGA Assessment Instrument

• Six Dimensions x Six Principles
• 30 Pilot Indicators (36 in current round)
• Questionnaire (1-5 rating comments)
• c35-40 WIPs cross-section (100 in current round)
• NB Tested for reliability validity.
• Plus qualitative views on key challenges
  priorities for reform in each country.

(MSoG Book 16 Countries / 51 of worlds
population)
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What does the WGA add?

• Cohesive, theory driven framework
• Beyond liberal democracy
• Focus on process (how things are done)
• Draws on in-country stakeholders / experts
• Systematic ratings plus qualitative insights
• Shows change over time
• Cost effective
• Transparent
• Capacity development built in.

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WGA Assessment Instrument
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WGA Governance Scores, 1995 2000
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WGA Arenas in India
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Civil Society Indicators in Argentina
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Key Aggregate Findings

• Not all high-scoring governance countries are
  also the most democratic.
• High governance scores are possible in poorer
  countries.
• Civil Society, Government, and Economic Society
  have scores considerably above the other three.
• Political Society, Bureaucracy, and Judiciary
  stand out as the more problematic governance
  arenas. ( reform takes a long time).
• Reform is political as much as technical.

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Governance and Development

• Rationale Why does this matter?
• What is governance? What does theory tell us?
• Governance and Development
• How does governance vary? (What did we do? Why?
  What did we find?)
• What are the priorities?
• What are the implications for aid policy?

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Good Enough Governance
Supply Market Demand /
Interlinkages
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Foundation Indicators
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In Reality

• What is the current governance situation?
• Where are reforms feasible?
• How develop local approaches?
• You dont need to be rich

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Governance and Development

• Rationale Why does this matter?
• What is governance? What does theory tell us?
• Governance and Development
• How does governance vary? (What did we do? Why?
  What did we find?)
• What are the priorities?
• What are the implications for aid policy?

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Aid Policy Topics

• What are governance priorities? (effective?)
• Does governance matter for other development
  interventions? Without progress in governance,
  all other reforms will have limited impact. (CFA
  MDG)
• Governance and aid modalities? (projects vs DBS)
• How to include governance considerations in
  cross-country allocations, selectivity and fast
  tracking? (donors only)
• Supporting international / global treaties
  initiatives towards key principles. EITI.

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2006 White Paper

• governance white paper
• CAR framework taking politics more seriously.
• minimum standards direction of travel
• Quality of governance assessments (Ken, Ug, Eth)
• (Drivers of change)
• Implementation

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Conclusions

• Yes, governance matters. We have put forward (and
  want feedback on)
• a cohesive framework
• a new way of conducting assessments
• ideas about a core governance agenda improving
  governance
• implications for aid policy
• Key next steps
• more research on what worked and how to improve
  governance
• build local capacity in DCs and conduct
  assessments (spur discussions in places it
  matters most).
• Implementing more rigorous assessment-based aid
  policy.

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Any Questions?