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Relationship between Governance and


Khondokar Sabera Hamid,

Master in Development Studies (MDS),
Department of Economics,
United International University, Dhaka, Bangladesh.

The relationship between governance and development has raised up the international policy
agenda. There is widespread agreement that governance matters - intrinsically and for
improvements in economic and social outcomes.
Good governance is a precondition for economic development. The quality of governance plays
a vital role in the economic development of countries. The need for good governance is widely
recognized in todays discourses of development.
The IMF has spelled out the relationship between good governance and economic development
in its declaration Partnership for Sustainable Global Growth that was adopted by the IMFs
Interim Committee in September, 1996. It identified "promoting good governance in all its
aspects, including ensuring the rule of law, improving the efficiency and accountability of the
public sector, and tackling corruption" as an essential element of a framework within which
economies can prosper.
Considering Bangladeshs history of tumultuous politics, the country is gradually improving in
terms of political stability and governance. Unfortunately, development has not been stable,
mainly due to political will and commitment. Democracy and governance in Bangladesh, still
plagued by violence, corruption, outdated laws, abuse of human rights, absence of rule of law,
non accountability, and heavy politicization of all government institutions including the judicial
system. It is observed that we need strong political leadership with commitment to fight against
deep rooted corruption, non accountability, non transparency and inefficiency is imperative for
establishing good governance and to ensure sustainable development.
Keeping all these issues in consideration, this term paper discusses governance and good
governance related issues and sustainable development. It also provides a set of
recommendations based on this analysis.

Key Words:
Governance, Development, Good Governance, Sustainable Development, Accountability,
Transparent and Efficient, Aid Policy, Human Development

Governance can be defined as power which exercises for effective conduct of countrys economy
and social resources. The governance is good when it is able to attain this theoretical objective.
Good governance can play a vital role for a healthy and independent economy or culture.
As the economy consists of three organs i.e. economic, political and administrative, the
responsibility of the government then implies careful nursing of these three organs. Economy is a
backbone for any country as well it contributes a lot in development of the countrys
infrastructure, for this purpose government should ensure the proper use of fund through proper
allocation and eliminating frauds. So, the commitment of good governance lies on economic
welfare, resisting political unrest and ensuring the basic needs for the nation through effective
Good governance is more in action where it can overcome all discrimination. Both the genders
should give equal rights to make the effort of good governance more powerful.
Political equality and accountability should exist in the good governance. Political accountability
is linked to human development because it is a necessary condition for democracy. It is a key
requirement of good governance. Not only governmental institutions but also the private sector
and civil society organizations must be accountable to the public and to their institutional
stakeholders. By making corruption more difficult, political accountability contributes to
economic development.
Good governance requires fair legal frame works that are enforced impartially. It also requires
full protection of human rights, particularly those of minorities. In a good governance the rules
and regulations implies should be clear and friendly enough to general public and should also
motivate the nation to follow the implied laws of the country.
Good governance for sound development is a campaign echoed in Bangladesh as across the
world. It is believed that good governance is such types of government process where important
decisions are taken by concerned organizations through a participatory method justifying the
views of the civil society, have accountability and transparency as well as application of rule of
law in every government action.
Bangladesh - a typical developing country in South Asia in terms of a large population, low per
capita income, persistent trade deficit and an economy dominated by agriculture - has
increasingly moved towards a market-based economy since the mid 1970s as a result of
receiving assistance under structural adjustment programs of World Bank, IMF and other donor
nations. Despite this foreign assistance poor governance remains a big challenge for us. It is
observed that both internal and external factors such as politics, public pressure and donor
countrys conditions on reform are slowly generating paradigm shift towards good governance

and sustainable development. However, the paradigm shift towards good governance needs to
pick up more speed to establish as a Bangladesh globally competitive nation.

I used secondary sources (books, reports, collected information from different website) to
prepare this paper.

1. To understand governance and good governance.
2. Understanding the relationship between governance and development.
3. Realizing the key governance conflicts and challenges and the ways to ensure good
4. To understand the importance of good governance.

The word governance derives from the Greek verb [kuberno] which means to steer and was
used for the first time in a metaphorical sense by Plato. It then passed on to Latin and then on to
many languages.
Exercising power and decision-making for a group of people is called governance. Governance is
the act of governing. It relates to decisions that define expectations, grant power, or verify
performance. It consists of either a separate process or part of decision-making or leadership
processes. In modern nation-states, these processes and systems are typically administered by a
Governance is the process of decision-making and the process by which decisions are
implemented (or not implemented). The term governance can apply to corporate, international,
national, local governance or to the interactions between other sectors of society.
Institutional viewpoints of governance:
The World Bank: Governance is defined as the manner in which power is exercised in the
management of a countrys economic and social resources. The World Bank has identified three
distinct aspects of governance: 1) The form of political regime, 2) The process by which
authority is exercised in the management of a country of governments to design, formulate and
implement policies and discharge functions.
United Nations Development Program: Governance is viewed as the exercise of economic,
political and administrative authority to manage a countrys affairs at all levels. It comprises the

mechanisms, processes and institutions through which citizens and groups articulate their
interests exercise their legal rights met their obligations and mediate their differences.
Going beyond the mediating role, another document of UNDP embraces the definition of
governance from political dimension. According to this, Governance is a political issue. It deals
with power relations between central and local governments, between various actors in society
(government, private sector and citizens) and between donor agencies and countries in which
they work. (UNDP- Paragon, 2002)
Organization for Economic Cooperation and Development (OECD): The concept of
Governance denotes the use of political authority and exercise of control in a society in relation
to the management of its resources for social and economic development. This broad definition
encompasses the role of public authorities in establishing the environment in which economic
operators function and in determining the distribution of benefits as well as the nature of the
relationship between the ruler and the ruled.
Asian Development Bank (ADB): The term governance means different things to different
people. It is useful, therefore, for the Bank to clarify, at the very outset, the sense in which it
understands the word. Among the many definitions of governance that exist, the one that
appears the most appropriate from the viewpoint of the Bank is the manner in which power is
exercised in the management of a countrys economic and social resources for development. On
this meaning, the concept of governance is concerned directly with the management of the
development process, involving both the public and the private sectors. It encompasses the
functioning and capability of the public sector as well as rules and institutions that create the
framework for the conduct of both public and private business, including accountability for
economic and financial performance, and regulatory frameworks relating to companies,
corporations and partnerships. In broad terms, then, governance is about the institutional
environment in which citizens interact among themselves and with government agencies/

Difference between Government and Governance:

Government means legislative executive judiciary as three elements of its roles and also includes
law and order machinery. Peoples growing disenchantment with post- colonial government in
delivering rapid socio-economic development of the masses has led to the emergence of the
concept of governance. Governance is seen as the joint responsibility of the governments, private
business and civil society.
According to the governance working group of the International Institute of Administrative
Sciences Governance refers to the process whereby elements in society widely power and
authority and influence and enacts policies and decisions concerning public life and economic
and social development. Governance is a broader notion than Government. Governance involves

interaction between these formal institutions and those of civil society. Governance is as the
traditions and institutions by which authority in a country is exercised. This includes1)the process, by which authority governments are selected, monitored and replaced, 2) the
capacity of the government to effectively formulate and implement sound policies and 3) the
respect of citizens and the state for the institutions that govern economic and social interactions
among them. The conceptualization of the term governance, indeed demands for a full
understanding of what governance is and the difference between government and governance
because there is a common trend of equating government with governance. For this purpose,
both the term governance and government are being defined below.Government is described as
the repository of confidence and power of the people delegated by them for a fixed period of
time for the express purpose of identifying, mobilizing, organizing, guiding and directing all
available resources, human and other, to facilitate planned and participatory transformation of
their society towards enhanced well-being of its people, via just enjoyment of all its needs,
rights, aspirations and sustainable peace. Governments are necessarily political regimes pursuing
a course of development action that they consider as most suited within the construct and form of
their society and its constitution. Government comprises the constitution and laws, institutions
and structures, management mechanisms and administrative processes. These are devolutionary
instruments that make a government participatory and responsive.
Governance, on the other hand, is the sum of cumulative practice of behavior and attitude of the
government as seen in the manner they create and use the said evolutionary instruments.
Form, style, systems, methods and procedures of government generally reflect the pattern of
governance in a nation or city. The quality and effectiveness of governance depend mostly on
how judiciously the government uses the said instruments to help people achieve the ultimate
goal of their progress- justice, equity and peace.

Good Governance:
In general sense good governance means an ideal governing system that is inevitable for
political, economic, social and cultural development of a country. Ideal governing system means
the ideal orientation of a state that works best to achieve self-reliance, sustainable development
and social justice and the ideal functioning of government that operate most efficiently. The true
test of "good" governance is the degree to which it delivers on the promise of human rights: civil,
cultural, economic, political and social rights.
Good governance also includes these elements- participatory, consensus oriented, accountable,
transparent, responsive, effective and efficient, equitable and inclusive and follows the rule of
law. It assures that corruption is minimized, the views of minorities are taken into account and
that the voices of the most vulnerable in society are heard in decision-making. It is also
responsive to the present and future needs of society. In the white paper by the Commission of
the European Communities which suggests that good political governance must be: coherent;
proportional; open; effective; participatory; and accountable.

The Development Assistance Committee (DAC) of the Organization of Economic Co-operation

and Development (OECD) has highlighted several aspects of good governance. Some of these
the promotion of democracy and respect for human right;
the strengthening of transparent, accountable, national and local government;
the reinforcement of rule of law, including fair and accessible legal and judicial systems;
the promotion of independent media and the dissemination of information;
anti-corruption initiatives; and
Efforts to reduce excessive military expenditure.
In essence, good governance can be applied at international, national, local, and organizational
levels and to manage many types of resources. Although terminology may differ, the principles
of good governance as recognized worldwide are similar.

Elements/ Principles of Good Governance:

The principles of good governance may be showed into different ways-------a) A number of multilateral organizations like the United nations, World Bank and OECD
generally equate good governance with sound economic management based on Accountability;
Participation; Predictability; and Transparency.
b) The UNDP (1977) has identified following five basic principles of good governance namely Legitimacy and voice, Direction, Performance, Accountability, Fairness.
c) According to D. Bandyopadhyay, some of the main elements of 'good governance' are:
Accountability - both financial and political;
transparency both financial and political;
easy access to information;
popular participation in decision making and implementation;
efficient delivery system of services and goods; and
enforcement of rule of law;

Features/ Characteristics of Good Governance Good governance must have the following 8
major characteristics------

Good Governance has many dimensions:

Checks & Balances

effective judiciary
oversight (PACs,
institutions (SAI)
Global initiatives:
Convention, antimoney laundering

Political Accountability
Political competition, broad-based
political parties
Transparency & regulation of party
Disclosure of parliamentary votes

Effective Public Sector

Ethical leadership: asset
declaration, conflict of
interest rules
Cross-cutting public
management systems:
meritocracy, public finance,
Service delivery and
regulatory agencies in

Civil Society & Media

Freedom of press, FOI
Civil society watchdogs
Report cards, client
Private Sector Interface
Streamlined regulation
Public-private dialogue
Extractive Industry
Corporate governance
Collective business

Decentralization and Local Participation

Decentralization with accountability
Community Driven Development (CDD)
Oversight by parent-teacher associations & user groups
Beneficiary participation in projects

We have to increase our area of knowledge to survive in this era of globalization. If we want to
make our movement against hunger, malnutrition, illiteracy meaningful, we have to enter into the
world of knowledge about development.
In September 2000 the United Nations agreed to adopt a number of Millennium Development
Goals from United Nations, it is clearly stated that goals could be suggested to define
development is easy, what is important for a society, and how those goals are achieved. The
eight goals are:
1) Eradicate extreme poverty and hunger
2) Achieve universal primary education
3) Promote gender equality and empower women
4) Reduce child mortality
5) Improve maternal health
6) Combat HIV/ AIDS, Malaria and other diseases
7) Ensure environmental sustainability
8) Develop a global partnership for development.
Development refers changes in income, savings and investments along with progressive changes
in socio-economic structure of a country. Significant change in distribution of wealth along with
growth is development.
Development is a multi dimensional process involving changes in social structures, popular
attitudes, and national institutions, as well as the acceleration of economic growth, the reduction
of inequality, and the eradication of poverty.
World Bank in 1991 asserted that the challenge of development is to improve the quality of
The improved quality of life involves higher incomes, better education, higher standards of
health and nutrition, less poverty, a cleaner environment, and more equality of opportunities,
greater individual freedom, and a richer cultural life.

Does Good Governance Matter in Development?

Currently, the international multilateral agencies have profoundly been given importance on
good governance in the developing countries. According to donors good governance is closely
associated with economic development. Strong argument have been put forward that without

good governance structures the poor and the developing nations cannot reduce poverty. And
contrarily bad governance is being viewed as the main cause behind the ills confronting these
In 1991, U.S. Agency for International Development (USAID) released a detailed democracy
and governance policy paper stating that:
Open political system (s), respect for basic human rights, and an appropriate and efficiently
administered legal and regulatory system based on due process of law, encourage(s) peaceful
resolution of social conflict, (and) stimulate(s) individual initiative.and thus support(s)
economic and social development.Political development is central to sustained economic and
social development.
The Clinton administration even further strengthened the conditions of democracy and
governance in U.S. aid flows, and the 1995 USAID development strategy argued that the
successful achievement of the larger development agenda was impossible, without attention to
politics, and that success in the other core areas of sustainable development is inextricably
related to democratization and good governance.
The Bush administration has not only continued but also even expanded the previous
administrations policy of integrating good governance and democracy into development
approaches. The
2002 U.S. National Security Strategy states:
The United States will deliver greater development assistance through the New Millennium
Challenge Account to nations that govern justly, invest in their people, and encourage economic
freedom (The National Security Strategy of the United States of America 2002: 5).
Elsewhere President George W. Bush has also said: Good governance is the essential condition
in development, and therefore the U.S. would reward nations that root out corruption, respect
human rights, and adhere to the rule of law (in Windsor 2001: 145)..
By looking at the U.S. foreign aid policies, we have identified that starting from early 1990s
when the issue of good governance gained popularity up to the present day, the U.S. has always
emphasized the importance of good governance as a condition in giving aid.
Democracy, in this context, is valuable if it provides legitimation for good governance. Paul
Hirst argues that multiparty competition and free elections are valuable in preventing cronyism
and corruption and in building public support for development strategies, but only if parties
eschew extremism and political game by appropriate liberal rules (Hirst 2000:14).


However, if the above arguments are valid, how have Japan, Korea, Taiwan, Malaysia and
Thailand achieved rapid economic growth and development through poor accountability (in
terms of western yardstick), low level of transparency, convoluted legal frameworks that do not
nurture rule of law? Red tapism and centralization of power also common among these countries.
Their democracy is between non-existent and guided or corrupts (Turner and Hulme 1997:233).
Notwithstanding, we could not deny the importance of good governance.
It is obviously true that poverty, poor health, low life expectancy and inequality based on income
and wealth are endemic a major part of the world. Some countries have very low or negative
growth rates. Even some countries have precious natural resources (e.g. Zambia) but they have
poor growth records or low per capita incomes. According to Rose-Ackerman,
One root of the problem is dysfunctional public and private institutions. Poorly functioning
governments mean that out-side assistance will not be used effectively. Low-income countries
and those with weak growth records are often in difficulty because they are unable to use their
human and material resources (Rose-Ackerman 1999:1).
Kaufmann and associates mention that, not surprisingly good governance is strongly correlated
with better development. In their research they found a large causal effect running from
improved governance to better development outcomes. An improvement of one standard
deviation in the rule of law from the low level prevalent in Russia to the middling level in the
Czech Republic or, alternatively, a reduction in corruption from the very high level prevalent in
Indonesia to the lower level in Korea leads to between a two and fourfold increase in per capita
incomes, a decline in infant mortality of similar magnitude, an improvement of 15-25% points in
literacy levels.
They examined the beneficial impact of improved rule of law on per capita income, for a sample
of 166 countries and using data for the late 1990s. These large causal effects suggest that good
governance should be given a high priority on the development and poverty reduction agendas
(Kaufmann 2000).
By using data on 97 countries over the period from 1974 to 1989, Keefer and Knack examined
the impact of government institutions on investment and growth. They measure quality of
government by combining five separate indices: corruption, expropriation risk, rule of law, risk
of contract repudiation by the government, and the quality of the bureaucracy. The authors
depicted that measures of the quality of government institutions do at least as well as in
explaining investment and growth as measures of political freedoms, civil liberties and the
frequency of political violence (Keefer and Knack 1995: 207-227).
Paolo Mauro (1998) indicates that high levels of corruption are correlated with lower levels of
investment as a share of Gross Domestic Product (GDP). The indices of corruption are extremely


associated with other measures of bureaucratic efficiency, such as the quality of the judiciary and
the level of red tape.
Putting the separate indices together in a measure of bureaucratic efficiency (that ranges from
one to ten, according to Mauro, if Bangladesh [with a score of 4.7] were to improve the
integrity and efficiency of its bureaucracy to the level of that of Uruguay [score 6.8] its
investment rate would rise by almost five percentage points and its yearly GDP growth rate
would rise by over half a percentage point (Mauro 1998: 263-279).
Corrupt high-level officials support too much unproductive public investment and undermaintain past investments. Tanzi and Davoodi in their paper, Corruption, Public Investment and
Growth, show that corruption reduces total investment and limits foreign direct investment
(FDI), but instigates excessive public infrastructure investment (Tanzi and Davoodi 1997).
Recently, United Nations Development Programme (UNDP) entitled Corruption and
Governance also pointed out, bureaucratic corruption and in efficiency have taken a heavy toll
on the Bangladesh economy, causing hundreds of millions of dollars worth of loss in terms of
unrealized investment and income (Mustafa 1997).
In 2000 The World Bank in a paper Corruption in Bangladesh: Costs and Cures, suggested that
by containing corruption Bangladesh could add to its annual per capita growth something
between 2.1 and 2.9 percent and could also lower the poverty level by some 25 percentage
points. The Bank said per capita income in a corruption free Bangladesh could have nearly
doubled to USS 700 instead of 350 reflects the harmful impact of bribery, kickbacks and similar
under-the-table payments on investment levels and misallocated resources (Asian Affairs 2000:
In a nut-shell we can say international development agencies, policy makers and development
scholars now come to diagnosis that development is not merely a matter of creating free markets,
promoting investment and implementing macro-economic policies rather institutions (e.g.,
appropriate laws, social institutions and values etc.) matter for driving development and a
dynamic economy. Hence we need good governance for creating an effective political
framework conducive to private economic action- stable regimes, the rule of law, efficient state
administration adapted to the roles that governments can actually perform, and a strong civil
society independent of the state ( Hirst 2000: 14).

Sustainable Human Development:

We define human development as expanding the choices for all people in society. This means
that men and women - particularly the poor and vulnerable - are at the centre of the development

process. It also means "protection of the life opportunities of future generations...and...The

natural systems on which all life depends" (UNDP, Human Development Report 1996). This
makes the central purpose of development the creation of an enabling environment in which all
can enjoy long, healthy and creative lives.
Economic growth is a means to sustainable human development - not an end in itself. Human
Development Report 1996 showed that economic growth does not automatically lead to
sustainable human development and the elimination of poverty. For example, countries that do
well when ranked by per capita income often slip down the ladder when ranked by the human
development index. There are, moreover, marked disparities within countries - rich and poor
alike - and these become striking when human development among indigenous peoples and
ethnic minorities is evaluated separately.
There are five aspects to sustainable human development - all affecting the lives of the poor and
Empowerment - The expansion of men and women's capabilities and choices increases their
ability to exercise those choices free of hunger, want and deprivation. It also increases their
opportunity to participate in, or endorse, decision-making affecting their lives.
Co-operation - With a sense of belonging important for personal fulfillment, well-being and a
sense of purpose and meaning, human development is concerned with the ways in which people
work together and interact.
Equity - The expansion of capabilities and opportunities means more than income - it also means
equity, such as an educational system to which everybody should have access.
Sustainability - The needs of this generation must be met without compromising the right of
future generations to be free of poverty and deprivation and to exercise their basic capabilities.
Security - Particularly the security of livelihood. People need to be freed from threats, such as
disease or repression and from sudden harmful disruptions in their lives.
UNDP focuses on four critical elements of sustainable human development: eliminating poverty,
creating jobs and sustaining livelihoods, protecting and regenerating the environment, and
promoting the advancement of women. Developing the capacities for good governance underpins
all these objectives.

Relationships between Governance and Human Development:

Each domain of governance - the state, the private sector and civil society - has a unique role in
promoting sustainable human development.


The state:
In countries where electoral processes exist, the state is composed of an elected government and
an executive branch. The state's functions are manifold - among them, being the focus of the
social contract that defines citizenship, being the authority that is mandated to control and exert
force, having responsibility for public services and creating an enabling environment for
sustainable human development. The latter means establishing and maintaining stable, effective
and fair legal-regulatory frameworks for public and private activity. It means ensuring stability
and equity in the marketplace. It means mediating interests for the public good. And it means
providing effective and accountable public services. In all four roles, the state faces a challenge ensuring that good governance addresses the concerns and needs of the poorest by increasing the
opportunities for people to seek, achieve and sustain the kind of life they aspire to.
The state, of course, can do much in such areas as upholding the rights of the vulnerable,
protecting the environment, maintaining stable macroeconomic conditions, maintaining
standards of public health and safety for all at an affordable cost, mobilizing resources to provide
essential public services and infrastructure and maintaining order, security and social harmony.
State institutions can also empower the people they are meant to serve - providing equal
opportunities and ensuring social, economic and political inclusion and access to resources. But
people can be empowered only if their legislatures, electoral processes and legal and judicial
systems work properly. Parliaments of freely and fairly elected members representing different
parties are crucial to popular participation and government accountability. Effective legal and
judicial systems protect the rule of law and the rights of all. Open elections mean public
confidence and trust - and so political legitimacy. States should also decentralize political and
economic systems to be more responsive to citizens' demands and to changing economic
In developed and developing countries alike, the state is being compelled to redefine its role in
social and economic activity - to reduce it, reorient it, and reconfigure it. The pressures for
change stem from three sources:

The private sector wants a more conducive market environment and a better balance between
state and market.

Citizens want increased accountability and responsiveness from government, as well as

greater decentralization.

Global pressures from supranational and worldwide social and economic trends are
challenging the identity and nature of the state.


The private sector:

The state is a big force for development - but it is not the only one. Sustainable human
development depends in part on creating jobs that provide enough income to improve living
standards. Most states now recognize that the private sector is the primary source of
opportunities for productive employment. Economic globalization is fundamentally changing the
ways in which industries and enterprises operate. In many developing countries, private
enterprise must be encouraged and supported to be more transparent and competitive in the
international marketplace.
Equitable growth, gender balance, environmental preservation, expansion of the private sector
and responsible and effective participation in international commerce cannot be achieved by the
market alone, however. States can foster private sector development that is sustainable by:

Creating a stable macroeconomic environment.

Maintaining competitive markets.

Ensuring that the poor (especially women) have easy access to credit.

Nurturing enterprises that generate the most jobs and opportunities.

Attracting investment and helping to transfer knowledge and technologies, particularly to the

Enforcing the rule of law.

Providing incentives for human resource development.

Protecting the environment and natural resources.

Civil society:
Civil society also has to protect the rights of all citizens. As the state and the private sector are
being reshaped and their relationships redefined, civil society is changing in important ways.
Unresponsive government and unrelenting economic and social pressure have undermined some
traditional civil society organizations and strengthened others - and in many cases forced people
to organize in new ways. Civil society is thus more than just society. It is the part of society that
connects individuals with the public realm and the state - it is the political face of society.
Civil society organizations channel people's participation in economic and social activities and
organize them into more powerful groups to influence public policies and gain access to public

resources, especially for the poor. They can provide checks and balances on government power
and monitor social abuses. They also offer opportunities for people to develop their capacities
and improve their standards of living - by monitoring the environment, assisting the
disadvantaged, developing human resources, helping communication among business people.
More fundamentally, civic networks ease the dilemmas of collective action by institutionalizing
social interaction, reducing opportunism, fostering trust and making political and economic
transactions easier. Well-developed civic networks also amplify flows of information - the basis
for reliable political, economic and social collaboration and public participation of civil society
members. These relationships and social norms make up a nation's social capital.
Civil society organizations do not always pursue the qualities of good governance. Nor are they
always the most effective development agents. That is why states, while recognizing and
protecting the democratic rights of civil society organizations, must also ensure that the rules of
law and values that reflect societal norms are adhered to. Democratic institutions, particularly
local ones, can be important in ensuring that all in society have a voice, as well as ensuring that
there are transparent and fair ways to reach consensus.
Like private enterprises, civil society organizations need adequate capacities to fulfill their
potential. They also need an enabling environment, including a legislative and regulatory
framework that guarantees the right of association, incentives to facilitate support and ways for
civil society organizations to be involved in public policy-making and implementation.
Strengthening the enabling environment for sustainable human development thus depends not
only on a state that governs well and a private sector that provides jobs that generate income. It
also depends on civil society organizations that make political and social interaction easier and
that mobilize society to participate in economic, social and political activities.

Governance Considerations and Aid Policy: Towards a Systematic Approach

Donors now widely accept that the quality of governance does matter for development
performance and aid effectiveness. They have expanded their work on governance and political
issues. This includes:
Supporting the development of international agreements and initiatives on governance (for
example, human rights treaties or the Extractive Industry Transparency Initiative);
Substantial funding and technical assistance for governance reforms and capacity building in
developing countries;
Promoting policy processes that foster participation the PRSP process is one example;

Supporting regional mechanisms for improving governance such as the African Peer Review
Mechanism (APRM).
These are important initiatives and signals. But in many cases, the impact of these interventions
has remained limited.
The hottest topic at present concerns how to orient overall aid allocations to better reflect
governance considerations. The principle has been accepted by the high-level reports of the UN
Millennium Project and Commission for Africa. Basically, more aid would go to countries where
it would be used better. This approach could also provide a useful systemic incentive for
countries to try to improve governance (which would then have further beneficial spillovers). But
the major reports have provided few answers on how to operationalize the approach. The most
important and challenging policy issue is: how can link aid to governance be done rigorously
and systematically?
Many donors already consider governance issues (as part of a range of considerations) in
selecting focus countries or in informing their aid allocations across countries. The World
Bank uses the Country Policy and Institutional Assessment
(CPIA), which includes governance assessments, for IDA funds. DFID and the Dutch also use
the CPIA as part of a model to inform their aid allocation. However, the CPIA is
methodologically weak and is not conducted in a transparent manner. The Millennium Challenge
Account of the USA uses aggregate governance indicators to help with country selection for
extra funding an improvement and currently the most transparent approach. DFIDs Drivers of
Change analysis is also a step in the right direction. The bottom line, however, is that no donors
do rigorous, transparent governance assessments and link these governance assessments to aid
allocation and country programming.
Without progress in governance, all other reforms will have limited impact. Commission for
Africa, 2005
What should donors do? The first step should be to support more independent, rigorous and
detailed governance assessments and it is critical to draw on the views of local stakeholders. A
key issue is to build up local capacity to conduct such assessments. The
Making Sense of Governance framework and approach provides one way forward. Improved
governance assessments can help improve aid policy by identifying useful governance
interventions, important governance issues that would affect broader country strategy and criteria
for allocating aid across countries.
The next step is to orient the level and type of aid according to the specific conditions in each
country. For well governed poor countries it makes sense to provide more aid, over longer
periods, through direct budget support to governments, and thus for the range of development
activities defined by the country.


For poorly governed countries, the approach might mean the provision of limited amounts of aid,
for short periods, for humanitarian response, directed through NGOs and oriented towards
improving governance. Many countries will lie between these two positions the key is to find
nuanced approaches regarding quantity, time frame, breadth of activity and type of aid based on
rigorous governance assessments. There are a number of other considerations:
The findings of governance assessments and the aid-governance agreement between donors
and recipients should be made clearer this could help avoid the start-stop approach to aiding
difficult contexts;
Donor support (especially in heavily-aided countries) should not diminish accountability to
domestic stakeholders such as local parliaments, private sector and civil society actors;
Donors should coordinate better this improves the systemic impact of linking aid to
governance issues.

Key Governance Conflicts & Challenges:

The findings of the Making Sense of Governance book by comparing 16 developing countries
(accounting for 51% of the worlds population), highlight significant governance challenges and
opportunities. Some of the important findings of the book can be summarized as follows with
reference to each arena:
1. Civil Society:
Space for civil society is increasingly open. However, public input into policy remains quite
limited. Peoples views tend to be ignored or misrepresented.
2. Political Society:
Most striking here is the low rating for the accountability of legislators. The respondents noted
that legislators tend to ignore the publics interests and that many legislators run for office
because of financial advantages.
Decision-making processes are often not clear and patronage remains prevalent in the public
3. Government:
The good news here is that in many countries the military is increasingly seen as subordinate to
civil government.
There are also interesting findings on regime type. Governments can gain legitimacy from strong
development performance. On its own, being elected is not a guarantee of legitimacy.


4. Bureaucracy:
Ratings for the accountability and transparency of the bureaucracy are generally low. Since
bureaucratic accountability and transparency are central for delivering services to the public,
they deserve further attention as countries push to achieve the MDGs.
5. Economic Society:
There are multiple comments of a general character to suggest that cronyism and bribery are
quite common in the transactions between government and the private sector. Government
officials, especially politicians, do not hesitate to ask for a piece of the cake when business
transactions are being negotiated. For example, corruption was identified as the number one
governance problem in India.
6. Judiciary:
There are major concerns regarding the quality of justice systems. One is that money buys
justice. A second refers to inefficiency and the slow processing of cases a common view is
that justice delayed is justice denied. A third highlights that many of the poor and illiterate
people fear to approach the courts.

How to Ensure Good Governance:

Good governance is a much-talked-about issue of the day. It has been defined as 'the exercise of
economic, political and administrative authority to manage a country's affairs at all levels'.
Governance and development are inextricably linked with each other. Good governance is a
prerequisite for sustainable development. There are some important components of good
1. Legitimacy:
Good governance presupposes a legitimate government i.e. a government elected through free
and fair election. An autocratic or illegitimate government can notch up spectacular economic
development but in the absence of free expression of thought and freedom of speech, good
governance will remain an elusive goal. Hence an autocratic or illegitimate government is an
anathema to good governance.
2. Rule of law:
The rule of law implies that all citizens irrespective of their race, religion, sex and political
affiliation are equal in the eye of law and are entitled to equal legal protection.
Protection of human rights: Another important component of good governance is protection of
human rights. Custodial deaths, torture, degrading treatment of victims by law enforcing
agencies, illegal detention and engaging somebody in any unethical profession or in any
profession against his/her will are examples of violation of human rights.

3. Accountability:
Accountability is the hallmark of good governance and lack of it breeds corruption and
encourages highhandedness and excesses on the part of the executive organ of the state.
4. Transparency:
Transparency means that the government must share information with the people and ensure its
wide dissemination to them. People should have access to all the documents of the government
except those which have bearing on national security. Lack of it results in misuse of power and
breeds corruption.
5. Efficiency:
Efficiency, an important component of good governance, depends on proper recruitment,
training, posting and promotion on the basis of merit and not on any extraneous factor. Speed of
work is also a hallmark of efficiency.
6. Participation:
All men and women should have a voice in decision-making, either directly or through
legitimate intermediate institutions that represent their interests. Such broad participation is built
on freedom of association and speech, as well as capacities to participate constructively.

Importance of Good Governance in Bangladesh:

Bangladesh needs Good Governance to improve its poor economic, social and political condition
and to provide the environment for private sector development and employment generation.
Weak capacity and corruption have made some of the government perform poorly, with negative
impacts on poverty and stability. Good governance i.e. sound fiscal, monetary and trade policies
create a positive environment for private sector development. A dynamic private sector creates
jobs and income, generates wealth and ensures resources are used efficiently. Good governance
focuses on private sector growth in developing countries, encouraging responsible fiscal and
monetary policies and creating the environment for efficient production, through appropriate
trade, exchange rate, taxes and pricing policies; promoting deregulation and competition; and
improving the appropriate legal, judiciary and regulatory environment. Many recent crosscountry studies have come up with arguable evidence that the economic growth and poverty
reduction are positively related to the institutional quality in a given country. The better
institutional quality implies effective judiciary or legislative mechanisms, the rule of law,
political transparency/stability, civil liberties and rights, freedom of media, etc. If the countries
strengthen their institutional arrangements, then their economic efficiency improves.
There are many studies, which present the governance and development inter-linkage. We would
briefly illustrate only few frequently cited works in the literature. The World Bank (1992) in its

report on 'Governance and Development' provided a detailed analysis to indicate how important
it is now to look comprehensively at the institutional environment in order to pursue a constant
effort for overall development. Then, in the Interim Committee meeting (1996) of IMF, the Fund
identified 'promoting good governance in all its aspects, including ensuring the rule of law,
improving the efficiency and accountability of public sector, and tackling corruption as the key
for economic efficiency and growth' in countries.
During the last few years it has been increasingly recognized that Bangladesh needs good
governance to reducing poverty and increasing prosperity. Ensuring good governance in our
country will enable us1. Success of Public Programs: Without good governance, the benefits of public programs will not
reach their target recipients, especially the poor. Without good governance, the donor funds will
not be used effectively, corruption will flourish, and citizens will become increasingly
disillusioned with their governments and politicians.
2. Relationship among public, private and civil society: Good governance is not only the domain
of public sector. Rather, it depends on the relationship and cooperation between different spheres
of governance i.e. public, private and civil society.
3. Control of Unfair Practices: In Bangladesh, the unhealthy trading practices of private sector
have led to the sale of adulterated foods, daily necessaries goods and other things at a high price,
hoarding, price hikes and artificial crisis. If good governance present in our countrys this type of
unfair practices may be stopped.
4. Control of corruption: Governance in Bangladesh is intimately linked with corruption.
Rampant corruption at all levels has made it difficult for entrepreneurs to run their businesses
smoothly. If good governance present we would get rid of corruption.

Good Governance Increases the Public Awareness: Public information efforts with
government and civic society are primarily intended to raise awareness, disseminate information
about the linkages between good governance and economic and social outcomes.

6. Good Governance and Corporate Social Responsibility: Absence of good governance

Bangladesh has contributed significantly to the lack of business ethics and the issue of CSR. In
Bangladesh the private sector seems to emphasize earning profits for short-term, ignoring the
responsible behavior which are important for the long-run success of their operations. The lack
of business ethics by the private sector is linked with governance issues. To get rid of this
problem we need good governance.


7. The Key to Poverty Reduction & Prosperity: During the last few years it has been
increasingly recognized that good governance is essential to reducing poverty and increasing
prosperity. Good governance and good social outcomes that reduce poverty and increases in
income and improvements in social indicators.
8. Mobilization of domestic resources: Mobilization of domestic resources is a way to improve
the economy of a country. To get the maximum output by mobilizing the domestic resources we
need good governance.

Promotion of human rights: Emphasizing the strengthening of good governance at the national
level, including the building of effective and accountable institutions for promoting growth and
sustainable human development and ensure the human rights.

10. Other Impacts: Good governance has implications in various substantive fields such as
environmental management, HIV prevention, etc. The example of Benin and the improvement of
its governance system show that the national effort and international contributions create a
virtuous circle.

Present Condition: Good governance in Bangladesh context:

Governance of an economy embraces all macroeconomic, microeconomic and fiscal policies,
public economic agencies, regulatory bodies, company laws and legal institutions connected with
economic matters. The weak institutions and policies, outdated colonial laws and inefficiency of
the administration resulted in creating conditions for inadequate governance in Bangladesh.
There exists a weak Civil Society in Bangladesh, and that includes professional bodies, NGOs,
labor unions, media people and other organizations.
Poor governance stifles and impedes development. In countries like Bangladesh where there is
corruption, poor control of public funds, lack of accountability, abuses of human rights and
excessive military influence, development inevitably suffers. A landmark study by the World
Bank, Assessing Aid What Works, What doesnt and Why (1998), demonstrated the crucial role
that good governance plays in enhancing the effectiveness of aid. The study found that where
there is sound country management, an additional one per cent of GDP in aid translates into a
one per cent decline in poverty and a similar decline in infant mortality whereas in a weak
policy and management environment aid has much less impact. Findings like this clearly indicate
that the returns from development assistance are generally greater in developing countries
characterized by good governance. One element of good governance that is needed for sustained
development is an economy that operates in an ethical, accountable and appropriately regulated
environment, which facilitates competition in the marketplace.


Without this, there will be no driver for economic growth and sustainable development will not
be possible. A dynamic private sector, operating in a properly functioning competitive market
system, creates jobs and income, generates wealth and helps ensure that resources are used
efficiently. Simply we can put the criteria-wise picture of good governance in Bangladesh-

Participation: yet to avail much

Rule of law: far behind
Transparency: that has ever remained paperwork and lip service
Responsiveness: mere vague term for us
Consensus Building: rather a fantasy
Equity and Inclusiveness: miles to go
Effectiveness and Efficiency: ever with a question mark
Accountability: is it a futile term?

It is needless to say, Bangladesh is far away from achieving good governance. Whats going on
in this country cant be termed as democracy, the power of the government is limited to a few
powerful persons and more importantly personal or party interest is greater to them. Although
the expectation of the country's people is not so high, fulfillment is still beyond imagination.
People living here only want the assurance of--

The Basic needs of the people i.e. food, shelter, clothing, education, healthcare.
Both socio-economic safety
Enough employment opportunities for the growing population which also belong to the
previous demand.

In brief, people want the ruling party to give some eye-sight towards the welfare of the common
people, not just thinking about their own interest.

Main Constraints and Challenges to Good Governance in Bangladesh:

Despite the continuing efforts of Bangladesh to enhance the quality of governance in the country,
it is still suffering, among other things, from numerous and diverse governance-related
insufficiencies and complexities, both structural and non-structural. At present, one of the key
challenges of good governance in Bangladesh is: how to ensure a continually meaningful
participation of rural people, including those at the grassroots level and the poor in local,
national, regional and global economics, politics, peace, security and right-based development.



Corruption is one of the biggest obstacles in the way of good governance in Bangladesh.
According to Transparency International Report (TIR, GCR: 2003), Corruption acts to diminish
the ability of law enforcement to accomplish its mission. The prevalence of corruption in
Bangladesh has not only diminished the ability of the law enforcement but also adversely
affected the judiciary, public administration and is impeding the fair functioning of the society.

2. Inefficiency of Bureaucracy
Bureaucracy is inevitable in any society or state, an inseparable part of an organized society. But
the bureaucracy of Bangladesh is not efficient in management and administration. The capacity
of policy implementation of our bureaucracy is very poor. Bureaucrats are not accountable and
transparent to the people. Besides, the whole system runs on an outdated legal structure.
3. Nepotism and Politicization in Public Administration
Nepotism is another curse of our politics and administration. The rulers give privilege and unfair
advantage to their family members, kiths and kens on public resources. So the mass people are
deprived from these opportunities. In addition, politicization in government institutions including
the police not only increases inefficiency and corruption but also increases human rights
violation, especially on the opposition political parties by filing false cases.
4. Improper and non-observance of the rule of law
In true and real sense it is said that laws are there but there are applied only in favor of privilege
people or class. As a result justices suffer and denied to the common people although that is an
important aspect of good governance.
5. Improper use of resources
The fund flow in Bangladesh is not smooth to the local government. Beside, this fund is not
utilized properly and very often diverted to other purposes. So, the ordinary people cannot get
efforts, if any, of ensuring good governance.
6. Poor planning strategy
It results in deep effect in peoples everyday life. Improper planning and use of resources result
in threatening scarceness in electricity, water and gas but effective measures are yet to be taken.
Besides these, instability in Citation Hill Tracts and discrimination against the minorities and
environmental degradation surround this country.


Main Challenges to Good Governance



Inefficiency of


Nepotism &
Politicization in

Human Rights

of the Rule of

Lack of
Proper Justice


Use of

Scarcity of

Recommendations to ensure Good Governance in Bangladesh:

We shall make short observations on some factors to put in perspective to ensure good
governance in Bangladesh1. Role of Parliament:
Bangladesh has a parliamentary democracy following independence in 1971 in which
establishment of a sovereign legislature was sought. The main thrust was to ensure the
sovereignty of the people exercised through a democratically elected representative body called
the legislature. Therefore the parliament has significant role to improve the quality of governance
which needs----1.1 Strong parliamentary leadership:
Parliament has a lead role to play in raising issues and putting them on the national agenda.
Strong supporting institutions remain essential to ensuring the effective implementation actor
such as civil society and the private sectors create a committee for accountability to build
consensus on strengthening parliament across party lines.
1.2 The role of Individual MPs:
Strengthening individual Member of Parliaments (MP) accountability Candidates provide
important information prior to nomination, including the declaration of assists and any


previous criminal record. Once individuals are elected to parliament, the process should
allow for dismissal if it is proven that MPs had falsified their declaration.
1.3. Parliamentary Procedure: According to IACC (1999), South Africa, the following efforts
should be taken for effective parliamentary procedure:
Ensure fair and effective use of power;
Establish a televised 'question hour', where Prime Minister and other Minister's are subject to
direct daily questioning;
Discuses and debate corruption issues more frequently in the parliament;
Ensure fair treatment of all MPs in time allocation and attendance in the parliament.
1.4. Institutional capacity building:
For building institutional capacity the following steps should be followed:
Separate the parliamentary secretariat form the public service and ensure its political neutrality;
Recruit and train parliamentary staff in relevant fields;
Establish a research support unit within the parliament,
Provide intra-regional training for MPs
1.5. Strengthening parliamentary oversight:
According to Public Administration Reform Commission (PARC), reports the following
recommendations are necessary for effective parliamentary oversight:
Each MP should be given an office, a personal staff and a small fund to collect information;
MPs should undergo training about the working of the government and rules relating to the
The standing committees on Ministries should normally submit their written reports to the
parliament regularly;
Some important parliamentary committee may be headed by opposition Members.

2. Ensure Sound System of Education:

Where there is illiteracy, there is a difficulty in ensuring good governance. The citizens can
acquire qualities of good governance only through literacy. The people should have the sense of
understanding political problems. They should possess such qualities as sacrifice, sympathy,
selfless service of the country, discipline, fraternity, etc. Education system must make sound to
build up future leaders for the country.
3. High Moral Standard:
The success of good governance also depends on the high moral standard of the people as well as
of the government. Where there is dishonesty, black-marketing, hoarding and smuggling and

where the ministers and public servants are corrupt, the question of the success of good
governance does not arise. People should have the spirit of patriotism, discipline, self-control,
and honesty in payment of taxes and willing obedience to the laws of the land.
4. Law and Order:
The maintenance of law and order in society by the government is another essential condition for
the success of good governance. Anarchy prevails where government fails to maintain law and
order and the peoples faith in government is shaken. They look towards dictatorship in order to
get rid of anarchy.

Independent Judiciary:
For the successful functioning of government, people are given fundamental rights and written
constitutions are introduced with a view to checking autocratic activities of the government.
Where there are no written constitutions, the government can extend and exercise its powers in
an autocratic manner. Judiciary is the guardian of Constitution and fundamental rights, and the
independence of judiciary from the control of executive has been guaranteed. Such a step will be
a great leap forward towards achieving full independence for the judiciary as affirmed by
Articles 94 and 116A of the Constitution.

6. Efficient Bureaucracy:
In the time-bound 'games' of dependency and interdependency per government cycle, the
bureaucracy is politicized and polarized. At the end, the departing government leaves behind a
more powerful but relatively less competitive bureaucracy. The bureaucracy mentioned could be
detrimental to the welfare of the majority of Bangladeshis. This bureaucratic crisis is earnestly
being stopped. The absence or the weak presence of balanced and constructive pluralism in local
and national governance can isolate a country's bureaucracy and the ruling political parties from
the rest of the country's population.

Reform of Police Department:

In Bangladesh, police are mostly used by the ruling party as a weapon to curb the opposition. In
most cases, police are engaged to control political drama (hartal, procession, blocked etc) rather
than controlling other obligatory duties like maintaining law and order and curb terrorists etc.
Appointment of police, their promotion, transfer etc are mostly done on the basis of political
criteria rather than merit, experience and seniority. Sometimes police personnel are sent on
forced retirement, made officers on special duty (OSD), given punishment and transferred for
political reasons. So clear and distinct principles should be made in their appointment,

promotion, demotion to ensure that their jobs are done smoothly, fairly and efficiently and that is
one of the important aspects to establish good governance. To keep out police from political
influence self-governing police department may be formed like army, navy and air force. To
stop corruption in the police department, active counterintelligence and training on moral issues,
increase the salary-bonus, housing facilities, exemplary punishment for crime and irregularities
etc may be given.

Women Empowerment:
The constitution of Bangladesh contains the provision of gender equality, prohibition of gender
basis of discrimination and extension of opportunities for women in all spheres of civic life. It is
also stated in the constitution that the local government institutions be composed of
representatives of peasants, workers and women (Article 9); steps will be taken to ensure
participation of women in all spheres of national life (article 10).

9. Equality Everywhere:
Good governance does not recognize class distinctions. It is based on social, economic and
political equality. In good governance all are equal before law and there is no discrimination on
the basis of caste, color, religion, sex and economic status. Economic equality does not mean that
everybody should be given equal emoluments; it means equality of opportunity and a fair and
open field for all.
10. Annihilation of Corruption:
Corruption is the main problem in Bangladesh administration for implementation of any
development program. Corruption has engrained in our society. Only it can be wiped out
gradually through the process of institutionalization of controlling institutions and it needs a
dedicated leader for institutionalization of institutions, which controls the administration.
11. Decentralization of Powers:
For the success of good governance, decentralization of powers is essential. The concentration of
power makes the government autocratic. Directly elected local governments should be
established according to Articles 59 and 60 of the constitution with proper powers and
independence and the respective local administration with its officials and staff must be vested in
the direct control of the local governments. This will on the one hand, decentralize administrative
power, functions and responsibilities and as a result channel-based corruption and conspiracy.


12. Independent Anti-Corruption Commission:

The Independent Anti-Corruption Commission will prove to be sufficiently independent and
bold to punish corruption in high places of the government. We must eliminate corruption to help
the institutions of good governance function.
13. Political Stability in Parliamentary System:
There is the issue of political stability in the parliamentary system. The remarkable clause in the
constitution allowing the elected parliament to increase their number by 10% had an unexpected
effect. It made the governments more stable by allowing the party with the largest number of
seats to amplify their position if less than a majority into a majority position. This clause of the
constitution having lapsed the next decade may well see the need for coalition governments.
Such coalitions are threatened by partners deserting the opposition and causing either a change in
government or another election.
14. Freedom of Media and Speech:
The media, both print and electronic, play an important role in molding public awareness.
Unfortunately, the media especially in Bangladesh, especially the state-run ones are controlled
by the ruling party. In that state it is a quite tough job to ensure good governance. So to keep the
media out of political and bureaucratic interference, a separate media regulatory commission
may be formed. For the transparency within the government fabrics Radio and TV should
immediately be given autonomy. Operation of private TV channels should be allowed.
Transparency and accountability cannot be achieved without an informed public.

15. Implementation of E-Governance:

Imagine a situation in which all interaction with government can be done through one counter 24
hours a day, 7 days a week, without waiting in lines. In the near future, this will be possible if
governments are willing to decentralize responsibilities and processes, and if they start to use
electronic means such as the Internet. E-governance refers to the processes and structures
pertinent to the delivery of electronic services to the public, collaborating with business partners
and conducting electronic transactions within an organizational entity.
In an E-Government there is significant opportunity to explore and exercise good governance.
The huge development in the Information and Communication Technology (ICT) all over the
world has largely passed by Bangladesh. An efficient telecommunications sector is essential to
the process of exploiting ICT potential for government systems. Telecommunications should be
expanded with total computerization even across the villages. Given the initial conditions, good
governance will not come easy but nevertheless it is important to keep working towards it. It will

be possible through the effective use of information and communication technology to link up
separate functions that range from the revenue collection to processing bills; and separate
organizations in government and private sector immediately increasing efficiency of governance.
With the application of information and communication technology it will be possible to
depersonalize the systems, formalize public management processes and reduce profit-seeking
16. Establishment of an Effective Democracy:
Politicians should stop from delivering irresponsible and antagonistic speech is to get political
benefit in a national crisis. Both the government and the opposition should work under
democratic norms and values instead of confrontation and egoism. A country may have vast
resources but still can remain poor if it does not have good governance. Good governance is
characterized by an accountable government at the top, an independent and affordable judicial
system, freedom of thought and expression, and above all, freedom of choice for its citizenry.
17. Independent, Impartial and Periodical Elections:
Independent, impartial and periodical elections help in establishing faith of the people and the
opposition, otherwise the opposition party will not get an opportunity to form the government
and there will be no respect for public opinion. In the absence of independent, impartial and
periodical elections, the opposition parties shall try to change the government by a revolution
with the help of military or by the use of violent force.
18. Ensuring active participation of the opposition in Parliament:
It is a common practice in Bangladesh that in every session the opposition parties are not
participating in parliament to speak for the people. We have to take steps to stop this bad
practice in the future.
19. Incentive Mechanism:
People are rational human beings who respond to incentives. To develop a set of incentives we
need to set reform programs, which depends on change-agents, and identifying what are the
change-agents. We need to point out the need of incentives for good performances of
government servants. Government reforms need to be linked to incentives. Incentives can bring
changes in each society.


20. Institutional Management:

Developing institutional capacity should get priority. A strategy is required for ensuring
accountability and transparency, also suggesting introduction of performance evaluating systems
for the institutions and incentives for good performance.
21. Role of Private Sector:
In Bangladesh, the private sector has not been an effective voice against public sector
mismanagement as because businesses have no time to waste by raising voice, as time is money.
Moreover, there is a tendency amongst executives, the civil society to find everything politically
divided, and therefore they conclude there is no basis for collective actions. Public institutions
are damaged due to poor management and ineffective public services. Basic collective actions
are required in this context. There should be alternative dispute settlement methods.
We need to see again and again why the private sector does not stand together to become an
active voice. As a matter of fact, interest groups are fragmented and collective class action does
not exist in reality during the time of change with product differentiations and market segments.
Once there was a consciousness among some cadres of certain codes of behavior or ethics that
they identified with as a whole. This kind of class-consciousness worked well to bind the group
together with a prescription of action. With the passage of time, we would not be able to figure
out how one can regenerate this kind of a feeling. But already in the process, corrupt bureaucracy
has led to regulatory capture by the private sector.

Good governance agenda is an emerging priority for the international community. It can be
considered more pragmatic for meeting the public demands, promoting efficiency and
development of a country. Although some observers, policy makers and administrators question
these new interest by international organizations, stating that an unacceptable attempt to impose
Western values not being compatible with our culture. But we think that good governance is
very important in the context of South Asia, especially Bangladesh. Because misgovernance is
evident in every sphere of our national life.
Without improving the key indicators of good governance, like rule of law, voice and democratic
accountability, stable political regimes, government effectiveness and control of corruption it is
not possible to achieve rapid per capita income and improve other social indicators. A modest
growth in income cannot guarantee better rule of law or improved voice and accountability.
Misgovernance has serious implications such as unattainability of growth path, suffering of pro
poor strategies, lack of foreign investment, unstable political regimes etc. Good governance may
extremely complex but it is essential for curbing corruption, reducing poverty and to ensure a
dynamic economy and development.

For achieving good governance, on the one hand, we need strong accountable and effective
political institutions, patriotism and, on the other hand, aid agencies such as, IMF, UNDP, World
Bank etc. should have a long-term commitment of funds and expertise to support governance
reform projects.

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