1.

State and Governance

1.1 Fundamentals of governance: concept, context, and characteristics
In most dictionaries “government” and “governance” are interchangeably used, both denoting the
exercise of authority in an organization, institution, or state. Now, the conception of politics and
government move beyond the narrow realm of government to what is thought as “public life” or
“public affairs.” Since, the government does not only decide for all and the civil society and the
private sectors play vital role in the community, thus, the conception of the word “governance”.
Governance is not the sole domain of government but transcends government to encompass the
business sector and the civil society. Thus, Governance is a broader term than government.
 Governance is the exercise of economic, political, and administrative authority to manage
the nation’s affairs at all levels. It comprises of mechanisms, processes and institutions
through which citizens and groups articulate their interests, exercise their legal rights and
obligations, and mediate their differences.
 Governance refers to institutions and actors from within and beyond government.
 Governance identifies the blurring of boundaries and responsibilities for tackling social
and economic issues.
 Governance identifies the power dependence involved in the relationships between
institutions involved in collective action.
 Governance is about autonomous self-governing networks of actors
 Governance recognizes the capacity to get things done which does not rest on the power
of government to command or use its authority.
Governance has three legs: economic, political, and administrative. Economic governance
includes decision-making processes that affect a country's economic activities and its
relationships with other economies. It clearly has major implications for equity, poverty, and
quality of life. Political governance is the process of decision-making to formulate policy.
Administrative governance is the system of policy implementation. Encompassing all three, good
governance defines the processes and structures that guide political and socio-economic
relationships.
Governance: Varying Definitions

The World Bank defines governance as ‘how power is exercised in the management of a

country’s economic and social resources for development.’
Commission on Global Governance (1995) describes governance as ‘the sum of the many
ways individuals and institutions, public and private, manage their common affairs. It is a
continuing process through which conflicting or diverse interests may be accommodated and
cooperative action may be taken. It includes formal institutions and regimes empowered to
enforce compliance, as well as informal arrangements that people and institutions either have
agreed to or perceive to be in their interest.’