Governance Theory and

Practice
A Cross-Disciplinary Approach

Vasudha Chhotray
School o f International Development,
University o f East Anglia, UK

G erry Stoker
Professor o f Governance,
University o f Southampton, UK

FLA CSO - Biblioteca

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© Vasudha Chhotray and Gerry Stoker 2009, 2010
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Contents

L ist o f T ab les viii

A ckn ow ledgem en ts ix

1 In tro d u c tio n : E x p lo r in g G o v ern an ce 1

D efining th e scope o f governan ce theory 3
E xplaining th e rise o f govern ance theory 7
A cross-disciplinary to u r o f governance 10

2 G o v e rn a n c e in P u b lic A d m in istra tio n a n d P o litic a l 16

S c ie n c e
C h allen g e to th e d iscip lin e o f politics and p u b lic 18
adm inistration
M aking governan ce w ork: five theoretical th read s 26
Network m an ag em en t theory 27
Theories o f d eleg atio n 32
Social in terp retiv e theories 36
T he bounded ra tio n a lity school 37
Cultural in stitu tio n a l theory 41
G overnan ce d ebates in political science and p u b lic 46
adm inistration
G overnance w ith o u t governm ent? 46
T h e nature o f g overn an ce failure 48
T he ch allen g e o f dem ocracy and a cc o u n ta b ility 49
C onclu d in g c o m m e n t 51

3 G o v e rn a n c e a n d th e N ew In s titu tio n a l E c o n o m ic s 53
T h e challenge o f n ew in stitu tio n al eco n o m ics 54
In tellectu al d om ain o f th e NIE and th e study o f 57
governance
W illiam son and transaction cost ec o n o m ics: 58
firm -level g ov ern an ce
P rincipal-agent th eo ry 60
A rules-based co n cep tio n o f governance: N orth 63
O strom : co m m o n -p o o l resources 67
T h e lim its to N IE's u nderstanding o f g o v ern an ce 69
C on clu sions 72

V
5
Governance in Development
Studies

Since th e 1990s, th e id ea o f 'g o v ern an ce' h as c o m e to o ccu p y th e

centre stage in th in k in g a b o u t d evelop m ent. T h is o ccu rren ce clo sely
mirrors th e evolution o f a d o m in an tly pro-m arket perspective in m a in ­
stream developm ent p o lic y to o n e th at reco g n ises th e sig n ifican ce o f
the state and the n atu re o f p o litics m ore g e n e ra lly in im p a ctin g o n
developm ent processes an d ou tco m es. G o v ern an ce is th e term , ind eed
the overarching category, w h ich is pred om inantly used b y in tern atio n al
developm ent agencies to en cap su late these re ce n t co n c e rn s. However,
the m ore popular and seem in g ly consensual th e u se o f th e term b ecam e
amongst policy-m akers, th e m o re co n te n tio u s an d critica l w ere th e
responses it generated a m o n g st scholars. As a resu lt, th e literatu re o n
governance w ithin th e D evelop m ent Studies d iscip lin e is sharply polar­
ised. T h is polarisation re flects th e con tested n a tu re o f th e d iscip lin e
itself. D evelopm ent Stu d ies h as been d escribed as an 'u nusu al e n te r­
prise' (Corbridge, 2 0 0 7 :1 7 9 ) for it appears to b e co m m itted at th e sam e
time to th e principle o f 'd ifferen ce', in treating th e 'T hird W orld' as d if­
ferent from the W est, and th a t o f 'sim ilarity', in d evelo p m en t's m ission
to m ake th e peoples and p ro cesses of th e d ev e lo p in g w orld m ore lik e
that o f th e developed w o rld . For a nu m ber o f re a so n s w h ich we w ill
explore in this chapter, th e governance agenda encap su lates b o th th ese
dim ensions. W hile on th e o n e hand , it has a c c o m p a n ie d th e grow ing
realisation th at u n iv ersalistic free-m arket p o licie s c a n n o t succeed in
the co u n tries o f Asia, A frica an d South A m erica u n less due co n sid era ­
tion is given to th eir p a rtic u la r governance stru ctu res and processes
(the p rin cip le of d ifference), o n th e other h an d , w estern govern m en ts
and aid agencies have form u lated a very clear a rticu la tio n o f w hat th ey
regard as 'good g o v e rn a n ce ' o n th e basis o f w estern exp erien ces an d
contexts (th e p rinciple o f sim ilarity). In th is sen se, debates aroun d

97
98 Governance Theory and Practice

g o v ern an ce mirror th e larger concerns o f th e d iscip lin e o f development

studies.
T h e co n cep t o f g o v e rn a n ce has allowed for th e in tellectu a l advance­
m e n t o f d evelo p m en t stu d ie s in offering e x p la n a to ry frameworks
fo r u n d erstan d in g th e c o n tra d ic tio n s and crises g en erated by th e free-
m ark et paradigms o f th e 1 9 8 0 s. W hat was sp ecial a b o u t th e governance
id ea was th e ease w ith w h ic h it allowed even m ain strea m development
o rg a n isa tio n s to see e y e -to -e y e w ith critics o n t h e causes o f th ese con­
tra d ictio n s and crises. T h is ch a p ter explores w h a t precisely allows gov­
e r n a n c e to perform th is fu n c tio n , w here o th e r co n c e p ts m igh t not
h a v e succeeded, and th e im p lica tio n s o f th is see m in g acceptability.
E qu ally, th e co n cep t o f g o v e rn a n ce has e lic ite d a n ew wave o f critical
responses th a t aim to u n d erstan d the fu n d am en tally unequal nature of
re la tio n sh ip s betw een an d w ith in th e d eveloped an d developing parts
o f th e w orld. This ch a p ter also aim s to show w h y th e se critiques are so
relev ant to th e co n tin u a tio n o f th e core debates in developm ent studies.
For narrative ease, the ch a p te r is organised in th re e sections. Section one
discusses briefly the ev o lu tio n o f the concept and th e key conditions that
led to its rise. It focuses o n th e central d efin itio nal fram ew ork for gover­
n a n ce in developm ent studies, that o f 'good g o v ern a n ce'. It also demon­
stra tes how there are d iffe re n t shades to th is g o o d govern an ce idea
d ep e n d in g on th e p rin c ip le s and co n cern s o f th e sponsoring organ­
isatio n . Section two u np ack s th e apparent co n sen su s around governance
an d discusses the m ajo r areas o f debate around it. Sectio n three focuses
esp ecially on how th e c o n c e p t o f governance h a s b een used to further
a n in cisiv e u nd erstan d in g o f th e very u neq u al rela tio n sh ip s o f power
th a t d efine the co n cern s o f developm ent, and o f d evelopm ent studies.

Context and meaning

M a jo r e p iste m o lo g ic a l d e v e lo p m e n ts
In 1 9 8 9 , th e W orld B an k (W B ) published a re p o rt titled 'Sub-Saharan
A frica: From Crisis to S u sta in a b le G row th', w h ic h declared th at Africa
w as w itn essing a 'crisis o f g overn an ce' (W o rld B ank, 1 9 8 9 :6 0 ). This
o b serv atio n cam e at th e en d o f nearly a d e c a d e o f structural adjust­
m e n t, w hich had been th e basis o f a new w ave o f policy-oriented loans
b y th e W B, In te rn a tio n a l M o n etary Fund (IM F ), and oth er western
d o n o rs to several d ev e lo p in g countries (L an caster, 1 9 9 3 ; W illiam s and
Y ou ng, 1994). Structural A d ju stm ent Program m es o r SAPs reflected the
p red o m in an t n eo classical p o sitio n th at e x to lle d th e virtues o f th e free
m ark et and upheld th a t th e 'sta te 's e c o n o m ic ro le should be confined
 Governance in Development Studies 99

to assuring th e p ro p er fu n ctio n in g o f m a rk e ts as th e operativ e m e c h ­

anism of resource a llo ca tio n ' (Sklar and W h itak er, 1 9 9 1 :3 4 1 ). However,
the experiences o f SAPs in th e 1 9 8 0 s in A frica, and elsew here to o ,
decisively sh ow ed th a t ad ju stm en t w as a p o litica l m atter, w ith m a jo r
impacts of th e p ro d u c tio n and d istrib u tio n o f resources (L eftw ich ,
1994; Haggard an d K aufm an, 1989). W h a t also b ecam e clear d u rin g
this tim e was 't h a t th e a b ility to plan a n d im p le m en t a d ju stm en t was
largely a co n se q u e n ce o f b o th political c o m m itm e n t, capacity an d skill,
as well as b u reau cratic com p eten ce, in d e p e n d e n c e and probity' (H ealey
and R obinson, 1 9 9 2 ; cited in L eftw ich, 1 9 9 4 :3 7 0 ). As W orld Bank
President Barber C o n a b le put it, 'If w e are to achieve-d evelop m en t, w e
must aim for g ro w th th a t ca n n o t be e a sily reversed through th e p o lit­
ical process o f im p e rfe c t g overn ance' (C o n a b le , 1 9 9 2 ; cited in D o o rn -
boos 2 0 0 1 :9 8 ). T h e crisis o f govern an ce th e n , as described by th e W B,
referred to a crisis in areas th a t were n o t o ffic ia lly w ith in its d o m a in .
The Bank is c o n stra in e d by its Articles o f A g reem ent, w hich exp ressly
forbid taking n o n -e c o n o m ic co n sid era tio n s in to acco u n t in its o p era ­
tions (Articles 111 5 b , IV 10 and V 5c in W illia m s and Young, 1 9 9 4 :8 4 ).
It is with n o c o in c id e n c e th en , th at it is fre q u e n tly said th at 'th e in te r­
national c o m m u n ity , esp ecially th e W B a n d IMF, has taken refu ge in
the concept o f g o v ern an ce or institutions w h en referring to things p o lit­
ical' (Hyden, et a l., 2 0 0 4 :1 2 ; others like D oo rn b o o s, 2 0 0 1 ; G ibbon, 1 9 9 3 ;
Leftwich, 1 994; Lockw ood, 2 0 0 5 ; M artinussen, 1998a; and W illiam s and
Young, 1994; have voiced similar views).
While the c o n c e rn for sustained e c o n o m ic grow th continued to pro­
vide the p rincipal im petus for the th ru st o n governance,, a n u m b er o f
attendant factors are sign ifican t to consid er. Leftw ich (1994) regards th e
collapse of co m m u n ist regimes in Eastern Europe to be im p o rtan t in
shaping the em ergence o f western interest in governance. In his view, th e
'new international circum stances' after 1 9 9 0 m eant th at the 'w est' could
attach explicit p o litica l and institu tional co n d itio n s to aid w ith ou t fear
of 'losing its th ird w orld allies or c lie n ts to com m u nism ' (Leftw ich,
1994:369). M oreover, th e collapse o f co m m u n ist regimes discredited
those political sy stem s as 'bureaucratically sclerotic', 'n o n -d em o cratic'
and 'inefficient', w h ile upholding elem en ts o f w estern political system s
(in the USA an d W estern Europe) such as p olitical liberalisation and
administrative d ecen tralisatio n (World Bank, 1991; as cited in Leftw ich,
1994:369). This association o f western liberal dem ocracy with governance
has continued to b e an abiding one w ithin m ainstream discourse.
Historically to o , th e 1 9 8 0 s w itnessed p ro -d em o cracy m o v em e n ts in
Latin America, th e P h ilip p in es and Eastern Europe, stim ulating sim ilar
100 Governance Theory and Practice

m o v em e n ts elsew here (H u n tin g to n , 1 9 9 1 ; as cited in L eftw ich , 1994).

In Africa fo r exam ple, betw een 1 9 8 9 and 1992, a c o m b in a tio n o f inter­
nal and ex te rn a l pressures put a w h o le h ost o f co u n tries o n th e path of
d ém o c ra tisa tio n , th ou gh n o t w ith o u t resistan ce fro m incum bent
regim es (L eftw ich , 1 9 9 4 ). T h e se ev e n ts proved to b e s e m in a l in legit­
im ising th e w est's preference for liberal dem ocratic system s, as opposed
to c o m m u n ism , and laid th e g ro u n d for th e activ e p u rsu it o f démo­
cratisatio n to prom ote g ov ern an ce. O thers have c o m m e n te d th a t a dis­
tin c tio n n eed s to be m ade b e tw e e n th e B retton W o o d s institutions
(WB an d IM F) and th e US G o v e rn m e n t, as 'p ro m o tin g democracy
abroad is n o t a new policy fo r th e U n ited States' (L a n ca ste r, 1993:12).
She view s su ch em phasis in W a sh in g to n as a 'p ra c tic a l resp o n se to a
variety o f d o m estic p o litical im p e ra tiv e s.... such as fin d in g a rationale
for a $ 1 5 b illio n a year fo reig n aid program m e' (L a n ca ste r, 1993:13).
Still o th e rs like Barya (1 9 9 3 ) an d G ills and Rocam ora (1 9 9 2 ) regard the
co n cern fo r d em ocracy as a cle a r m an ifestatio n o f th e 'o n w a rd march
of g lo b al cap italism , w h ich h ad b e e n delayed by th e b ip o la r w orld' (as
cited in L eftw ich , 1 9 9 4 :3 7 0 ). In d eed , th e m otives fo r th e pursuit of
d ém o c ra tisa tio n throu gh g o v e rn a n ce are am on gst th e m o s t contested
w ith in th e D evelop m ent Stu d ies literatu re. T his is p e rh a p s because
they, m o re th a n an y th in g else, reveal th e fallacy o f th e 'apolitical'
stance ad op ted by the in te rn a tio n a l d onor co m m u n ity u n d er th e cover
of g o v ern an ce, w hile dealing w ith m atters th at are e x p lic itly political.
T h e se issu es are clearly re flected by th e progression o f ev e n ts in the
ad o p tio n o f th e g ov ern an ce id ea by th e in te rn a tio n a l d o n o r com­
m unity, w ith th e WB in th e lead (see Uvin, 1993; as cited in Doornboos,
2 0 0 1 :9 8 for m o re in fo rm a tio n ). In 1 9 9 1 , th e W B co n v e n e d its Annual
D ev elo p m en t E conom ics C o n fe re n c e w ith th e ex p ress purpose of
discussing its future agenda, w h ic h in principle co m p rised n o th in g less
th an a 're fo rm o f po litics in aid -d ep en d en t co u n trie s' (Su m m ers and
Shah, 1 9 9 7 ; as cited in D o o rn b o o s, 2 0 0 1 :9 8 ). A m id st considerable
u n c e rta in ty regarding th e e x te n t to w h ich th e g o v e rn a n c e idea could
be cast in political term s, th e n o tio n o f 'good' g ov ern an ce em erged as a
necessary in stru m en t en ab lin g th e lau nch o f a new g e n e ra tio n o f polit­
ical c o n d itio n a litie s . T h e u se o f th e 'g o o d g o v e rn a n ce ' th e m e to drive
p o litica l and in stitu tio n al re fo rm s o f a particular so rt th ro u g h aid,
m arked a w atershed in th e c h a r a c te r o f in te rn a tio n a l d ev elo p m en t. It
has b ee n clo sely related to strateg ies o f in stitu tio n al g lo b a lisa tio n , and
'p ro v id es a h an d le for th e fo rm u la tio n o f p o litica l con d ition alities
by e x te rn a l actors, w hich p rev io u sly did n o t d isp ose o f "politically
o rie n te d " in stru m en ts for in te rv e n tio n and d ire c tio n ' (Doornboos,
 Governance in Development Studies 101

2000:63). This sort o f in terv e n tio n sim u ltan eo u sly marked a break fro m
previous ideas as 'n a tio n a l sovereignty' and 'n o n -in terferen ce in in tern a l
affairs', for long h eld in h ig h esteem in in te r n a tio n a l p o litics (D o o rn -
boos, 2 0 0 1 ). T here is a ls o th e view th a t p o litic a l co n d itio n a litie s h a v e
long accom panied aid p ro v isio n w ith d e c isio n s on co u n try aid a llo c a ­
tions being in flu en ced b y strategic, d ip lo m a tic and id eological c o n ­
siderations. How ever, D o o rn b o o s m a in ta in s th a t 'th e new strateg y o f
externally led p o litic a l reform should n o t b e co n fu sed w ith ea rlie r
examples o f ex tern a l p o litic a l pressures to d em an d a particular p o licy
position’ because th e 'p o s in g o f dem ands o n th e o re tic a lly so v ereig n
states regarding th e m a n n e r in w hich th e y sh o u ld organise th e ir in s ti­
tutional apparatus, p o lic y im p lem en tin g p ro ced u res and ind eed th e ir
political systems, g oes a step further' (2 0 0 0 : 6 6 ). In practice, th e rise o f
good governance fu rth e r facilitated th e e x te n s io n o f c o n d itio n a litie s
around aid p ro g ram m es. T h ese were b o th e c o n o m ic (such as k eep in g
inflation below 7% p e r an n u m , or re m o v in g subsidies on fertilise rs)
as well as political ( n o ta b ly m oving to a m u lti-p a rty system an d p ro ­
moting freedom o f press) in nature.
Although th e W B h a s fo r several years stu ck to a strictly n o n -p o litica l
projection of g o v ern an ce, it has also accep ted th e role o f secretariat fo r
various donor c o n s o rtia stip u latin g th e p o litic a l as well as e c o n o m ic
cond itionalities th a t h a d to be m et. T h is h a s g iv en it th e e x tre m e ly
strategic position, o f fo rm u la tin g , g u id in g an d m o n ito rin g p o litic a l
conditionalities, w ith o u t actually co m p rom isin g its stated n o n -p o litical
mandate (D oornboos, 2 0 0 1 ; G ibbon, 1 9 9 3 ; M artin u ssen , 1998a). H ow ­
ever, further evidence o f n o n -co m p lian ce an d p artial reform s th a t c o n ­
ditionalities en g en d ered in recipien t c o u n trie s led to th e view th a t
conditional aid was a n in e ffe ctiv e in stru m e n t o f p o licy ch an g e, an d
that recipient g o v e rn m e n ts needed to 'o w n ' th e ir reform s th e m selv es
(Killick, 1998). T h is le d to th e argum ent th a t co n d itio n a lity o u g h t
to be abandoned a lto g e th e r, and 'se le c tiv ity ' shou ld be ad opted as
a guiding princip le in le n d in g , w ith d o n o rs 'se le ctiv e ly giving aid to
countries that alread y o w n ed reform s th a t d o n o rs liked ' (Lockw ood,
2 0 0 5 :5 4 ). The sh ift fro m co n d itio n a lity to se le c tiv ity was sta u n ch ly
advocated by th e W B in its 1998 report titled A ssessin g Aid, n ick n am ed
the Dollar Report a fte r its principal a u th o r (o th e r W B p u b lica tio n s
endorsing this shift in c lu d e C ollier and D o llar (1 9 9 9 ) and D evarajan et
al. (2 0 0 1 ). T his rep o rt arg u ed th at 'good ' p e rfo rm e rs are better ab le to
absorb and utilise aid a n d th erefo re se le c tiv ity in aid d isb u rsem en t is
rationalised as th e m o s t 'co st-effe ctiv e ' and 'resu lts-o rien te d ' stra teg y
for donors. This view w as qu ickly endorsed b y large parts o f th e d o n o r
102 Governance Theory and Practice

co m m u n ity , an d is p ractised (albeit to d iffe rin g degrees) by th e WB,

th e US and D u tch g o v e rn m en ts and th e UK. Lockwood sig n ifica n tly
observes that 'w h ile m a n y donors have em b race d selectivity, th e y have
n o t actually a b a n d o n e d co n d itio n a lity , b u t rath er practise c o m b in a ­
tio n s o f b o th ' ( 2 0 0 5 :5 4 ) . Yet, th e idea th a t 'g o o d policy en v iro n m en ts'
m attered for aid to n u rtu re reform has u n m ista k a b ly in flu en ced donor
th in k in g in re c e n t y ears. M ore and m o re d o n o rs have relied o n th e
c o n c e p t of good g o v e rn a n c e to guide th e ir 'se le ctiv e ' aid a llo ca tio n s,
b u t n o t w ithout d ifficu lty , a them e to w h ic h w e return in sectio n two.

'G o o d 'g o v e r n a n c e
T h e rise o f th e g o v e rn a n c e agenda served a very particular p u rp o se for
d o n ors like th e W B . It allow ed th em to m o v e away from a narrow
fo cu s on th e m a rk et, an approach w h ic h h ad proved to be d isastrous
th rou g h the 1 9 8 0 s, an d engage m ore b ro a d ly w ith other types o f in sti­
tu tio n s as w ell. As discussed earlier, th is is m o st visibly m a n ife sted in
th e lau nch o f b ro a d e r co n d itio n alities to d o w ith political an d in stitu ­
tio n al reforms. In th is co n tex t, the 1997 p u b licatio n o f the W B 's W orld
D ev elop m ent R ep o rt (W D R) T he S tate in a C han g in g W orld sig n a ls an
im p o rtan t ep iste m o lo g ic a l landm ark in th e m akin g o f a new a n d very
pow erful d ev e lo p m e n t discourse, i.e ., t h e re-en try o f th e s ta te into
in tern atio n al d ev e lo p m e n t. It argued th a t states m ust b ecom e ‘credible
partn ers' in a c o u n tr y 's d evelop m ent, a n d w h erein th ey lack th e cap­
a city to do so, s u c h cap acity can be rein v ig o rate d . Precisely in this
d efin itio n , th e B a n k h a s carved a space fo r itself and oth er d o n o rs to
get involved in th e b ro ad er internal affairs o f recipien t co u n tries. This
issue o f state c a p a c ity h as been in terp reted by and large in te rm s of
in stitu tio n a l ca p a city , an d 'good g o v e rn a n c e ' broadly asso ciated w ith
th e forging of v a rio u s types o f 'd esirable' in stitu tio n a l reform s. In one
sw ift stroke, th e re fo re th e em phasis o n g o o d governance a p p eared to
acq u it th e WB an d o th e r developm ent o rg a n isa tio n s from a ccu sa tio n s
o f th e parochialism o f th e free-m arket id ea.
Th e rise of good g o v ern an ce has been u nd erstood as m arking a depar­
ture from the th e o re tic a l principles o f th e New Political E co n o m y (NPE)
th at dominated in th e 1980s, with their rath er negative views o f th e state
as 'predatory' and co rru p t and corresp ond in gly laudatory view s o f the
m arket as efficient and conducive to in d ivid u al freedom (see C olclou g h
and M anor, 1 9 9 1 ; N o n n em an , 1996). In fact, th e current em p h asis on
governance reflects an astute recognition o f th e lim itations o f NPE w hich
assumes that tran sactio n s between eco n o m ic actors are relatively costless,
and an end orsem ent o f th e New In stitu tio n a l Econom ics (NIE) w hich
 Governance in Development Studies 103

explicit^ so u g h t to explain h o w an d w hy in stitu tio n s w ere n ecessary

in order red u ce th ese tra n sa ctio n co sts th a t arose fro m th e essen tial
uncertainty characterising all h u m a n transactions. G o v ern an ce policies
of the 1990s all focus on the cen trality o f institutions. D oorn boos (2000)
comments th a t governance in th is respect, is the latest in a w h ole series
of concepts th a t have been p ro p o se d to understand th e in stitu tio n a l
dimensions o f state-society re la tio n s an d guide in te rn a tio n a l d evelop­
ment in te rv e n tio n s (precursor c o n c e p ts inclu d e cap acity -b u ild in g ,
institution-building, in stitu tio n a l developm en t, in stitu tio n a l reform
etc.). G ov ern ance is undoubtedly th e m ost flam boyant o f all th ese co n ­
cepts, for it allow s donors to ad d ress m atters broader th a n th e govern­
ment, to in c lu d e various types o f in stitu tio n s from th e o fficia l state
apparatus to m arket in stitu tio n s, to in stitu tio n s from th e civil society
or voluntary sector, and all w ith o u t exp licitly talking abo u t politics.
Nearly ev ery active in te rn a tio n a l d evelopm ent o rg a n isa tio n in the
world to d ay sports its own d e fin itio n o f good governance. T h ese defin­
itions are d escribed as being 'p o licy -o rie n te d ', but a fu rth er d istin ction
has been m ad e on ad m inistrative-m anagerial and m ore lim ited under­
standing o f governance, as associated w ith the WB and a m o re political
understanding o f th e same as asso ciated w ith western govern m en ts. He
clarifies th a t w h ile th e latter in v o lv e s a co n cern for so u n d ad m in is­
tration, it also inclu des an in s is te n c e o n co m p etitive d em o cra tic p o l­
itics. Yet, w h ile th is divide m a y h a v e been co n sp icu o u s in th e early
1990s, it h a s in creasingly n arro w ed over th e years for tw o reasons.
Firstly, as discussed earlier, th e W B itself has taken an e x p lic it in terest
in the state and its fu n ctio n in g , p articu larly in p articip ato ry d ecisio n ­
making a n d d em o cratically e le c te d regim es (apropos its 1 9 9 7 report
The State in a C hanging W orld) d esp ite retaining an o verall ap o litical
stance (M artin u ssen , 1998a). T h is is also th e result o f in crea sin g pres­
sures from W estern bilateral d o n o rs to address aspects o f g ov ern an ce
concerning th e 'fo rm ' o f p o litical regim e and not lim it itse lf m erely to
the cap acity o f governm ents to d esig n , form ulate and im p le m e n t p o l­
icies and d isch arg e fu n ctions (H y d en e t al., 2 0 0 4 :1 5 ). S eco n d ly , th e
loaded p o litic a l overtones o f th e B a n k 's em phasis o n th e ad m in is­
trative and m anagerial aspects o f govern an ce have been b ette r exposed,
with the re co g n itio n that good g o v e rn a n ce is a 'fu n ctio n o f state char­
acter and ca p a city w hich is in tu rn a fu n ctio n o f p o litic s '. T his has
led to in c re a s in g accep tance o f th e p o litical ch aracter o f 'g o o d gover­
nance', as exem p lified by th e g ro w in g practice o f u sin g d ém o crat­
isation as a n ex p lic it co n d itio n a lity o f aid (Barya, 1 9 9 3 ; an d Healey
and R obinson, 1 992; cited in D o o rn b o o s, 2000).
104 Governance Theory and Practice

W h a t is also interesting is th a t th e various d efin itio n s o f good gover­

n an ce are sim ilar in m any respects, but there are also a few critical points
o f d iffere n ce especially in th e w ay particular p rin cip les are emphasised
and p rio ritise d . The W B 's p o s itio n on g o v ern an ce w as first outlined
fully in a d efinitive statem en t in a report titled G ov ern an ce a n d Develop,
w en t in 1 9 9 2 , w here it d efined g ood govern ance as 'sy n o n y m o u s with
sound d ev elo p m en t m a n a g e m e n t' (W orld Bank, 1 9 9 2 :1 ). T his policy
d o cu m e n t focuses on fou r m a in areas o f p u b lic ad m in istratio n in
general and public sector m an ag em en t in particular, w h ic h it considers
to be w ith in its m andate:

a) A cco u n ta b ility - w hich in essen ce m eans h o ld in g o fficia ls account­

a b le for th eir actions.
b) A leg al fram ew ork for d ev elop m en t - w hich m ean s a structu re of rules
a n d law s th a t provide cla rity , pred ictability an d sta b ility for the
p riv ate sector, w hich are im p artially and fairly a p p lied to all, and
w h ic h provide th e b asis fo r co n flict re so lu tio n th ro u g h an inde­
p e n d e n t judicial system .
c) I n fo rm a tio n - by w h ich is m e a n t th a t in fo rm a tio n a b o u t economic
co n d itio n s, budgets, m arkets and governm ent in te n tio n s is reliable
a n d accessible to all, cru cial for private sector o p eratio n s.
d) T ran sp aren cy - w h ich is b asically a call fo r o p e n govern m en t, to
e n h a n c e a cco u n ta b ility , lim it corru p tion and stim u la te consulta­
tiv e processes betw een g o v e rn m en t and p riv a te in terests over
p o licy docum ents (L eftw ich 1 9 9 4 : 372).

F ollo w in g th is d efin itio n , a n u m b er o f o th er in te rn a tio n a l organ­

isa tio n s and d onor ag en cies ca m e up w ith su p p o rtin g d efin itio n s that
clo sely resem bled th e W o rld B an k 's em phasis to th e e x te n t th at some
or all o f th ese principles w ere alw ays included. H ow ever, th ey were not
all id e n tic a l. It is in stru ctiv e to con sid er a few o f th e follow ing. The
IMF sees itse lf as an estab lish ed ad vocate having a n d focu ses on three
key areas o f g overnance, w h ic h are related to its ro le o f maintaining
su rv eilla n ce over m a c ro e c o n o m ic m an ag em en t: th e transparency of
g o v e rn m e n t accounts, th e effectiv en ess o f p u b lic reso u rce manage­
m e n t, an d th e stability an d tran sp aren cy of th e e c o n o m ic and regula­
tory e n v iro n m e n t for p riv ate secto r activity (IM F, 1 9 9 7 ). To the Asian
D ev elo p m en t Bank (ADB), g oo d governance is likew ise seen as integral
to its strateg y to reduce p o v erty and ensure th e e ffic ie n t management
o f re so u rces in public fin a n ce s. T h is includes ch a lle n g e s o f a consti­
tu tio n a l n atu re th at estab lish rules o f po litical co n d u ct, creative inter­
 Governance in Development Studies 105

ventions to change rules an d structures, an d th e n atu re o f in te ra c tio n s

and types of re la tio n sh ip s betw een states, c itiz e n s and o th e r a cto rs.
The ADB has id en tified fo u r critical o b je c tiv e s o f g o v ern a n ce to g u id e
its work: accou n tability, p articip ation, p re d icta b ility and tran sp aren cy.
It concentrates its a c tiv itie s in a further e ig h t areas o f 'good g o v e r­
nance' practices, an d th e s e inclu d e a n ti-c o rru p tio n , co rp o ra te re g u ­
latory frameworks, leg al an d ju stice refo rm , p a rtic ip a tio n o f th e civ il
society in public d ecisio n -m a k in g , p ro -p o o r serv ice delivery, p u b lic
adm inistration, p u b lic fin a n cia l m a n a g em e n t an d su b -n atio n al/ lo cal
governance.
The World Bank, IMF and ADB's definitions co n cen tratè on the qu ality
of governm ent in p ro v id in g efficien t serv ices and creatin g a sta b le
environment for th e w o rk in g o f th e private secto r. O f th e three, ADB is
the only organisation th a t specifically m e n tio n s p articip atio n as a co re
governance o b je ctiv e as w ell as an area o f g o v e rn a n c e p ractice, b u t
here too, the w eight o f th e em phasis (as e v id e n t fro m th e m a jo rity o f
its governance p ractices) is n o t on p a rticip a tio n . W e see a fairly d iffer­
ent picture w hen w e e x a m in e th e d e fin itio n s o f g ood g o v ern a n ce o f
three other o rg a n isa tio n s: th e Swedish In te r n a tio n a l D ev elo p m en t
Agency (SIDA), C a n a d ia n In tern a tio n a l D e v e lo p m e n t Agency (C ID A )
and the Office o f th e U n ited N ations High C o m m issio n e r for H u m an
Rights (OHCHR). Each o f th ese organisations sp ecifically relates its c o n ­
ceptualisations o f g o o d g o v ern an ce to d é m o c ra tisa tio n m o re b ro a d ly
and to hum an rig h ts in p articular. For SID A , g ood g o v ern a n ce is a
subset o f d em ocratic g o v ern an ce, and is lin k e d to issues c o n c e rn in g
democracy, h u m an rig h ts, popular p a rtic ip a tio n an d th e p rin cip les o f
the rule o f law (SIDA, 2 0 0 7 ). As for CIDA, g oo d g overn an ce is d escribed
as the effective, h o n e st an d acco u n tab le e x e rc is e o f pow er by g o v e rn ­
ments. It is closely lin k ed to hum an rights a n d d ém o cratisation o n th e
basis th at all th ree h a v e co m m o n u n d e rly in g values, w h ich in c lu d e
respect for hum an righ ts, ju stice, equity, p a rticip a tio n and a cco u n ta b il­
ity (CIDA, 1996). T h is la tte r set o f c o n c e rn s is m o st u n e q u iv o ca lly
articulated by th e O H C H R w hich end orses a rights-based a p p ro a ch
to governance. Its u n d e rly in g principles m irro r th o s e listed by C ID A ,
though more ex p licit m e n tio n is m ade o f n o n -d isc rim in a tio n , a tt e n ­
tion to vulnerability, em p o w erm en t and th e fo rg in g o f links to in t e r ­
national hum an righ ts in stru m en ts (U nited N atio n s, 2 0 0 2 )
The Department for In tern atio n al D ev elo p m en t (DFID) has co n sid er­
ably advanced th in k in g o n governance w ith its 2 0 0 1 Target S tra te g y
Paper called 'M aking G o v ern m e n t W ork fo r P o o r P eop le'. DFID h a s
zeroed down on seven key 'governance cap ab ilities' th a t it believes th a t
106 Governance Theory and Practice

states n eed to develop, in p a rtn ersh ip w ith th e private se c to r and civil

society, in o rd er to m eet previously defined In tern atio n al Development
Targets (ID T s). T h e International D evelop m ent Targets b ro a d ly classified
into th ree categ ories - eco n o m ic w ell-being, social and h u m a n develop,
m ent an d en v iro n m en tal su stain ab ility and regen eration - h ave been
agreed b y th e entire UN m em b ersh ip , follow ing a series o f summit
m eetings h e ld b y th e UN and its specialised agencies o v er th e past ten
years or so.
T hese g o v e rn a n c e cap ab ilities c o n ta in a fair m ix o f em p h a sis on
issues related to th e quality o f g o v e rn m e n t and ad m in istra tio n and the
provision o f a sound m a c ro e co n o m ic en v iro n m en t (as a sso cia ted with
the W B, IM F and ADB's d efin itio n s) as well as w ith b ro a d er issues to do
w ith d é m o c ra tisa tio n and rig h ts-b a se d d evelop m en t. T h e s e key capa­
bilities are liste d as follow s: a) o p e ra te po litical system s w h ic h provide
o p p o rtu n ities for all th e people, in clu d in g the poor an d disadvantaged,
to in flu e n c e g ov ern m en t p o lic y and practice; b ) p ro v id e macro-
eco n o m ic sta b ility and facilitate p riv ate sector in v e stm e n t an d trade so
as to p ro m o te th e growth n ece ssa ry to reduce p o v erty ; c ) im plem ent
pro-poor p o lic y and raise, a llo c a te an d acco u n t for p u b lic resources
acco rd in g ly ; d) guarantee th e e q u ita b le and u niv ersal pro visio n of
effectiv e b a s ic services; e) e n su re p erson al safety a n d secu rity with
access to ju s tic e for all; 0 m a n a g e n atio n al secu rity arrangem ents
a cc o u n ta b ly an d to resolve d iffe re n c e s betw een c o m m u n itie s before
they d evelop in to violent co n flicts; an d g) develop h o n e s t and account­
able g o v e rn m e n t th at can c o m b a t corru p tion (DFID, 2 0 0 1 ).
In su b seq u en t years, and u n lik e m a n y other donors, D FID has moved
away fro m th e 'g ood g o v e rn a n ce ' agenda by fo cu sin g in ste a d on the
idea th a t e a c h co u n try has its o w n p articular agents, in s titu tio n s and
structu res th a t drive ch ange, a n d th e se need to b e u n d e rsto o d and
addressed. T h is n o tio n lies at th e h eart o f w hat it d e scrib e s as the
'D rivers o f C h a n g e ' (DOC), an a n a ly tic a l fram ew ork d ev elo p ed inter­
nally w ith in DFID to enable it to 'in te ra c t w ith th e p o litic s o f develop­
m ent' (W arren er, 2 0 0 4 :1 ). In p ractice , th e DOC approach h as led to the
c o m m issio n in g o f broad-based co u n try -sp ecific p o litic a l analyses by
DFID c o u n tr y offices, w ith co m m issio n e d inp uts fro m ex te rn a l con­
su ltants, to in fo rm th e d e v e lo p m e n t o f th eir co u n try a ss is ta n ce plans
(DOC T e a m , DFID 2 0 0 6 ). T w e n ty tw o such studies h a v e b e e n under­
taken so far, an d there are a tte m p ts to co n d u ct D O C stu d ie s in parti­
cular se c to rs, as for exam ple s o c ia l p ro tectio n in Z a m b ia . However,
while th e D O C approach is c o n c e p tu a lly savvy and h as b ee n welcomed
by DFID s ta ff in m any co u n tries fo r its reco g n itio n o f 'p o litic a l obsta­
 Governance in Development Studies 107

cles' (W arrener, 2 0 0 4 :5 ), it is unclear w hether its sophisticated approach

to govern an ce will tr a n s la te in to practicable le n d in g strategies given
the presen ce o f various c o n stra in ts faced b y d o n o rs. These in clu d e
the presence o f lim ited resou rces, need to p ro d u ce clear outcom es and
seek w ider public le g itim a c y (C h h o tray and H u lm e, 2 0 0 8 for a c o m ­
prehensive treatm ent).
A few o th er d onors h a v e tried to share D FID 's brave co n cep tu al
attem p t to lo cate ideas a b o u t governance in th e em p irical realities o f
particular cou ntries. N o ta b le endeavours in c lu d e SIDA's 'pow er a n a ­
lysis' and a m u lti-d o n o r in itia tiv e w ithin th e D ev elo p m en t A ssistance
C o m m ittee (DAC) to u n d e rsta n d better th e p o litic a l and in stitu tio n a l
co n texts shaping the in c e n tiv e s o f key actors. All th e se attem pts reveal
that donors are increasingly aware o f the ‘very u nsettlin g questions about
the "good governance'' agend a', and of how little is actually known about
the 'key causal linkages - b etw een institutions and grow th, growth and
corruption, democracy and poverty reduction - and about w hich reforms
to p rio ritise in d ifferen t c o u n try circu m stan ces' (U n sw orth , 2 0 0 5 :9 ).
The w ork o f scholars lik e G o ld sm ith (2 0 0 3 , cite d in U nsw orth, 2 0 0 5 )
and C h a n g (2 0 0 2 ) hav e b e e n particularly in flu e n tia l in th is respect.
They take a historical ap p ro a ch to question th e 'g o v ern an ce first' m odel
of e c o n o m ic d ev elo p m en t b y d em onstrating th a t th is was n ev er th e
case in developed co u n tries w h ere in stitu tio n s aro se in crem en tally, in
response to particular circu m sta n ces and crises.
W h ile these initiatives are encouraging, th e y do n o t detract from th e
fact th a t th e good g o v e rn a n ce agenda in d ev elo p m en t rem ains largely
identified w ith th e v a lo risa tio n o f p re d o m in an tly w estern co n cep ts
and p rin cip les. Leftw ich w rite s how this c o n c e p tio n o f governance is
'u n ex ce p tio n a l, it re -id e n tifie s precisely th e p rin cip le s o f ad m in istra­
tion th a t have long b e e n argued as being o f b e n e fit to developing
cou ntries.. .these are im p eccably Weberian in spirit' (Leftwich, 1994:372).
Equally, it is hard to m iss th e very large range o f o b jectiv e s (from a n ti­
corruption to hum an rights) encom passed w ith in th e co n cep t o f gover­
n an ce, le n d in g it a m y ste rio u s quality. And w ith larger num bers o f
donors em bracing sele ctiv ity in lending, 'good g o v e rn a n ce ', w hatever
it m ay b e understood to b e, is now assumed to be present to begin
with, an d 'bad g o v e rn a n ce ', posed as th e o p p o site o f th e 'good', will
rem ain so unless the re c ip ie n t cou ntry is keen e n o u g h for aid to revise
its g o v e rn a n ce structures first (D oornboos, 2 0 0 1 ; M artin ussen , 1998b ).
This in fa c t is th e stated p h ilo so p h y o f th e US M ille n n iu m C hallen ge
Account, th e Bush ad m in istra tio n ’s flagship big-bud get schem e recently
lau n ch ed in 2 0 0 2 at M o n te rre y . Th e key p o in t re m a in s th at there is a
108 Governance Theory and Practice

strik in g lack of clarity a b o u t th e various aspects o f its m eanin g (Doorn­

b o o s, 2 0 0 0 ; W illiam s, 1 9 9 6 ) . Indeed, it could b e said th a t th e lack of
sp e cificity o f th e g o v e rn a n ce idea has allow ed it to b e like a flexible
carrier, w hich can b e u sed to con vey varying c o m b in a tio n s o f m es­
sages, w hile appearing to b e co h e re n t and o b je c tiv e . T h is 'elasticity' of
m e a n in g , as D oornboos (2 0 0 0 ) calls it, has b een th e precise strength of
th e c o n c e p t for d o n ors a n d policy-m akers. O th e rs lik e G oran Hyden
(1 9 9 2 ) have argued th a t th is elasticity or fle x ib ility is w hat stands gov­
ern an ce apart from oth er co n cep ts and underpins its conceptual strength.
H yd en rem arked th a t th e ad van tag e o f th e g o v e rn a n c e co n cep t was
th a t ‘it does n o t p reju d ge th e locu s o f actu al d ecisio n -m a k in g , w hich
could be w ithin the state, w ith in an in tern ational o rganisation or within
so m e o th e r structural c o n t e x t ’ (1 9 9 2 :6 ). D o o rn b o o s agrees th at in this
regard, th e governance c o n c e p t 'facilitates new a n a ly tica l pursuits into
th e ex ercise of p o litical p o w er, u nhind ered by fo rm a l boundaries, and
m a y fit discourse an aly sis, em bedded stru ctu ralism an d m ainstream
th in k in g alike’ ( 2 0 0 1 :9 6 ) . L ittle w onder th e n , th a t govern an ce has
b e e n rich ly assim ilated w ith in d evelopm en t p a rla n ce , b o th by its pro­
p o n e n ts and its adversaries.

Consensus or not? Major tensions within 'good' governance

T h e im pressive show o f su p p o rt for good g o v e rn a n ce by a vast array of
in te rn a tio n a l d ev e lo p m e n t o rg an isatio n s an d w estern governm ents
m ig h t lend th e im p ressio n o f con sensus. T h e re is hard ly any doubt
th a t th e co n cep t o f g o o d g o v ern an ce h as b e e n ex tre m e ly influential
and pervasive for all th e re a so n s discussed so far. B u t at the same time,
it is eq u ally true th a t n o m a tte r how c o h e re n t d ev e lo p m e n t discourse
ap pears to be around g o o d govern an ce, th e re are m a jo r ten sion s th at
c o n tin u e to splinter su p p o rt fo r it. Each o f th e se te n s io n s arises from
th e very p o litical n a tu re o f th e co n cern s th a t c o n s titu te governance
(in d ee d , problem s a risin g fro m th e ex clu sio n o f th e s e co n cern s were
w h a t had led to th e fo c u s o n g overnan ce to b e g in w ith ). T he first
relates to th e qu estion o f m e th o d ; how is g o v ern an ce, so defined, to be
im p le m en ted by d o n o rs, an d in w hat ways g o v e rn a n ce criteria can
fa c ilita te effective aid p o lic y th a t m eets its o b je c tiv e s . Th e second
re la te s to th e specific g o v e rn a n c e co n cern w ith d ém o cra tisa tio n , and
w h eth er it is at all feasible to lin k donor attem p ts at creating good gov­
e rn a n c e w ith th e c o n s titu tio n o f d em o cratic p o litic a l system s. There
are disagreem ents b o th o n w h eth er it is at all rig h t fo r donors to in ter­
v e n e in th e co n stitu tio n o f d em ocracy as w ell as w h a t m ight be th e
 FLACSO - Biblioteca
Governance in Development Studies 109

best way of d o in g so. T h e third m a jo r area o f d ebate and re fle c tio n

in vo lv es the im p lica tio n s o f popular g o v e rn a n ce related policies for th e
role of the state. . -

Governance a n d a id
The frustrating e x p e rie n ce o f im p le m en tin g e co n o m ic co n d itio n a litie s
through stru ctu ral a d ju stm en t in th e 1 9 8 0 s led to th e em p h a sis o n
political co n d itio n a litie s throu gh an em p h a sis on good g o v e rn a n ce in
the 1990s. But th e re was n o reason to e x p e c t th a t im p le m en tin g p o lit­
ical co n d itio n alities should have b e e n a n y easier, and very s o o n , it
became evid ent th a t im p le m en ta tio n w as a n y th in g bu t easy. T h e re
were a num ber o f p ro b lem s en co u n tere d b y th e W B and o th e r d o n o rs
in this regard. O n e, th ese co n d itio n a litie s w ere com p lex, co m p risin g a
multitude of p o licy o b jectiv es, and th e re was n o way to d eterm in e th e
extent to w hich it w ould be possible to m o n ito r com p liance. Structu ral
adjustment lo an s, w h ic h constitu ted e c o n o m ic co n d itio n a lities, co u ld
have as m any as 1 0 0 d ifferent policy in stru m e n ts th at require co m p lex
and disparate p o lic y ch an g e and in v o lv ed co n d itio n s th a t th a t co u ld
not be achieved in a sh o rt period o f tim e . T h e re was no w ay o f c h e c k ­
ing hard-pressed d ev elo p in g countries pled gin g co m m itm e n t to u n d er­
take structural ad ju stm en t even w hen th e y had absolutely n o in te n tio n
of doing so. Tw o, lo c a l recep tion o f p o lic y co n d itio n a litie s , w h e th e r
economic or p o litic a l, was in trin sica lly tied up w ith lo cal p o litica l
processes and im p le m e n ta tio n freq u en tly pred icated u pon b a rg a in in g
with local p o litica l elites (see H arrison's (1 9 9 9 ) fa scin atin g p ie c e o n
conditionality an d a d ju stm en t in M o z a m b iq u e). D onors in c re a sin g ly
realised that p o litica l co n d itio n alities o n ly in trod u ced new an d u n p re­
dictable elem ents in to th e policy process an d created very d ifficu lt situ ­
ations for d onors an d recipients alike (D o o rn b o o s, 2 0 0 1 ). D on ors w ere
at risk of 'g ettin g fu rth e r enm eshed in th e in te rn a l p o licy p rocesses o f
recipient co u n tries th a n th e y th o u g h t th e y had b arg ain ed fo r'
(Doornboos, 2 0 0 1 :1 0 2 ; H arrison, 1 9 9 9 ). T h is was to be cu m b e rso m e
and difficult, an d w ou ld lead to a stra te g ic reo rien tatio n o f d o n o r
policy, w hich has gradually shifted sin ce, fro m co n d itio n ality to 'se le c­
tivity'. As discussed earlier; th is was e x p e cte d to save th e d o n o rs fro m
having to m o n ito r attem p ts at 'a m e lio ra tin g ' p o licy processes tow ards
'good governance'.
However, th e m o v e to selectivity b ro u g h t w ith it its ow n set o f p ro b ­
lems, as d onors still need ed to c o n c e p tu a lise w h at th e y regarded as
desirable p o licy e n v iro n m e n ts tow ards w h ic h aid could b e selectiv ely
directed. C o u n tries w h ic h did n o t p o ssess su ch en v iro n m en ts, b u t
110 Governance Theory and Practice

n ee d ed aid, would hav e to ch an g e and m ove tow ard s th is ideal. The US

M ille n n iu m C hallenge A cco u n t (MCA) takes th is prin cip le to its logical
e x tre m e . MCA is a new fo re ig n aid program m e a n n o u n ced by th e Bush
a d m in istra tio n in 2 0 0 2 d esign ed to provide su b sta n tia l new foreign
a ss is ta n c e to lo w -in co m e co u n tries th at are 'r u lin g justly , investing in
th e ir peop le and en co u rag in g econ om ic fre e d o m '.1 O n ly countries that
h a v e su ccessfully d e m o n stra te d , largely th ro u g h q u an tifiab le scores
th a t th e y m eet all 16 in d ica to rs th at have b e e n devised to satisfy these
th r e e criteria w ill be e lig ib le to receive aid. T h e s e in d ica to rs were sup.
p lie d b y o rg an isatio n s lik e th e W B, Freed om H ouse and Heritage
F o u n d a tio n . MCA re fle c ts a p h ilosoph y th a t h a s b een clearly articu­
la ted b y conservative th in k -ta n k s like the H eritage Foundation th at the
fa ilu r e o f US overseas d ev e lo p m e n t assistan ce is n o t due to lack of
fu n d in g bu t because p ast g overn m ents had m isd irected aid to govern­
m e n ts w ith bad p o licy en v iro n m en ts, or in fa c t bad governance. MCA
c la im s to be re su lts-o rie n ted and very tig h tly m o n ito re d , but in fact,
't h e c h o ice and co n stru ctio n o f particular p erfo rm a n ce indicators; their
m o n ito r in g and m e a su re m e n t by neoliberal A m erica n and American-
d o m in a te d in stitu tio n s...p ro b le m s w ith d ata a c c u ra c y and reliability'
(M aw dsley, in press) h a v e all been veh em en tly criticised . Former World
B a n k e co n o m ist W illia m Easterly (2006) p o in ts o u t h ow in Ju n e 2005
th e M CA had reached ag reem en ts w ith tw o c o u n trie s : Honduras and
M ad agascar. Yet, in 2 0 0 4 , H onduras' g o v e rn m e n t was ranked by the
W o rld Bank as am o n g th e worst third in th e w orld for corruption,
w h ile M adagascar was in th e middle. M CA's c la im s to neutral selectiv­
ity are also suspect o n a cc o u n t o f th e in c lu s io n o f cou n tries like
C o lo m b ia , Egypt, Jo r d a n , Turkey and Russia in th e pool o f countries
th a t are eligible to co m p e te for MCA funding, as th is im plies th at deci­
sio n s to award MCA fu n d s w ill be determ ined b y p o litical and strategic
ra th e r th a n th e stated c rite ria . All th is illu stra te s th e difficulties for
e x te r n a l ag encies to re a c h consensus on w h ic h co u n tries are better
g o v e rn ed . In short, M C A 's exp erience suggests th a t th e m ove to selec­
tiv ity show s th a t d o n o rs co n tin u e to im p o se th e ir ideas o f w hat it
m e a n s to be well g o v ern ed o n recipient c o u n trie s, and w ith limited
d egrees o f success (see C h h o tra y and Hulme, 2 0 0 7 for details).
D esp ite all th e p ro b lem s encountered d u rin g im p le m en ta tio n , MCA
re m a in s in op eratio n an d its proponents are o p tim is tic th at m any of

’For details of the President's speech, see http://www.whitehouse.gov/news/

releases/2002/03/20020314-7.html
 Governance in Development Studies 111

the 'kinks a sso ciate d w ith slow start-u p ' w ill be ironed o u t (H errlin g
and Rose, 2 0 0 7 :1 ). Its reliance on u n iv ersalistic governance criteria has
in fact facilitated th e adoption of co n c re te , actio n ab le strategies. T h ese
may well en g en d er m o re problem s th a n th e y solve, and yet th e y c o n ­
tinue as they are co m p a tib le w ith th e g e n e ra l fram ew ork o f a id -giv in g
and affirm d o m in a n t neoliberal e c o n o m ic values. In stark c o n tra s t,
DFID's Drivers o f C h an g e w hich attem p ts to form ulate a m ore n u a n ced
view of g o v ern an ce h a s faltered to tr a n sla te itself in to p ractical stra t­
egies (C hhotray a n d Hulm e, 2 0 0 7 ). T h e re is also n o co n crete ev id en ce
on the precise w ays in w h ich DOC stu d ie s have im pacted d ecisio n s
regarding DFID's a id decisions. N evertheless, DFID appears to b e tak in g
its DOC in itia tiv es seriously and has co m m issio n e d fu rth er w ork to
refine its an aly tical to o ls (see Leftwich, 2 0 0 6 ) .
The debate o n th e role o f governance in giving aid reiterates th e te n ­
sion between d iffere n ce and similarity th a t w e introduced at th e b eg in ­
ning of this chapter. There remains a very strong belief, especially am ongst
donors and in tern atio n al development organisations that it is 'possible in
principle to search for universally valid criteria o f proper m an ag em en t
and policy m aking' (Doornboos, 2000:72). G eoffrey Hawthorn's insightful
observation - th a t th e n o tio n o f good g o v ern an ce is form ulated in term s
of'optimal paths to optim al outcom es', a supposition w hich h e rejects as
simply untrue in po litics (1993:24) - is still n o t th e favoured view.

Governance a n d d é m o c ra tisa tio n

The concept o f g o o d governance has h isto rica lly shared a strong asso ci­
ation n ot just w ith w estern models o f g o v e rn m e n t and ad m in istration ,
but more fu n d a m e n ta lly w ith w estern lib e ra l d em ocratic p o litics. T h e
pro-democracy m o v e m e n ts witnessed in p arts o f Latin Am erica, Africa
and East Europe in th e late 1980s and early 1 9 9 0 s led to an asso ciatio n
between m u lti-p arty dem ocracy, w estern -sty le, and good g o v ern a n ce.
The subsequent u se o f good governance based o n political co n d itio n a l­
ity to forge sim ilar or id entical d em o cratic p o litics in cou n tries aroun d
the world has b e e n criticised as h ig h ly su sp icio u s. The p ro m o tio n o f
democracy abroad is n o t a new policy fo r th e U nited States, an d w h ile
the Bretton W o o d s in stitu tio n s m ay h a v e sh ied away from d iscu ssin g
démocratisation as a specific g o v ern an ce c o n c e rn in th e early 1 9 9 0 s,
the Bank, re fle ctin g th e co n cern s o f a n u m b e r o f w estern d on ors, was
much more w illin g to do so by the end o f th e decade (follow ing W DR,
1997). More re c e n tly , th e UN and o th e r b ila te ra l donors (CID A an d
SIDA for in sta n ce ) relate good g o v e rn a n ce ex p licitly w ith a b ro ad er
concern for d ém o cratisatio n .
112 Governance Theory and Practice

However, m o re th a n o ne critical o b serv er has put forw ard th e pro­

position th a t th e new political co n d itio n a litie s (of th e 1 9 9 0 s ) had
n o th in g to d o w ith th e desire for d em o cra cy , and th at a p o s itiv e cor­
relation b etw ee n th e tw o has yet to b e d em onstrated (B a ry a , 1993;
C ranenbu rgh, 1 9 9 8 ; D oornboos, 2 0 0 0 ; Healey and R o b in so n , 1992;
Lancaster, 1 9 9 3 ). T o begin w ith, in th e past Cold W ar era, western
cou ntries fre q u e n tly supported d ic ta to ria l regim es, as in Z aire, Liberia
and Uganda, u n d er th e label of 'bu lw arks against co m m u n ism ' (Barya,
1993:16). Barya forcefu lly argues th a t th e new political cond itionalities
use a 'p op u list id e o lo g y o f d em o cracy ' to create a new e c o n o m ic and
m ilitary w orld o rd er follow ing th e c o lla p se o f state so cia lism an d the
end o f th e C old W ar (1 9 9 3 :1 6 ).
Moreover, w estern donors largely in terp ret d ém ocratisation as multi­
party p o litics, a n d th e re is wide sc e p ticism w hether th is is e ith e r ade­
quate or ev en ap p rop riate to th e n ee d s o f th e host c o u n trie s . The
m ajority o f d eb ates in this co n tex t h a v e b een played ou t in A frica. The
skilful m a n n er in w h ich au th o ritarian regim es in Kenya a n d Ethiopia
transform ed th e m selv es in to d o m in a n t parties w ith in fa ça d e type
m ulti-party sy stem s showed th at m u lti-p arty ism w ithout co n co m ita n t
social and id e o lo g ica l pluralism w o u ld ensu re o n ly a fa rc ic a l demo­
cracy (D o o rn b o o s, 2 0 0 1 ). C ran en b u rg h co m m en ts, 'It is h ig h ly ques­
tionable w h eth er cu rrent reforms c e n trin g around m u lti-party elections
will lead to sig n ifican t changes in th e m a n n er in w hich p o licies are for­
m ulated' ( 1 9 9 8 :7 8 ) . His co n cern is th a t p o litical parties, m u ltip le as
th ey m ay b e, m a y still lack th e ca p a city to present a c o h e r e n t policy
programme, fa ilin g b o th to provide cred ible political o p p o sitio n as well
as allow ing a d angerously large a m o u n t o f au tonom y to th e dom inant
party. For C ra n en b u rg h , th e ap p ro p riate response for th e d o n o r com­
m u n ity w ould b e to form ulate a 'stra te g y to increase th e c a p a city of
d em ocratising e lite s ' (1 9 9 8 :7 8 ). He ev e n considers th a t su ch activities
are better p u rsued by bilateral d o n o rs th a n by a 'fin a n cia l in stitu tio n '
as the W orld Bank.
O thers are less san guine in th e ir an aly sis. There is a fun d am en tal
qu estion ing o f w h eth er d ém o cratisatio n , as understood b y th e inter­
n ation al d o n o r co m m u n ity , is th e ap p rop riate path ah ead fo r Africa,
and the d ev elo p in g world m ore g en erally . C ountries like U g an d a have
'struggled to g et reco g n itio n for an altern ativ e to m u lti-partyism ,
arguing th a t m u lti-p arty ism as it h ad evolved in th e w e ste rn exper­
ien ce did n o t n ecessarily co n stitu te th e sole route to d e m o c ra tic polit­
ical processes, o r to "good g o v e rn a n ce " fo r th a t m atter' (M u g a ju and
O loka-O nyango, 2 0 0 0 ; cited in D oo rn b o o s, 2 0 0 1 :1 0 1 ). H aw th orn com­
 Governance in Development Studies 113

m ents, 'It is p erfectly p o ssib le th a t n eith e r th e g o v e rn m e n t o f a state

nor th e m a jo rity o f th a t s ta te 's citizen s b eliev es th a t th e b en efits o f
social co o p e ratio n are in fa c t b est served by a c o m p e titiv e m u lti-party
system. And it is p erfectly p o ssib le th at th e y co u ld b e rig h t in th a t
belief' (1 9 9 3 :2 6 ).
E xp eriences in parts o f A frica (C o n go ) and East Asia (So u th Korea)
have illustrated how co m p e titiv e electoral p o litics h as posed a tangible
risk to security and p ro sp e rity ; b o th in K in sh ash a (w ith th e civ il
war b etw een 1 9 6 0 -6 5 ) an d Seou l (w ith th e fa c tio n a l d isp u tes w ith in
the lead in g party and th e su b se q u e n t coup in I 9 6 0 ) , secu rity and th e
authority o f th e state to p ro v id e it w ere at a p rem iu m . W h ile it m ay be
true th a t 'e x tern al th re a ts' to n a tio n -sta te s are n o lo n g e r as serious
in th e 1 9 9 0 s, and th e re fo re 'g o v ern m e n ts p re d icated o n "n a tio n a l
security" w ere no lon ger d e fe n s ib le ', in tern al d iso rd er or th e th reat o f
such disorder is still w idespread (H aw thorn, 1 9 9 3 :2 7 ). T h e relationship
betw een order and th e su cce ss o f d em o cracy is n o w w ell th eorised .
Przeworski conclu des, ‘D e m o cra c y is about ru les, n o t o u tco m e s, and
co m p etin g parties will o n ly a cc e p t defeat if th e y ca n b e sure th a t th e
rules w ill stay in place and give th e m a ch an ce for v icto ry in th e future'
(1 9 9 1 :1 0 4 0 ). T his o b serv a tio n su p p lem en ts S c h u m p e te r's earlier pro­
p osition th a t 'su ch rules w ill o n ly be accep ted if th e re is w idespread
agreem ent o n th e general sh a p e and d irection o f so cie ty ' (Schum peter,
1950; cited in Hawthorn, 1 9 9 3 :2 7 ).
In th is co n te x t, d isso n a n ces b etw een d onors, A frican g ov ern m en ts
and th e A frican people reg ard in g th e m eanin g o f d e m o cra cy and how
it m u st b e achieved em erg e as a h ig h ly p e rtin e n t, y et in ad eq u ately
explored, co n cern . D onors p ro je c t th e ir in terest in d ém o cra tisa tio n as
necessary 'to ensure th a t rep ressed popular en e rg ies an d m isappro­
priated aid m onies are b o th released for d evelop m en t' (Barya, 1 9 9 3 :1 8 ),
but th is is n o t necessarily th e p ercep tio n o f A frican g o v ern m en ts or
African p eop le for th a t m a tte r. A frican g ov ern m en ts an d o th e r official
African in stitu tio n s like th e U n ited N ations E co n o m ic C om m ission for
Africa (UNECA) can b e d iv id ed in to tw o broad grou p s in th is regard:
those w h o favour d em o cracy b u t argue th a t it m u st n o t b e im posed
and its definition must be left to th e African people (som e African leaders
like P resid ent M useveni o f U gan d a, th e O rgan isation fo r A frican U nity
and UNECA fall in to th is g ro u p ) and th o se w ho are o p p o sed ou trig h t
to d em o cracy although th e y pay lip service to th e co n c e p t (such as th e
ruling regim es in Zam bia, K en ya and M ali w h o h a v e b een forced
to a ccep t th e m u lti-p arty d e fin itio n o f d em o cracy b y a co m b in a tio n
of th e p o litica l co n d itio n a litie s for aid as well as in te rn a l resistan ce).
114 Governance Theory and Practice

Attempts to cap tu re th e 'popular' view o f dém ocratisation m a in ly convey

the need to go bey o n d a narrow in terp reta tio n o f dem ocracy as political
pluralism, an d focu s on ‘its social an d ideological d im en sio n s' m aking it
as co m p reh en siv e as possible for th e w h o le o f civil so ciety (M am dani,
1992; cited in Barya, 1993:20). M am d ani com m ents further th a t although
opposition m o v em e n ts and 'new breed ' m iddle class leaders are forced to
acknow ledge th e need for pluralism an d autonom ous o rg a n isa tio n s of
civil society, it rem ains u ncertain w h e th e r they to o w ould to lera te the
'm ilitancy and au tonom y' of these organisations if voted in to pow er. The
social and id eological foundations o f dem ocracy rem ain a low priority for
donors as m u ch as African leaders, old and new.
Support fo r th e idea that d ém o cratisatio n need n ot fo llo w a western
liberal d em o cratic model has co m e m o re recently throu gh an influential
study condu cted in 16 countries. G o ran Hyden, Julius C ourt and Kenneth
Mease (2 0 0 4 ) h av e drawn on a new set o f data on govern an ce to provide
a co m p lem en tary perspective on d ém o cratisatio n and th e relation sh ip
between p o litics and developm ent. T h e authors adopt a rule-based rather
than a resu lt-oriented definition o f govern an ce. They d efin e governance
to 'refer to th e form ation and stew ard ship o f th e form al an d inform al
rules th at reg u late th e public realm , th e arena in w hich sta te as well as
econom ic an d societal actors in te ra ct to m ake decisions' (H yden et al.,
2 0 0 4 :1 6). T h e y further clarify th a t g o v ern an ce deals w ith th e 'co n stitu ­
tive' side o f h o w a political system operates rather th an its distribu tive or
allocative asp ects th a t are 'm ore d ire ctly a fu nction o f p o lity ' (H yden et
al., 2 0 0 4 :1 6 ). T h e y identify six 'in stitu tio n a l arenas' to u n d erstan d and
investigate th e fu nctional d im en sio n s o f governance: civil society, polit­
ical society, g overnm ent, bureaucracy, eco n o m ic society an d th e judicial
system (for fu rth er details refer to H yden et a i , (2 0 0 4 :2 2 -2 8 ).
T he resu lts o f th e ir em pirical re se a rc h lead th e a u th o rs to co n clu d e
th at 'd e v e lo p m e n t stagnation a n d o b sta cle s to d é m o c ra tis a tio n stem
from a failu re to undertake th e n ecessary steps to e sta b lish in g a system
of rules th a t leg itim ate p o litica l c h o ic e s and p o litica l b eh av io u r'
(Hyden et a l., 2 0 0 4 :1 9 3 ). T h ey th u s arriv e at a rath er d iffe re n t causal
relatio n sh ip to th a t prescribed w ith in co n v e n tio n a l d o n o r th in k in g :
that th e e le m e n ts o f 'good g o v e rn a n c e ' (cen trin g o n th e fo rm a l and
inform al rules th a t regulate th e p u b lic realm ) provide o p p o rtu n itie s for
d ém ocratisation and developm ent, an d n o t th e other way around , where
a w estern lib e ra l form o f d em o cra cy is ad vocated as th e p a th to 'good
governance', w h ic h in turn is vaguely defined. They clarify th a t 'in this
respect, g e ttin g politics right m ean s a set o f norm ative an d in stitu tio n al
changes th a t transcend th e liberal d em ocratic m od el' (H yden et al.,
 M-ACSO - Biblioteca

Governance in Development Studies 115

2004:194)- Their study in clu d es exam ples o f co u n tries like C hina, T h a i­

land and Jordan, where d ev elo p m en t has been driven b y an emphasis on
rules that are n o t identical to th o se associated w ith liberal democracy.

Governance an d th e s ta te
The rise o f good g o v e rn a n ce in in tern atio n al d ev e lo p m e n t is usually
associated w ith m arking a cle a r break w ith th e d o m in a n t n eoliberal
paradigm o f th e 1980s. T h e em p h asis on in stitu tio n s o f all kind, and
not just m arket in stitu tio n s, th a t it brought in its w ake was seen as rep­
resentative o f th e 'p o s t-W a s h in g to n ' con sen su s (see Stiglitz, 1 9 9 8 ).
WDR 1 9 9 7 T he State in a C h a n g in g W orld supposedly co n tain ed a m ore
'balanced approach b e tw e e n th e state-m anaged an d m arket-m anaged
models' (M artinussen, 1 9 9 8 a ). But to w hat e x te n t d id th e good gover­
nance agenda reverse th e n e o lib e ra l state m in im a lism th a t had led to
its rise in th e first place? T h is is a deeply sig n ifica n t qu estio n as th e
developm ent o rth o d o x y re lie s heavily on good g o v e rn a n ce to claim
that it has moved beyond sta te m inim alism .
Moore (1999) makes a p o w erfu l case th at th e n eo lib eral message is
quite clearly evident in th e W B 's 1997 report. The tw o ‘jo b s' listed by th e
WDR for all states are firstly, to get th e 'fu n d am en tals' right - these
include th e law, m a cro e co n o m ic stability, in v estm en t in basic services
and protection o f the e n v iro n m e n t, and secondly, to take advantage o f
the opportunities represented by th e private and v o lu n tary sectors and
not attem p t to be the 'sole p rovid er'. M oore argues th a t th e focus o f this
message is plain, and the W B desires states to intervene to establish prop­
erty rights, to m aintain law an d order and to preserve m acroeconom ic
stability bu t n o t to be th e p rin cip al provider o f h e a lth , education and
social welfare. The overall refrain in the report, that states should not take
on tasks th at do not m atch th e ir 'capabilities', reflects th e basic neoliberal
distrust o f th e state. T hese accu satio n s are resou nding and num erous:
good governance is h en ce view ed as th e 'political cou n terpart of eco n ­
omic neoliberalism ' (A rcher, 1 9 9 4 ; cited in O rlan d ini, 2 0 0 3 :1 8 ), th e
extension o f structural ad ju stm en t to th e political system s o f developing
countries (Guilhot, 2000; cited in Orlandini, 2003:18), th e promotion of a
neoliberalism on a n a tio n a l and global scale (M oore, 1999) and th e
'World Bank/IMF co n so rtiu m 's last refuge' (G eorge and Sabelli, 1996;
cited in Moore, 1996:138).
The co n cern th a t has fo llo w e d these accu satio n s is th a t despite th e
theoretical departure to n e w in stitu tio n alism and th e p o licy focus on
increasing institu tion al c a p a city , actual g overnan ce p o licies m ay para­
doxically be doing 'm o re to reduce, rather th a n stren g th en Third
116 Governance Theory and Practice

W orld g o v ern m en ts' cap acity fo r p o licy m aking a n d im plem entation’

(D o o rn b o o s, 2 0 0 0 :7 2 ). Su ch p o licie s include for e x a m p le , externally
in d u ced cre a tio n o f a u to n o m o u s in stitu tio n s fo r im p ro v ed manage,
m e n t th a t m ay u nd erm in e lo c a l g ov ern m en t c a p a c ity or diversion of
aid flow s to NGOs th at m a y w eaken th e g o v e rn m e n t departments
ch arged w ith responsibility to th e areas co n cern ed . T h is is n o t uncom­
m on given key governance strategies o f decentralisation and th e increased
in v o lv e m e n t o f civil so ciety ..M o reo v e r, dem ands fo r co m p lia n ce with
c o n tra d ic to ry in stru ctio n s fro m d ifferen t d onors h a v e b een known to
result in confusion and d istortion, in addition to overbu rd ening qualified
m anpow er w hich is frequently in short supply (D oorn boos, 2 0 0 0 ; Wuyts,
1 9 9 6 ). T h ese processes have b e e n referred to as 'sq u eez in g ' or 'splitting'
th e state (M ackintosh, 19 9 2 ) an d seriously u n d erm in e key governance
objectives. M oreover, the co n tin u ed pervasiveness o f neoliberalism offers
'lim ite d clues by way o f p o licy o n how to respond to th e problems of
d e-in stitu tio n alisatio n ' th a t ty p ically plague g o v ern a n ce in developing
cou n tries (Bangura, 1994; cited in Doornboos, 2 0 0 0 :7 2 ).
In th e sam e vein, the Bank h as b een criticised for su bscribing to a nar­
rowly eco n o m ic perspective w h ich prevents it from con sid erin g seriously
th e d evelo p m en tal state m o d el th a t inspired th e fo cu s o n governance
(M artinussen, 1998a). The successes o f state in terv en tio n in development
in several East Asian co u n tries w ere also associated w ith o th er dynamics
such as th e close nexus betw een th e bureaucracy an d m ajo r business
groups. Su ch aspects were n ev er seriously regarded, ev en though they
revealed critical aspects o f th e w ider institutional se ttin g s in w hich gov­
ern m en t bureaucracies in th e se cou n tries operate. W D R 1 9 9 7 contains a
few referen ces to culture, h isto ry , inform al rules an d n o rm s (1997:157),
b u t asp ects o f 'social em bed d ed ness', as those referred to above, must be
taken m u ch m ore into con sid eration in order to u nd erstan d why govern­
m ents beh av e so differently from o n e another (M artinussen, 1998a).
Fin ally, it is alleged th a t p ro p o n e n ts o f the g ood g o v ern an ce idea do
n o t ad eq u ately explore th e m e a n in g and im p licatio n s o f th e 'develop­
m en tal state', despite the sig n ifican ce o f East Asian developm ental states
to th e w h o le em phasis o n g o v ern an ce. Leftw ich (1 9 9 4 ) in particular,
n o te s th a t cu rrent m odels o f g ood governance an d th e developmental
state are in conflict. This is b ecau se WB-led ideas o f g ood governance are
p ro jected in depoliticised term s, w ith little reco g n itio n th a t governance
is in fact very m uch a fu n ctio n o f state form, cap acity and political prac­
tice (Leftw ich, 1994). He reiterates th at the 'rem arkable' achievem ents of
th e East Asian states th a t h a v e inspired th e re cen t em p h asis on gover­
n a n ce h av e 'n o t been th e k in d o f depoliticised g o v e rn a n ce now being
 Governance in Development Studies 117

urged on in d evelo p in g so cieties'. D raw ing fro m th e work o f o th e r

authors like C halm ers Jo h n s o n (1982) and Robert W ade (1990), Leftw ich
( 1 9 9 4 ) makes th e case th a t growth in East A sian societies has b ee n
masterminded by 'd e v elo p m en tal states', th a t possessed the req u isite
autonomy to shape an d pursue n atio n ally -d eterm in ed d ev elo p m en t
objectives. He also argues th a t developm ental states could be both d em o ­
cratic and n o n -d em o cratic, a p oint w hich co n tra d icts th e o ste n sib le
consensus regarding th e significance of d ém ocratisation for developm ent
by the proponents o f good governance. O bsession w ith the liberal d em o ­
cratic state thus leads to a p aten t disregard for th e varying social an d
cultural contexts th a t d ifferently structure state-so ciety relationships.

Governance and power

The critical elem e n t w ith in d evelop m ent stu d ies is u nd erp inn ed b y a
view o f governance as a w estern co n stru ct th a t attem p ts to m ask th e
power relationships b etw ee n th e developed a n d d eveloping world. T h e
WB-led donor agenda o f 'g o o d governance' is regarded as a fu n d a m en ­
tally 'tran sform ativ e' p ro je c t th a t is p resen ted as a d ep oliticised a n d
neutral endeavour. T h e fo llo w in g ex tract fro m a 1 9 9 4 W orld B a n k
document reveals its gran d p lans for g o v ern an ce: 'G o o d gov ern an ce is
epitomised by p re d icta b le, o p en and e n lig h te n e d p o licy m aking (th a t
is a transparent process); a bureaucracy im bued w ith a professional eth o s;
an executive arm o f g ov ern m en t accountable for its actions; a strong civil
society participating in p u blic affairs; and all beh av in g under rule o f law '
(1994:vii). According to W illiam s and Y oung, su ch transform ation is
attempted at three levels: 'at th e institutional level w ith th e creation o f a
“neutral" state; at th e social level with th e crea tio n o f a "liberal p u b lic
sphere" or "civil so cie ty "; and at the personal level w ith th e creation o f
a liberal "self" and "m o d ern patterns o f b e h a v io u r'" (1 9 9 4 :9 9 ). Thus, a t
each o f these th ree levels, th e authors co n te n d th a t th e W orld B an k
constructs governance, in part at least, from liberal theory, and in th e
process, it reproduces som e im portant am biguities and tensions th at exist
within it. It is perhaps instru ctive to consider th ese attem pts in turn.
The first level, i.e., c re a tio n o f a "n eu tral" sta te stem s from the recu r­
rent th em e of separating tech n ical from political issues w ithin the Bank's
formal discourse. W e h av e already discussed h o w th e Bank's interest in
governance signals a fo rm a l departure from its stated apolitical sta n d ,
and yet, th e Bank h as c o n tin u e d to retain its p o stu re w hile en g ag in g
with b latan tly p o litica l m atters. At a co n cep tu al level, th e very idea o f
a neutral basis o f th e B an k 's engagem ent w ith recip ien t countries stand s
118 Governance Theory and Practice

to ch allen ge, an d indeed u nsu stain able w ith in liberal th e o ry itself. The
m ain p o in t o f criticism is 'even if n e u tra lity is taken as a g u id in g prjn.
ciple ra th er th a n a fo u n d atio n al o n e , it g enerates n e u tra lis t conclu­
sion s o n ly w ith respect to th o se w h o alread y accep t lib era l principles’
(W illiam s an d Young, 1 9 9 4 :9 4 ). It follow s therefore, th a t th e principles
o f 'good' g o v e rn a n ce prom oted b y th e Bank stem from a p rio r concep­
tio n o f th e g o o d ; th e good for w h ic h th e W orld B ank sta n d s for is a
market e c o n o m y and "neu tral" state w h ich ensures th e proper function­
ing o f th a t e c o n o m y by m eans o f th e e n fo rce m e n t o f p ro p erty rights
and co n tra ctu a l obligations.
The seco n d level, i.e., creatio n o f a 'liberal public sp h ere' or 'civil
society' is a m o n g the m ost in novative o f th e Bank's recent positions with
respect to g o v ern an ce and d evelo p m en t. Indeed, th ere is a widespread
consensus aro u n d th e need for en lig h ten ed participation by civil society
in public decision-m aking. Traditionally, such a civil society was seen as a
sphere o f in tera ctio n s free o f state in terferen ce and characterised by plu­
ralism and to leran ce and m u ch o f th e governance literatu re heeds the
historically fam iliar liberal im p erative o f tolerance. T h e B an k does not
w ant to b e seen as prescribing a n y particular political system , and its
official d o cu m e n ts resonate w ith directives to its recip ien t countries to
'devise in stitu tio n s w hich are c o n so n a n t w ith .its social values' (World
Bank, 1 9 9 2 ). However, on closer in sp ectio n , it emerges th a t th a t n ot all
forms o f th e indigenous are accep tab le to th e Bank and its allies, and
indeed o n ly th o se th at are co m p a tib le w ith m o d ern isatio n are to be
encouraged (Landell-M ills, 1992). A lthough th e Bank an d o th e r donors
now rely o n a rosy discourse o f 'p artn ersh ip ' and 'o w n ersh ip ' by the
recipient co u n try , th e actual ex p erien ces o f their dealings reveal ample
co n trad ictio n s. M ercer (2003) reports on how donors an d international
NGOs in T an z a n ia 'cherry-picked' a handfu l o f elite N G O s to conduct
their pro fessio n al interactions, w h ile excluding th e large m ajority of
NGOs. M oreover, the Bank's vision o f th e civil society is a n explicitly
western o n e , and there is n o space for 'fam ily and e th n ic tie s' or other
'affective an d com m u n ity groups'. C ivil society, as referred to within
good g o v e rn an ce agendas, inclu d es 'co n tractu al, n o n -co m m u n ity , non-
affective groups, such as professional associations, cham bers o f commerce
and ind ustry, trade unions and N G O s' (W illiam s and Y ou n g, 1994:96).
Social tran sfo rm atio n along th ese lines is explicitly suggested by the
Bank's favou red academ ic experts as G oran Hyden (1 9 8 3 ). W illiam s and
Young (1 9 9 4 ) argue that the B an k's selective toleran ce ca n b e better
understood b y an exam ination o f th e underlying liberal assumptions.
The liberal id ea o f a pluralistic civ il society stems from th e fundamental
 Governance in Development Studies 119

liberal premise o f th e u tte r san ctity o f individual freedom . However,

seminal liberal thinkers lik e J.S . Mill base their position on a highly prob­
lem atic distinction betw een th o se who are and are n o t autonom ous (such
as those residing in 'u n civ ilised ' nations), san ctio n in g breaches o f liberty
of th e latter (W illiam s an d Young, 1994). Liberal ideas o f individual
freedom are accom panied b y highly loaded n o tio n s o f m oral progress
that mask their apparent universality.
Attem pts at tran sfo rm atio n at th e third level relate to th e individual
itself and th e liberal c o n c e p tio n o f th e 'free se lf' lies at th e heart o f
good governance. T h is is particu larly ev id en t in th e em phasis o n
dém ocratisation. W ith in lib eral theory, th e 'ch a ra cteristics o f th e in d i­
vidual agent, and esp e c ia lly in relation to e c o n o m ic life, have b ee n
assumed to be universal u n d ern eath the superficial variety o f culturally
co n d itio n ed beh avio u r' (W illia m s and Young, 1 9 9 4 :9 7 ; Douglass an d
Bara, 1 9 9 0 ). Such c o n c e p tio n s o f universal e c o n o m ic b eh av iou r h ave
been extend ed to th e p o litic a l and social realm s as illu strated by th e
NPE approach to p o litics th a t co n tin u es to be in flu e n tia l w ith in th e
Bank and o th er d on ors. W e ste rn legal and b u rea u cra tic o rg an isatio n s
and th e m arket eco n om y, th a t form th e cardinal elem en ts o f th e Bank-
led discourse o f good g o v e rn a n ce , are 'p rem ised u p o n th e individual
who has no o th er "p u b lic " ties th a n th e co n tra ctu a l o n es he ch o o ses
for him self’ (W illiam s an d Y ou ng, 1994:98).
W h ile th e good g o v e rn an ce agenda allows th e Bank and other in ter­
national institutions to pursue such fu n d am en tally transform ative
projects, little or no em p h asis is placed on reorien tin g th e external c o n ­
straints to good governan ce as experienced by developing countries. T h e
gradual progression of th e p o litical conditionality approach from 'co n d i­
tionality' to 'selectivity' h as shifted th e burden o f responsibility for
achieving good g overn an ce from donors to h o st co u n tries, but w ithout
any com m ensurate sh ift in pow er over co n cep tu alisin g its m eaning. To
conclude, it is precisely th e understanding o f pow er relationships in
governance th at defines th e divide betw een m ainstream developm ent
agencies and critical in terp reters o f d evelopm ent. As w e have tried to
sum marise here, there is a sharp divide in th e literatu re betw een th o se
who advocate good g o v e rn a n ce and those w ho q u estio n it. To its pro­
ponents, good governance is a benign and universally applicable n otion ,
w orthy o f pursuit, bu t to its opponents, it is yet an o th e r instrum ent o f
power th at the developed m in o rity con tin u es to w ield over the vast
developing regions of th e w orld.