What is Governance?
Governance can be a complex, broad topic but its basic underlying definition is deceptively simple.
Given my designation, I am often asked what is governance? I usually start with some innocuous reference to how it means different things to different people and that there are probably as many definitions out there as there are governance specialists in this world. A perplexed look and an awkward silence follow suggesting, tell me more?
I delve deeper, let’s take ADB’s definition, and paraphrase: “Governance is about how governments - in close collaboration with the private sector and civil society – exercise their authority to manage economic and social resources in support of improved development outcomes”.
Interjecting, they shoot back, “so it’s all about how governments make use of power?” Diplomatically, I concede “that’s correct” but adding further complexity, “it really all boils down to for what purpose?” and here my response is unequivocal: “it’s really about improving service delivery. Citizens have expectations of their governments and if governments don’t deliver, they are likely to be voted out.”
Sensing a genuine interest, I begin to elaborate. You can take governance further and reduce it to more tangible notions such as structure, systems, and policies and procedures.
Take structure, governments organize themselves differently – some tend to be more unitary governments while others are part of a decentralized federal state. This will have repercussions in terms of expenditure and revenue assignments – who is responsible for spending on what and who collects taxes and other revenues to pay for the spending. After all, smart spending drives the quality of services offered.
On systems, I appeal to the most essential of services. Think of how education or health coverage is rolled-out. Traditionally, basic education was part of the public service across most countries. In contrast, higher education – through a system of colleges and universities – reflected a mixed model with a higher participation of private institutions in the United States or through still largely public institutions across most of continental Europe. Similarly, the health system can be largely provided for by the state – think of the much-cherished National Health Service in the United Kingdom - or by the private sector in the United States as an example. While there is no clear preference to an ideal model and recognizing that today most countries operate under a combined public and private system, they each have important implications for efficiency, equality and social welfare.
On policies and procedures, I often zoom in on public tendering and refer to the importance of the way public works or public procurement is bid out. In many countries a great deal of public spending is outsourced. Think of the importance of laws and rules on such things as open, transparent and competitive bidding and the repercussions on the value for money proposition.
Think also of the ubiquitous role of political capture. Construction companies often play “the money game” and are awarded large and over-budgeted contracts in exchange for siphoning funds to corrupt government officials as pay back for winning the contract. Corruption is indeed a nefarious tax on all citizens. However as important as the laws and regulations in place are on the efficiency of spending and overall quality of service delivery, it is more often the ability to effectively enforce these laws and regulations that proves to be the weakest link.
Finally, there is a clear sense of understanding and a last question, “so how does one tackle this?” We look at it as part of an integrated and combined approach at ADB operating through public financial management, public procurement and anti-corruption reforms. These reforms come together under a governance risk assessment framework – with a focus on institutional and political economy considerations - undertaken as part of the country partnership strategy. The country risks are identified and analyzed under risk assessment management plans and these cascade into risk assessments at the sector and project levels and ultimately addressed in the context of projects through lending and technical assistance.
In the end, what is good for governance is good for citizens through improved transparency, efficiency and accountability of service delivery, including better access, better quality and better affordability all in one clean swoop.