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What is Governance?


Arriving at a Common Understanding of “Governance:” 

To enable and facilitate the discussion, a key question to be posed at the outset is: What is governance?  Conceptually, governance (as opposed to “good” governance) can be defined as the rule of the rulers, typically within a given set of rules.  One might conclude that governance is the process – by which authority is conferred on rulers, by which they make the rules, and by which those rules are enforced and modified.  Thus, understanding governance requires an identification of both the rulers and the rules, as well as the various processes by which they are selected, defined, and linked together and with the society generally.

Nonetheless, within this concept of governance, the obvious second question is: What is good governance?  Again, the debate on the quality of governance has been clouded by a slew of slightly differing definitions and understanding of what is actually meant by the term. Typically, it is defined in terms of the mechanisms thought to be needed to promote it.  For example, in various places, good governance has been associated with democracy and good civil rights, with transparency, with the rule of law, and with efficient public services. 

Governance and Good Governance: Varying Definitions


“The traditions and institutions by which authority in a country is exercised” – Kaufman et al 

The way “ … power is exercised through a country’s economic, political, and social institutions.” – the World Bank’s PRSP Handbook.

“The exercise of economic, political, and administrative authority to manage a country’s affairs at all levels.  It comprises mechanisms, processes, and institutions through which citizens and groups articulate their interests, exercise their legal rights, meet their obligations, and mediate their differences.”   UNDP.

Dimensions of governance

“Fundamental aspects of governance” are: graft, rule of law, and government effectiveness.   Other dimensions are: voice and accountability, political instability and violence, and regulatory burden.    Kaufmann, Kraay and Zoido-Lobaton 1999. 

Property rights and rule-based governance; the quality of budgetary & financial management; the efficiency of revenue mobilization; the efficiency of public expenditures; and transparency, accountability and corruption. – World Bank CPIA indicators. 

Good governance

It is “… among other things participatory, transparent and accountable. It is also effective and equitable. And it promotes the rule of law.”   –  UNDP

It “… 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 relationship between the ruler and the ruled.”
.”   – OECD (

It is “… epitomized by predictable, open and enlightened policy making; a bureaucracy imbued with a professional ethos; an executive arm of government accountable for its actions; and a strong civil society participating in public affairs; and all behaving under the rule of law.” –  World Bank 1994:
Governance: The World Bank’s Experience.

Mechanisms for assuring good governance have three key elements: Internal rules and restraints (for example, internal accounting and auditing systems, independence of the judiciary and the central bank, civil service and budgeting rules); “Voice” and partnership (for example, public-private deliberation councils, and service delivery surveys to solicit client feedback); and Competition (for example, competitive social service delivery, private participation in infrastructure, alternative dispute resolution mechanisms, and outright privatization of certain market-driven activities). – WDR 1997.


In other cases, the definition of good governance goes further than mechanisms and proposes that good governance be equated with specific outcomes – in a Rawlsian sense of assuring that everyone, irrespective of social or economic status, has a voice in governing and receives just, fair, equitable treatment.  For example, the UNDP notes that: “Good governance is, among other things, participatory, transparent and accountable. It is also effective and equitable. And it promotes the rule of law. Good governance ensures that political, social and economic priorities are based on broad consensus in society and that the voices of the poorest and the most vulnerable are heard in decision-making over the allocation of development resources.”[1]

In general, this initiative will take as a starting point the five dimensions of good governance that was developed in the World Bank’s Corruption study for Europe and Central Asia and contained in the Bank’s most recent update of its public sector strategy: public sector management, competitive private sector, structure of government, civil society participation and voice, and political accountability.[2]   This definition goes well beyond effective delivery of public services (even if that is a benchmark indicator of the quality of governance, a lightning rod for public sentiments about government, and a useful starting point for assessing the quality of governance).  And it can also go well beyond the notion of “economic governance” which is typically the focus of most World Bank work on governance. 

Of these dimensions, the most problematic for this work are those of civil society voice and participation and political accountability.  However, the consensus of the team is that neither better public sector management nor a competitive private sector can be reliably and sustainably achieved without voice and accountability, especially in MNA countries which typically score low on measures of these indices.


[2]“Reforming Public Institutions and Strengthening Governance: A World Bank Strategy – Implementation Update,” March 28 2002.