Governance, Development and Aid: It’s Complicated

Courtesy:World Bank Institute

Until mid-1990s- governance, anti-corruption, and transparency in aid were largely ignored . Today, the relationship between governance, development and aid has risen up the international policy agenda. However, the broad definition and varied understanding of “good governance” has made it one of the most soporific words in development. The normative idea of what constitutes good governance differs across societies and that may be the reason for the difficulty in conceptualizing and operationalizing governance.  The Overseas Development Institute (ODI) used the following framework to analyze governance and development:

From the ODI Briefing Paper
From the ODI Briefing Paper

In the paper, ODI put forward ideas on: a set of core governance issues; an approach towards more rigorous governance assessments; and considerations for aid allocation and country programming. (Click here)

The World Bank first used the concept of good governance in its 1989 report, Sub-Saharan Africa: From Crisis to Sustainable Growth, in which it characterized the crisis confronting the region as a “crisis of governance” and linked ineffectiveness of aid with governance issues. Since then, Africa has become the epicenter of debates on governance. Besides Africa, a multitude of projects and programs to assist on governance were started throughout the world, supported by many aid agencies. However, over the past few years, the priority accorded to governance in aid has slackened.  As Daniel Kaufmann of Brookings Institution, mentions in his paper “the strategies and programs that donors implement nowadays are concentrated on the technocratic ‘supply side’, while often ignoring the need for supporting those governance and anti-corruption measures that matter the most for development.”

As the dominant discourse on good governance is increasingly becoming superficial and constricted with a sole emphasis on state institutions and structures, the time has come to broaden the concept to include all formal and informal actors that play a role in decision-making. For starters, Tony Blair’s Africa Governance Initiative (AGI) is pioneering a new way of working, helping to equip committed African leaders with the capacity to deliver the public services. At a recent event in Washington DC, “Not Just Aid: Making Government Work Can Transform Africa“, Blair mentioned:

“without building effective capacity, without governments capable of delivering practical things and on a path to release from dependency on aid, then aid can only ever be a palliative—vital to many, but not transformative of a nation.”

Empirical analysis indicates that good governance and anticorruption are essential to ensure that aid supports domestically-led governance reforms and that it results in country-wide development and poverty alleviation. However, the most challenging policy issue of finding best ways to  link aid to governance in a rigorous and systematic fashion is yet to be mastered.


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