Is Good Governance Good for Progress?

The importance of good governance for progress or development is sometimes an assumption which is hard to dislodge from a global development policy perspective. The interconnection between good governance, human rights and sustainable development has been made directly or indirectly by the international community in a number of declarations and discussions. Similarly, in the corporate world, a renowned Corporate Governance Expert, Professor Mervyn King from South Africa has warned that companies which carry on their businesses without firm structures and systems of corporate governance would not survive the competition in the 21st century. Research findings in this regard are not concrete but do come up with some assumptions that support good governance. However, from a country perspective see Sri Lanka’s achievements in the past 10 years or so, through a layman’s lens;

The Sri Lankan economy has seen robust annual growth at 6.4 percent over the course of 2003 to 2012, well above its regional peers. Following the end of the civil conflict in May 2009, growth rose initially to 8 percent, largely reflecting a “peace dividend”, and underpinned by strong private consumption and investment. Growth was at 7.3 percent in 2013. The country aspires to achieve the goal of per capita income to $4,000 by 2016 from an estimated US$3,194 in 2013. Inflation at less than 4% from a high of 20% a few years ago. Overall, unemployment at 4 percent is low, although youth unemployment (ages 15–24) is at around 17.3 percent. Sri Lanka also met the Millennium Development Goal (MDG) target of halving extreme poverty and is on track to meet most of the other MDGs, outperforming other South Asian countries. The country has also seen vast improvements in road, railways, water, energy and other infrastructures during the past 10 years.

During this same period of 10 or more years there has been an abnormal level of corruption, human rights violations, intimidations, murders, frauds, etc which are still being uncovered by the new government, which won on the platform of reform and good governance. However, based on the happenings of the last 3 months one wonders whilst good governance is a worthy goal by itself, whether it is a prerequisite for economic progress or development.

I’m inclined to subscribe to 3 governance myths, based on our country’s progress so far;

1. Good governance is important for development.
If this means that ideals like transparency in public affairs, accountability of those in power, ability of citizens to make demands, absence of corruption, freedom of enterprise, secure property rights and rule of law – are necessary conditions for success, the answer is clearly no. Economic progress generally helps realize governance ideals and the other way around may be a myth. E.g. Singapore.

2. Governance improvement is a good entry point for developmental reform.
Just based on local experience over the last 3 months, experience tells us that institutions and social norms change slowly at best. Aid-supported institutional change has a well-documented tendency to produce either ‘capability traps’ or purely cosmetic improvements. History, especially the last half-century in Asia, shows that very significant gains in economic transformation and human well-being can be achieved within highly dysfunctional systems. E.g. Sri Lanka, mid-east countries.

3. High levels of transparency, accountability, participation and competition sustain economic development.
Even some of the corporates will call this a myth! The presence of a dominant party with a benevolent thinking drove Singapore to its current status, whereas in the initial years the rule was dictatorial. It probably failed in Sri Lanka due to the absence of benevolence and the presence of nepotism and largely the development work was state driven.

In conclusion, we should not compare governance structures of developed countries with less developed countries. Countries that are developed now did not have the ideal features of good governance at the beginning- these features evolved with economic growth. Hope our leaders and people will temper their longing for governance and focus a little more on the development agenda. This definitely does not mean that you run the country dry with fraud and corruption nor tolerate all the wrongdoing.

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About surenraj

“Views expressed are my own”
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