Revisiting Good Governance: Good Enough Governance and Just Enough Governance Approaches as a Functional Framework for Developing Countries (original) (raw)
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Socio-Political Governance, Institutional Functioning and Economic Development
Argumenta Oeconomica Cracoviensia, 2017
As macroeconomic stabilisation and structural adjustment policies have not been particularly successful, it becomes increasingly necessary to consider the role of additional economic parameters in the growth process. In this context, governance (the balance of powers, rational resource management, transparency of rules, involvement of civil society, etc.) has become inextricably linked to the analysis of the development of the countries of the South. Closely related to that of institutions, this notion of governance is a polysemous one. In spite of that, the concept of governance is currently the core question in debates about how international financial organisations use the idea of "good governance". This paper examines the need for "good governance" as a prerequisite for growth and development for developing countries and studies the possibilities of economic convergence at the international level (i.e. developing countries catching up with industrialised ones) based on the influence of socio-political variables on local governance.
Research and Analysis Journal , 2018
This paper revisits the main arguments on the role of ̳good governance‘ in facilitating economic development. It observes that there are some examples in which neoliberal ̳good governance‘ played a role in facilitating economic development but there are many other examples in which countries attained some level of economic development with governance institutions that were bereft of much 'good governance‘ elements. Thus, it concludes that 'good governance‘ is not an essential pre-requisite for development but it might play some role in facilitating development. The paper argues against the dominant 'one-size-fits-all‘ approach to good governance and support 'good enough governance‘, that encourage reforms to be questioned, prioritised, and made relevant to the conditions of individual countries.
PhD diseratation, 2020
This research focuses on the multidimensional aspects of institutional quality and governance with the objective of finding an argumentative, qualitative, and quantitative relationship between economic development and changes in the economic structure of an economy, utilizing comparative analysis between new classical and new institutional policy concepts as philosophical and theoretical foundations. Researchers predominantly associated with the new classical school of thought have generally ignored and often discarded phenomena like institutions, law, and norms in their analysis while exploring factors affecting economic growth. Consequently, policymakers across the world could not timely react to the question of why some nations are unsuccessful in developing their economies while other nations demonstrate success. Hence, this study utilizes ontological reasons using a logical construct based on comparative analysis between New Classical Economics (NCE) and New Institutional Economics (NIE). Consequently, it establishes an epistemological foundation for adopting institutional-related variables like law, organizational performance, corruption, governance structure, attitude of public servants, political stability, crime rate, regulatory quality, human development indicators, etc., as core economic performance variables. The study also considers structural changes in the economy as a phenomenon that can be directly influenced through changes in institutional performance and the governance situation in a society. While investigating the impact of institutional performance, quality, and governance on indicators of economic development, GDP per capita, poverty, environment, FDI, and taxation performance have been considered as proxies for economic development. More than a dozen governance and institutional quality indicators for over 60 countries from various sources have been utilized as exogenous phenomena in the simulation exercise. The maximum ranges of data for the aforementioned indicators have been extracted from multiple sources. Econometric results from thousands of regressions have been obtained through looping technology in programming to calculate extreme bound values, i.e., maxima and minima of the probability distribution of Beta values. Five background research papers written by the author provide the foundation for this dissertation, hence providing five core dimensions in order to capture the phenomena of economic development, which inter alia include a) GDP per capita, b) poverty, c) environment, d) FDI, and e) taxation. The study has tested the significance of more than a dozen hypotheses empirically from various dimensions to verify the theoretical foundation of the research. The results conclude that in order to achieve a higher level of GDP per capita, a better safety situation and a lower level of corruption are fundamental to achieving this goal. The Multiple Poverty Index (MPI) proves to be extremely sensitive to the aforementioned governance and institutional quality variables. Systematic tax evasion and a less corrupt tax apparatus are main factors for the reduced level of the Tax-GDP ratio. Cross-country analysis provides sufficient grounds that policy designs for making a country more investment-friendly require these variables to be addressed by public policy managers in a country on a priority basis. The environment is an important policy paradigm for measuring the development condition of a country. EBA results show that the relationships between the Environment Protection Index (EPI) and more than ten institutional quality and governance indices are moderately sensitive and robust. This research has principally contributed to the literature in four dimensions. Firstly, it provides sufficient grounds that the New Institutional Economics (NIE) framework offers a more encompassing policy paradigm than New Classical Economics (NCE) for pragmatic purposes. An effective public policy mechanism under the NIE framework will lead economies to the next stage of development far quicker than a country under the NCE policy prescriptions. Secondly, the research synchronizes the concepts of old institutional economics with modern NIE streams, reconciling concepts offered by W.A. Lewis and W.W. Rostow with those of Douglass North and Francis Fukuyama. It explains that the two-sector theory and five stages of development are old explanations of institutional changes and governance situations, confirming continuity in the NIE framework of analysis with new theoretical explanations. Thirdly, this research contributes to the debate on model specification, concluding that EBA is far superior to simple regression, as the simple regression model has two fundamental problems. Fourthly, the research provides sufficient grounds that institutions and governance matter in a significant and robust way to economic development. Key words: economic development, structural change, governance, institutions, institutionalism, NIE, taxation, environment, poverty JEL Classification: D02, E02, F64, H26, I32, K49
Governance, Economic Growth and Development since the 1960s
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Economists agree that governance is one of the critical factors explaining the divergence in performance across developing countries. The differences of view between economists regarding governance are to do first, with the types of state capacities that constitute the critical governance capacities necessary for the acceleration of development and secondly, with the importance of governance relative to other factors at early stages of development. On the first issue, there is an important empirical and theoretical controversy between liberal economists who constitute the mainstream consensus on good governance and statist and heterodox institutional economists who agree that governance is critical for economic development but argue that theory and evidence shows that the governance capacities required for successful development are substantially different from those identified by the good governance analysis. The economists in favour of good governance argue that the critical state...
Governance and Development: The Perspective of Growth-enhancing Governance
Most economists would agree that governance is one of the critical factors determining the growth prospects of countries. However, there is considerable controversy about governance priorities and the types of governance capabilities that are critical. These disagreements are related to fundamental disagreements on the role of markets versus other social, political and technological characteristics that need to be fulfilled for sustainable growth to take off. The contemporary good governance agenda is based largely on governance capabilities that are required to create the conditions for markets to be efficient. While these are important and desirable conditions, we argue that they are second order conditions, in the sense that without other state capacities that directly promote sustainable growth, market conditions for efficiency are on their own insufficient and ultimately unsustainable. The point about sustainability of particular reforms is particularly important. There are a number of critical structural features of developing countries that prevent the achievement of significant progress on the good governance front. These factors make the good governance agenda doubly problematic: it sets many developing countries goals they cannot achieve, and in addition, even if they could have been achieved, these goals are not sufficient to ensure sustainable growth. The task of this paper is to outline some of the governance issues that we already know about, and identify other areas where more research is necessary to assist policy.
Institutions, Governance and Political Economy of Development: Some Reflections
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Institutional Approaches to Economic Development: The Current Status of the Debate
Journal of Economic Issues, 2012
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ROLE OF GOOD GOVERNANCE IN ECONOMIC AND GOVERNMENT REFORMS
Economic governance has been the foundation of the economic development and growth. Impact of good governance and role of institutions in the process of economic growth and development required for governance have been crucial to investigate due to lack of theories to incorporate the role of good governance in the process of economic growth and institutional reforms. The status of economic growth is dependent on the capacity of institutions, especially in case of an economic structure where state has major role in market and formulating the macroeconomic policies. Good Governance demands participation of all the actors and most of the time public institutions' role and their participation in understanding potential in economic development visa -vis in dynamic global arena is not deliberated. Moreover, economic development is mutually contributed by both public and private institutions. Scrutiny of the good governance principles and political economy of the public sector institutions, it emerges that economic governance depends on the institutional capacity building aliened with more realistic good governance principles. This practice eventually leads towards alleviating internal inefficiency and objective progress eventually reflected by the socioeconomic growth and development at large. This paper analyses the dimension of good governance with historical context to Pakistan and proposes short term and long term measures for economic and governance reforms in Pakistan