NJDRS 1

CDRD
DOI: https://doi.org/10.3126/njdrs.v16i0.31530

Prospect of Good Governance and Human Development

Deepak Chaudhary
PhD Scholar, Central Department of Rural Development
Kirtipur, Kathmandu
Email for correspondence: [email protected]

Abstract
The governance now became a buzzword in political economy. It contributes to accelerating the
overall development including human development and its role in making effective delivery of social
and public services are crucial. This paper analyzes the relationship between governance and human
development based on published data, document and theories. The concept of governance and human
development emerged after 1980. The proper function of governance in terms of political, economic
and administrative can create sound development. Rule of Law, participation, public accountability
and responsiveness, transparency, equity and inclusion, efficiency, and decentralization are a
key institutional framework for democratic or good governance. These principles are structured
to performing well for the assigned goals and objectives, transparent decisions, focusing on the
organization's purpose and outcomes, capacity building, and managing and mitigating risks factors.
If there is enough authority, capacity, economic resource, and good governance, human development
can easily be achieved. Therefore, the linkage between governance and human development is
inevitable.
Key words: Capacity building, good governance, human development, political economy
Background
Over time, ‘development’ is understood as different meanings. Following the industrialization in the
mid-18th century, the modern development process was considered to have begun. Following the
World War-II, development was introduced in planning and systematic way through institutions to set
up the new political-economic structure and development focused on economic growth particularly.
In the concept of economic growth of development, the human was considered as labors or means; it
was not considered as a sole beneficiary. After 1980, resistances emerged in many parts of the world,
as it could not go below (Escobar, 1995) and debt-problem emerged as a worldwide’s problem. Many
countries failed to achieve the goals of development due to the lack of political willingness and good
governance. Good governance is considered to be enhancing for sound development. The concept of
human development emerged after 1990 as a part of alternative development and human capital and its
importance was realized. The health, knowledge, and skills as a part of human development attracted to
the many. The human capabilities and freedom became a major part of human development.
Nepal’s experience regarding the development is not more different from other developing
country’ experiences. After 1950, Nepal introduced the modern concept of development in terms of

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2 Deepak Chaudhary

GNI (Gross National Index) or industrialization through five-year plans. However, development could
not make a big leap; underdevelopment remains for longs. Pandey (1999, p. 6) mentions that the word
‘bikas’ sells in the country –as a dream, as an occupation; and as a weapon to beat one’s political
opponents with, but the subject has not been internalized as a mission. After 1990, Nepal also adopted
the human development approach focusing on people and their living standards along with economic
growth. In 1998, Nepal published its first human development report. Then after, five themes of HDRs
have been published in different subjects. However, Nepal faces poor human development progress.
Nepal’s ranking in the human development index is 145, which is lower in South Asia (UNDP, 2014).
Therefore, the role of good governance in order to achieve sound human development is crucial.
Governence and Human Development
Governance. Mainly, the governance relates to the institutions (i.e. its mechanism, processes,
and functions) either traditional or modern by which authority is exercised; where citizens and groups
communicative and exercise their legal rights. Hence, the success of governance in terms of planning,
policies, strategy, and implementation determines the success of the development. Human development
is a new approach that focuses on people primarily. To promote and sustain human development, the
system of governance’s role is vital. Presently, developing countries including Nepal have been facing
problem and challenge of implementing human development in the absence of good governance.
As of UNDP (1990) governance as the exercise of political, economic and administrative
authority in the management of the country’s affairs at all levels. Therefore, it includes the mechanism,
process, relationship and institutions through which people and group communicate and interact to
get developmental goals. For, the functioning of the political economy, rule of law is essential; the
state, civil society and private-sectors/markets are three component of the political economy. Haq
(1995) focuses on human governance that enables the state, civil society and the private sector to build
capacities, which will meet the basic needs of all. Therefore, the relationship among state, government,
and civil society are important and the role of governance is crucial. In this circumstance, the function
of these economic, political and administrative governances in institutions is important. The economic
governance includes decision making in resources, budgetary part and the easy access on market for
people that ensure the economic activity. The political governance comprises of judicial, executive
and legislative in a broader sense (Mudacumura, 2014). It includes elect-representatives, leadership,
decision making in the planning of the development. Likewise, administrative governance represents
the implementation body that delivers social and public services. The public delivery services may
be effective if there is good governance. Apart from, the civic society’s role in check and balance on
state and market’s monopoly is important. Democratic governance ensures participation, inclusion,
equity, responsiveness, and transparency. Therefore, the democratic based institution is considered as a
support means for good governance largely. The genesis of governance comes from a democratic and
neo-liberal concept.

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 Prospect of Good Governance and Human Development 3

Institution

Governance

Human Development Good Governance

Figure1. Relationship between Human Development and Good Governance

Therefore, development and governance are interrelated; good governance can only assure
and sustain human development (UNDP, 2009). Accountability, transparency, inclusiveness, and
responsiveness are key parts of good governance which are crucial for sound human development.
Human development. The concept of human development introduced after the publication
of the Human Development Report in 1990 prepared by UN (UNDP, 1990). People have been a central
part of human development. Income, education, and health are considered key elements of human
development and these are essential for enhancing human abilities and making people capable of
choices. Additional choices include freedom, guaranteed human rights and personal self-respect. The
expansion of freedom is central to development (Sen, 2000). Equity, sustainability, production, and
empowerment are four essential components in the human development paradigm (Haq, 1995).
According to the HDR 1990-, “Human development is a process of enlarging people’s choices.
The most critical of these wide-ranging choices are to live a long and healthy life, to be educated and
to have access to resources needed for a decent standard of living.” (p. 11). The life expectancy for
longevity, literacy rate and school attainment for knowledge and income for decent living standards
are fixed as indicators in order to measure these elements. “Human development has two sides: the
formation of human capabilities - such as improved health, knowledge, and skills- and the use people
make of their acquired capabilities. If the scales of human development do not finely balance the two
sides, considerable human frustration may result.” (HDR, 1990, p. 12) Human development ultimately
strengthens human capital, which is considered to be essential for economic development.
Global human development. UNDP, the body of the UN, has been publishing the Human
Development Report (HDR) yearly in different themes. The first human development report exposed
enlarging people’s choices. Mobilization of maximum resources for social services was prioritized by
1991 HDR. HD 1993 focused on inclusive and collective action through decentralization strengthens
civil society and people’s participation. Similarly, HDR 1995 emphasized gender inequality. Poverty
was given a priority by HDR 1997. Poverty has two dimensions- in the form of income and in
deprivation form. HD 1999 paved the way of the impact of globalization. Human right and human
freedom were discussed in HD 2001R. Meanwhile, HDR 2002 focused on political implication and
democratic governance to safeguard freedom and dignity and empower people. Likewise, HDR 2003
explored the Millennium Development Goals (MDGs) adopted by 189 countries at the UN in 2000.
The MDGs are a global compact among nations to end human poverty. The theme of cultural liberty
to choosing one’s identity without being excluded from other choices in building a full life emphasizes

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4 Deepak Chaudhary

multi-cultural policy was focused in HDR 2004. Climate change was highlighted in HDR 2007/8. HDR
2016 emphasizes human development for everyone. In 2010, the Inequality-adjusted HDI (IHDI) was
first introduced; The IHDI is the HDI adjusted for inequalities in the distribution of achievements in
each of the three dimensions of the HDI (health, education, and income). In this way, various themes
as per necessitate have been focused by HDRs.
Human development index. Human Development Index (HDI) is a summary measure of
average achievement in key dimensions of human development. The HDI is the geometric mean of
normalized indices for each of the three dimensions. According to HDR 2018, the health dimension
is assessed by life expectancy at birth; the education dimension is measured by mean of years of
schooling for adults aged 25 years and more and expected years of schooling for children of school
entering the age. The standard of living dimension is measured by gross national income per capita.
The indicators of the three dimensions are calibrated and an HDI score set between zero and one. Four
human development categories or quartile such as very high, high, medium and low are classified. Very
high HDI ranks above 75, 51–75 represents high, and 26-50 represents the medium group and below it
is classified under bottom quartile. Figure 2 shows the principle of human development indexes:

Dimensions Long and Healthy Life Education/Knowledge Standard of Living GNI

Indicators Life expectancy At birth Mean years of schooling per capita (PPP$)
Dimension Life expectancy index Education index GNI index
Index

Human Development Index (HDI)

Figure 2. The Principles of Human Development Index Composition
(http://hdr.undp.org/en/content/human-development-index-hdi)

Objectives
• To assess the relationship between governance and human development.
• To analyzes role of governance in the human development pragmatic way.
Methods and Materials
This work is based on analysis and literature reviews and secondary data including published
Human Development Reports (HDRs). The study is exploratory and analytical in nature because it
intends to explore the focus of the trends of human development worldwide and Nepal. Besides, the
theories regarding development and governance are reviewed.
Discussions: Nepal Human Development
The first Nepal Human Development report was published in 1998 and then, five themes
of HDRs have been published in different contemporary issues till now. HDR 1998 explored public
domain and planning in the country. Poverty reduction and governance were dealt with by HDR
2001. HDR 2002 focused on empowerment and poverty reduction. Likewise, HDR 2009 explored
state transformation and human development. Similarly, HDR 2014 focused on beyond geography,
unlocking human potential. In this way, various themes have been dealt with by human development
reports. Tenth plan (2002-2007) of Nepal has also included the human development approach, which
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 Prospect of Good Governance and Human Development 5

announced inclusion, empowerment, and affirmative action’s to bring poor, women and disadvantaged
to development mainstream.
Trends of Nepal Human Development
As of Human Development Indices and Indicators: 2018 Statistical Update, Nepal’s HDI
value for 2017 is 0.574, which put the country in the medium human development category. Nepal’s
ranking is at 149 out of 189 countries. Table-1 reveals that life expectancy is higher in comparison with
the average of South Asia, however, mean years of schooling is found below South Asia. Similarly,
Nepal’s GNI per capita is much lower in South Asia. Sri Lanka represents the highest HDI value (0.77)
-positioning 76 out of 189 countries.
Table 1. HDI and Indicators for Selected Countries and Groups, 2017
Countries HD HDI Life Expectancy at Expected years Mean years GNI Per capita
Rank birth of schooling of schooling
Value (2011ppp $)
Nepal 0.574 149 70.6 12.2 4.9 2271
Afghanistan 0.498 168 64 10.4 3.8 1824
Sri Lanka 0.77 76 75.5 13.9 10.9 11326
South Asia 0.638 69.3 11.9 6.4 6473
Medium HDI 0.645 69.1 12 6.7 6849
(UNDP, 2018)
Nevertheless, Nepal has been improving its HDI over the decades. In 1990, Nepal was
counted in bottom quartile; mean years of schooling and expected years of schooling was only 2 and
7.5 (refer Table-2). Now it has been near doubled over two decades. Similarly, life expectancy at birth
has steadily been increased from 54.3 in 1990 to 70.6 years in 2017. Likewise, GNI per capita has also
been doubled over the decades. Overall HDI value is improving as it was 0.378, which represents low
quartile. Table-2 reviews Nepal’s progress in HDI indicators:
Table 2. Nepal’s HDI Trends based on Consistent Time Series
Years Life expectancy at Expected years of Mean years of GNI Per capita HDI
birth schooling schooling value
(2011ppp$)
1990 54.3 7.5 2 1168 0.378
1995 58.5 8.1 2.2 1322 0.41
2000 62.4 9 2.4 1526 0.446
2005 65.5 9.6 2.8 1689 0.475
2010 67.9 12 3.3 2001 0.529
2015 69.9 12.2 4.7 2353 0.566
2016 70.3 12.2 4.9 2334 0.569
2017 70.6 12.2 4.9 2471 0.574
(UNDP, 2018)
Nepal Human Development Report (HDR) 1998 first published regarding the inequalities by
caste/ethnicity. Further, HDR 2014 derived human development index by caste/ethnicity based on the
2011 census. As of HDR 2014 report, the Brahmans/ Chhetris and Newar rank at the top with an HDI.
Similarly, Dalits including both hill and Tarai have the highest poverty headcount rate followed by
Janajati and Muslim.
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Table 3. HDR based on Caste/Ethnicity

Caste/Ethnic Group Poverty Headcount Rate Percent of Poor
Hill Brahman 10.3 5.2
Hill Chhetri 23.4 16.6
Tarai Brahman 18.6 0.4
Tarai middle caste 28.7 17.6
Hill Dalit 43.6 15.2
Tarai Dalit 38.2 6.9
Newar 10.3 2.5
Hill Janajati 28.3 24.4
Tarai Janajati 25.9 7.3
Muslim 20.2 3.5
Other 12.3 0.5
Nepal 25.2 100
(NHDR, 2014)
Structures of Good Governance
According to the World Bank (1992), “Governance is defined as the manner in which power
is exercised in the management of a country’s economic and social resources for development”.
UNDP 2009 acknowledges participation, transparency, responsiveness, consensus, orientation, equity,
effectiveness and efficiency, accountability and strategic vision as a core characteristic of governance.
Mudacumura (2014) mentions that good governance or democratic governance is a practice, the
implementation of which is critical in allowing both developed and developing countries to be in the
driver seat as they control their political, economic and social development effectively (p. 2). Good
governance is becoming more and more commonplace as a key element of development. Good
governance is central to creating and sustaining an environment, which fosters strong and equitable
development (World Bank, 1992, p. 47).
The Governance practice supports to build capable, efficient, inclusive, responsiveness and
accountable institutions and it enhances sound human development. Freedom, participation, public
accountability and responsiveness, transparency, equity and inclusion, efficiency, and decentralization
are a key institutional framework for good governance. Governance is the act of governing. It consists
of a part of decision-making or leadership processes. Governance has also been defined to refer to
structures and processes that are designed to ensure accountability, transparency, responsiveness, rule
of law, stability, equity and inclusiveness, empowerment, and broad-based participation. In a broad
sense, governance is about the culture and institutional environment in which citizens and stakeholders
interact among themselves and participate in public affairs. It is more than the organs of the government
that are presented below:
State, governance and civil society. The role of civil society in promoting good governance
is vital for healthy development. Therefore, balance among government, citizens and civil society is
essential for human development.
Democratic or good governance. In 1989, the World Bank used the term “governance” to
describe the need for institutional reform and efficient public sector in Africa (Keping, 2018) and then,
good governance term has frequently been used. Good governance includes participatory, transparent,

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 Prospect of Good Governance and Human Development 7

accountable, effective and equitable and promotes the rule of law. Now a day’s good governance is
the basic requirement for foreign help or aids. Good governance is considered as last resort whereas
governance reform is a journey for reaching the desired destination.
The principle of good governance. According to UNDP (1997), there are eight basic
principles of governance which are summarized below:
Participation/empowerment. Participation is the most essential things for good governance.
As far as possible, the most vulnerable groups in society should be included in decision-making.
Government alone cannot end corruption, ensures accountability, impartiality, competent and able
administration. Therefore, there should be active participation of the people, the civil society and non-
governmental organizations to maintain good governance. It is one of the challenges of governance in
Nepal. Participation of Nepalese citizens in the state affairs directly or through legitimate institutions
or representatives is important for good governance in Nepal.
Rule of law. Good governance requires fair judicial frameworks for maintaining the law that
ensures the right of stakeholders. Good governance cannot be achieved if there are weak, incompetent
and corrupted judiciary and police force.
Transparency. Transparency is the most essential things for good governance. Good
governance can be promoted only where decisions are made and implemented according to rules and
regulations in a transparent way and public information is available easily.
Responsiveness. Responsiveness is the most essential things for good governance; it means
being responsiveness to the needs and expectations of the people. It is the duty of the responsible
officials to serve and deliver services to the people within stipulated time-frame.
Consensus. Good governance requires consultation to understand the different interests of
stakeholders in order to reach a broad consensus. It makes development as sustainable and local-
stakeholders take its ownership’s feeling.
Effectiveness and efficiency. Good governance should ensure the effective and efficient use
of available resources in the most transparent and accountable ways. This will ensure good services for
public delivery.
Accountability. Good governance requires accountability on the part of every institution:
government or private towards the people going to be affected by its decisions or actions.
Issues and Challenges of Good Governance
Political challenge. Political instability, frequent change in government, weak peace and
security, strike, agitation, violence and so on are the key challenges in political governance.
Economic challenge. Many developing countries have been facing a shortage of human/
cultural capital. Presently, Nepal is facing a scarcity of skilled manpower because most of them are
going to abroad.
Legal and constitutional related challenge. The lack of practicing law or rules, no proper
punishment for corruption, political interference in the judiciary, and delay in making rules are the
challenges in the wake of good governance.
Administrative related challenge. Lack of trained staff and professionals, poor technology,
and corruption are the key challenges in administrative governance.

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Conclusion
Human development is indeed important as it makes people capable and its positive role in
alleviating poverty is not hidden. Good governance can play a vital role in this regard. The Kerala
state of India is a worthy example in the world who achieved sound human development (education
& health sector) through good governance despite low economic development and it strengthen social
integrity. Therefore, the relationship between governance and human development is interrelated;
good governance can make an effective role in the implementation of human development and the
improvement of human development can also contribute to good governance.
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