The Concept of Governance

Lecture 1
 What is Governance?

• Government and governance

• Denotes the exercise of authority in an

organization, institution or state. Government is
the name given to the entity exercising that
authority.

• Authority can most simply define as legitimate

power.
• Power is the ability to influence the behavior of
others, authority is the right to do so.

• Authority is therefore the based on an

acknowledged duty to obey rather than on any
form of coercion or manipulation.
 What is Governance?

• Weber distinguished between three kinds

of authority, based on the different grounds
upon obedience can be established;
traditional authority is rooted in history,
charismatic authority stems from
personality and legal-authority is grounded
in a set of impersonal rules.

• To study government is to study the

exercise of authority.

• Government is closely related to politics.

 What is Governance?

• To study politics is in essence to study government or more broadly,

to study the exercise of authority. Politics is the art of government,
the exercise of control within the society through the making and
enforcement of collective decisions.

• The realm of politics is restricted to state actors who are consciously

motivated by ideological beliefs, and who seek to advance them
through membership of a formal organization such as a political
organization.
 What is Governance?

• This is the sense in which politicians are described as “political”

whereas civil servants are seen as “non political”, the state as “public”
and the civil society as “private”.

• The institutions of the state (the apparatus of the government, the

courts, the police, the army, the society-security system and so forth)
can be regarded as “public” in the sense that they are responsible for
the collective organization of the community life.

• Funded at the public’s expense through taxation.

 What is Governance?

• In contrast, civil society consists of what Raymund Burke called the

little platoons, institutions such as the family and kinship groups,
private businesses, trade unions, clubs, community groups and so on
that are private in the sense that they are set up and funded by
individual citizens.

• On the basis of this public/private life division, government is

restricted to the activities of the state itself and the responsibilities
which are properly exercised by public bodies. Although civil society
can be distinguished from the state, it nevertheless contains a range
of institutions that are thought as “public” in a wider access.
 What is Governance?

• Government does not only decide for all and the civil society and the
private sectors play vital role in the community, thus, the conception of
the word “governance”.

• Governance is a broader term than government.

• Governance refers to the various ways in which social life is

coordinated.

• Government can therefore be seen as one of the institutions in

governance.

• it is possible to have governance without government.

 What is Governance?

• The word governance came from the latin verb “gubernare” originally
from the Greek word “kubernaein” which means to steer.

• Governance is all about steering, governing, controlling, maneuvering a

state, a group of people and organizations (UNESCO).

• During the 1980s, scholars and political scientists expanded the

meaning and purpose of government which includes not only the
government but also civil society
 What is Governance?

Varying Definitions of Governance:

• 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 sound exercise of political, economic, and administrative authority

to manage a country’s resources for development. It involves the
institutionalization of a system through which citizens, institutions,
organizations, and groups in a society articulate their interests, exercise
their rights, and mediate their differences in pursuit of the collective
good “(ADB, Country Governance Assessment 2005).
 What is Governance?
Varying Definitions of Governance:
• 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.

• In governance, citizens are rightly concerned with a government’s

responsiveness to their needs and protection of their rights. In general,
governance issues pertain to the ability of government to develop an
efficient, effective, and accountable public management process that is
open to citizen participation and that strengthens rather than weakens a
democratic system of government. “ The USAID, Office of Democracy &
Governance
 What is Governance?

Varying Definitions of Governance:

• Refers to how any organization, including a nation, is run. It includes all
the processes, systems, and controls that are used to safeguard and
grow assets.” (UNDP, 1997)

• The systems, processes and procedures put in place to steer the

direction, management and accountability of an organization.”
Birmingham City Council. When applied to organizations that operate
commercially, governance is often termed "corporate governance"

• "promoting fairness, transparency and accountability" – World Bank

 What is Governance?

Varying Definitions of Governance:

• "a system by which business organizations are directed and
controlled".- OECD

• the manner in which power is exercised in the management of a

country’s social and economic resources for development. It is referred
to as the quality of the institutions to make, implement and enforce
sound policies in an efficient, effective, equitable and inclusive man The
Asian Development Bank (ADB)

• Governance is about the institutional environment in which citizens

interact among themselves and with government agencies/officials.
(ADB, 2005).
 What is Governance?

Varying Definitions of Governance:

• the process of decision-making and the process by which decisions are
implemented (or not implemented). Governance can be used in several
contexts such as corporate governance, international governance,
national governance and local governance.

• the interactions among structures, processes and traditions that

determine how power and responsibilities are exercised, how decisions
are taken, and how citizens or other stakeholders have their say.
Governance is about power, relationships and accountability: who has
influence, who decides, and how decision-makers are held accountable.
(IOG 2003)
 What is Governance?

Varying Definitions of Governance:

• the process of decision-making and the process by which decisions are
implemented (or not implemented). Governance can be used in several
contexts such as corporate governance, international governance,
national governance and local governance.

• the interactions among structures, processes and traditions that

determine how power and responsibilities are exercised, how decisions
are taken, and how citizens or other stakeholders have their say.
Governance is about power, relationships and accountability: who has
influence, who decides, and how decision-makers are held accountable.
(IOG 2003)
 What is Governance?

Varying Definitions of Governance:

• Governance as the exercise of economic, political and administrative

authority to manage the nation’s affairs at all levels. It comprises of
mechanisms, processes and institutions through which citizens and
groups articulate their interests, exercise their legal rights and
obligations and mediate their differences. Governance is not the sole
domain of government but transcends government to encompass the
business sector and the civil society. NEDA (2006)
 What is Governance?

Varying Definitions of Governance:

• The Institute on Governance defines governance as the process

whereby societies or organizations make their important decisions,
determine who has voice, who is engaged in the process and how
account is rendered. (IOG, 2006)
• The need for governance exists anytime a group of people come
together to accomplish an end. Most agree that the central component of
governance is decision-making. It is the process through which this
group of people make decisions that direct their collective efforts.
 Framework for Understanding Governance
• If the group is too large to efficiently make all necessary decisions, it creates an entity to
facilitate the process. Group members delegate a large portion of the decision-making
responsibility to this entity. In voluntary sector organizations this entity is the board of
directors.

• Governance is "the art of steering societies and organizations." Governance is about the
more strategic aspects of steering, making the larger decisions about both direction and
roles.

• Some observers criticize this definition as being too simple. Steering suggests that
governance is a straightforward process, akin to a steersman in a boat. These critics
assert that governance is neither simple nor neat — by nature it may be messy, tentative,
unpredictable and fluid. Governance is complicated by the fact that it involves multiple
actors, not a single helmsman.
• These multiple actors are the organization's stakeholders.

• They articulate their interests; influence how decisions are made, who the
decision-makers are and what decisions are taken.
• Decision-makers must absorb this input into the decision-making process.

• Decision-makers are then accountable to those same stakeholders for the

organization's output and the process of producing it.
Health Break
 Governance According to UNDP

The challenge for all societies is to create a system of governance

that promotes supports and sustains human development -
especially for the poorest and most marginal. But the search for a
clearly articulated concept of governance has just begun.
 Governance According to UNDP

Governance has three legs: economic, political and

administrative.

Economic governance includes decision-making processes that

affect a country's economic activities and its relationships with
other economies. It clearly has major implications for equity,
poverty and quality of life.

Political governance is the process of decision-making to

formulate policy.

Administrative governance is the system of policy

implementation.
 Governance According to UNDP

• Governance encompasses the state, but it transcends the state by including

the private sector and civil society organizations. What constitutes the state is
widely debated. Here, the state is defined to include political and public sector
institutions.

• UNDP's primary interest lies in how effectively the state serves the needs of
its people.

• The private sector covers private enterprises (manufacturing, trade, banking,

cooperatives and so on) and the informal sector in the marketplace. Some
say that the private sector is part of civil society. But the private sector is
separate to the extent that private sector players influence social, economic
and political policies in ways that create a more conducive environment for
the marketplace and enterprises.
 Governance According to UNDP

• Civil society, lying between the individual and the state, comprises individuals
and groups (organized or unorganized) interacting socially, politically and
economically - regulated by formal and informal rules and laws.
 Governance & Sustainable Human
Development

• UNDP believes that developing the capacity of good governance is

the primordial way to eliminate poverty.

• Notions of good governance and the link between governance and

sustainable human development vary greatly, however, both in
theory and practice (UNDP, 1997).
 Governance & Sustainable Human
Development

What is sustainable human development?

• Human development as expanding the choices for all people in society.

• This means that men and women - particularly the poor and vulnerable
- are at the center of the development process.

• It also means "protection of the life opportunities of future

generations...and...the natural systems on which all life depends"
(UNDP, Human Development Report 1996).

• This makes the central purpose of development the creation of an

enabling environment in which all can enjoy long, healthy and creative
lives.
 Governance & Sustainable Human
Development

What is sustainable human development?

• Economic growth is a means to sustainable human development - not
an end in itself.

• Human Development Report 1996 showed that economic growth does

not automatically lead to sustainable human development and the
elimination of poverty. For example, countries that do well when ranked
by per capita income often slip down the ladder when ranked by the
human development index.

• There are, moreover, marked disparities within countries - rich and poor
alike - and these become striking when human development among
indigenous peoples and ethnic minorities is evaluated separately.
 Governance & Sustainable Human
Development

There are five aspects to sustainable human development - all affecting

the lives of the poor and vulnerable:

1. Empowerment - The expansion of men and women's capabilities and

choices increases their ability to exercise those choices free of hunger,
want and deprivation. It also increases their opportunity to participate
in, or endorse, decision-making affecting their lives.

2. Co-operation - With a sense of belonging important for personal

fulfillment, well-being and a sense of purpose and meaning, human
development is concerned with the ways in which people work together
and interact.
 Governance & Sustainable Human
Development

3. Equity - The expansion of capabilities and opportunities means more

than income - it also means equity, such as an educational system to
which everybody should have access.

4. Sustainability - The needs of this generation must be met without

compromising the right of future generations to be free of poverty and
deprivation and to exercise their basic capabilities.

5. Security - Particularly the security of livelihood. People need to be

freed from threats, such as disease or repression and from sudden
harmful disruptions in their lives
 Governance & Sustainable Human
Development

• UNDP focuses on four critical elements of sustainable human

development: eliminating poverty, creating jobs and sustaining
livelihoods, protecting and regenerating the environment, and promoting
the advancement of women.

• Developing the capacities for good governance underpins all these

objectives.
 The Art of Governing

• To govern is to exercise power and authority over a territory, system or

organization. This applies to both government and governance

• The exercise of authority is uppermost in government and remains

significance in governance but is no longer the single focus. This is
because the power in governance is not so much wielded as shared
and authority is defined not so much by control of the ruler as by the
consent and participation of the governed.

• Is a state weak under a regime of governance? Not necessarily for it

can be stronger than ever before except that the acts expected of it are
different from the role of the state as government.
The Art of Governing

In traditional parlance, government rules and

controls, but in governance, it orchestrates and
manages.
The Art of Governing

• To rule is to be the sole authority, for which the appropriate

response is to obey. A government that rules relies on force to
exact compliance, and you know from introduction to political
science that the state has the monopoly of legitimate violence.

• It enacts laws binding on all the inhabitants and metes out

sanctions according to these laws.

• It delivers services to passive recipients who have little influence

in the definition of the programs or their eligibility requirement and
methods.
 The Art of Governing
• By contrast, to orchestrate is to call on everyone to play a part in moving the
society.

• Power rests on the trust the players have on the director and on each other.
Because it is built on trust, transparency in the conduct of governing is essential.
Laws still bind all, but they are laws they had a part in bringing about.
Accountability is shared, and they who have the greatest power bear the greater
responsibility.

• To control is not to manage, as Landau and Stout maintained in a classic article.

We have not found a definition of governance that uses control instead of
management.

• To control is to direct what each part of the system must do. It assumes that the
controller knows the goals and is certain how an action it requires can lead to it.

• Deviation will be viewed as error in a context of full knowledge.

 The Art of Governing

• Controlling assumes a law (using the term in scientific sense) but to

manage is to act on a hypothesis. The manager works on incomplete
information and tests if the hypothesis is borne out in a given situation.
A manager then must be open to inputs from outside him which might
provide new information and to methods other than those originally
promulgated that could lead to the specified goal.

• Governance chooses management over control because its system is

permeable, admits outside the influences, assumes no omnipotence
or omniscience on the part of the decision-maker, and subjects
decisions to the evaluation and critique of all those with a stake in
them.
 The Art of Governing

• All governing is an act of leadership, of moving a society towards a

preferred direction.

• While government can have a connotation of being interested only in

maintenance and in preserving peace and order, governance implies
leadership toward societal development.

• This is shown in the following passage from the International Institute

of Administrative Sciences….

“Governance is the process whereby elements in society wield power

and authority, and influence and enact policies and decisions concerning
public life, economic and social development.”
 The Art of Governing

• Governance is the process whereby elements in society wield power

and
• authority, and influence and enact policies and decisions concerning
public life,
• economic and social development.”
• This shows that the concept is indeed a product of the late twentieth
century
• when development became a preoccupation of societies and states.
The definition of
• development shall be discussed on the succeeding modules.
Health Break
 Theories of Governance

• The (mostly European) literature on governance and the increasingly

international scholarship on New Public Management (NPM) describe
two models of public service that reflect a ‘reinvented’ form of
government which is better managed, and which takes its objectives
not from democratic theory but from market economics (Stoker, 1998).

• Essentially, governance is a political theory while NPM is an

organizational theory (Peters and Pierre, 1998).

• As Stoker describes it, Governance refers to the development of

governing styles in which boundaries between and within public
and private sectors have become blurred.
 Theories of Governance

• The essence of governance is its focus on mechanisms that do not

rest on recourse to the authority and sanctions of government….

• Governance for (some) is about the potential for contracting,

franchising and new forms of regulation. In short, it is about what
(some) refer to as the new public management.

• However, governance …is more than a new set of managerial tools. It

is also about more than achieving greater efficiency in the production
of public services.

• Peters and Pierre agree in saying that governance is about process,

while NPM is about outcomes (1998, p. 232).
 Theories of Governance

• Governance is ultimately concerned with creating the conditions for

ordered rule and collective action.

• NPM is a series of innovations that – considered collectively –

embody public choice approaches, transaction-cost relationships, and
preferences for efficiency over equity.
 Theories of Governance

Stoker (1998, p. 18) draws five propositions to frame our understanding

of the critical questions that governance theory should help us answer.
He acknowledges that each proposition implies a dilemma or critical
issue.

1. Governance refers to institutions and actors from within and beyond

government. (But there is a divorce between the complex reality of decision-
making associated with governance and the normative codes used to explain and
justify government). The question, as it relates to policy implementation, is one of
legitimacy. The extent to which those with decision-making power are seen to be
legitimate (in the
normative sense) will directly impact their ability to mobilize resources and promote
cooperation and build and sustain partnerships. Beetham suggests that for power
to be legitimate it must conform to established rules; these rules must be justified
by adherence to shared beliefs; and the power must be exercised with the express
consent of subordinates (1991, p. 19).
 Theories of Governance

2. Governance identifies the blurring of boundaries and responsibilities

for tackling social and economic issues. This shift in responsibility goes
beyond the public-private dimension to include notions of communitarianism
and social capital. (However, blurring of responsibilities can lead to blame
avoidance or scapegoating). An interesting research area that has grown in
scope and importance following the implementation of welfare reform is the
study of faith-based organizations’ role and impact in service delivery. Public
agencies have not merely endorsed or encouraged this partnership, but in
some cases have institutionalized these arrangements. This suggests a shift in
responsibility beyond the more traditional notions of contracting out and
privatization. At the same time, all of these activities contribute to uncertainties
on the part of policy makers and the public about who is in charge and who can
be held accountable for performance outcomes. Implementation theory must
attend to the nature and impact of responsibility and accountability.
 Theories of Governance

3. Governance identifies the power dependence involved in the

relationships between institutions involved in collective action.
Organizations are dependent upon each other for the achievement of
collective action, and thus must exchange resources and negotiate
shared understandings of ultimate program goals. The implementation
literature is replete with studies of coordination barriers and impacts (for
example, Jennings and Ewalt, 1998). (Nonetheless, power dependence
exacerbates the problem of unintended consequences for government
because of the likelihood of principal-agent problems.) For
implementation scholarship to contribute to a greater understanding of
governance relationships, arrangements for minimizing (and impacts of)
game-playing, subversion, creaming and opportunism must be explored.
 Theories of Governance

4. Governance is about autonomous self-governing networks of

actors. (The emergence of self-governing networks raises difficulties
over accountability). Governance networks, in Stoker’s terms, “involve
not just influencing government policy but taking over the business of
government” (1998, p. 23). The “hollow state” that networks have
triggered (Milward, 1996; Milward and Provan, 2000) raises questions
about how government can manage public programs when they consist
largely of entities outside the public domain. Network theory and
governance issues overlap, and they are both directly linked to questions
of implementation.
 Theories of Governance

5. Governance recognizes the capacity to get things done which does

not rest on the power of government to command or use its authority.
(But even so, government failures may occur.) It is in this proposition that
we find a natural progression from the more encompassing theory of
governance to the more prescriptive notions of New Public Management.
Stoker notes that within governance there is a concerted emphasis on new
tools and techniques to steer and guide. The language is taken directly from
reinventing themes. The dilemma of governance in this context is that there
is a broader concern with the very real potential for leadership failure,
differences among key partners in time horizons and goal priorities, and
social conflicts, all of which can result in governance failure. Stoker draws
on Goodin as he suggests that design challenges of public institutions can
be addressed in part by “revisability, robustness, sensitivity to motivational
complexity, public defendability, and variability to encourage
experimentation” (Stoker, 1998, p. 26, quoting from Goodin, 1996, p. 39-43).