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KYRGYZSTAN

What is good governance: main


aspects and characteristics
Roman Mogilevsky
Center for Social and Economic Research
CASE-Kyrgyzstan
Presentation at the Roundtable VIII of the Fostering Global
Responsibility Project, Chisinau, Moldova, 10 June 2010
Contents
Notion and definitions of governance
Importance of good governance for
development
Key areas of governance
Measuring governance
Practical implications

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Development and governance
Early thinking– resource scarcity is a cause of
poverty and under-development; so, more
resources are needed
Next step – right policies
Next step – right (formal) institutions
Next step – rules, which govern formation and
functioning of society-specific institutions
Governance is a key
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Definitions of governance
 Many definitions exist
 “Traditions and institutions by which authority in a
country is exercised” (World Bank)
 “The process of decision-making and the process by
which decisions are implemented” (UNESCAP)
 “Governance refers to the formation and
stewardship of the formal and informal rules that
regulate the public realm, the arena in which state
as well as economic and societal actors interact to
make decisions” (ODI)
 International, national, local, corporate governance
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The role of governance
on national and local level
Key factors of development—education, health,
security etc.—are public goods to be provided
by central and local governments
The share of GDP managed by government is
positively correlated with the level of country’s
development
Performance of government is a central
component of governance and a pre-requisite
for successful development of a country
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Good governance
Some types of governance produce better
outcomes than others
Understanding of good governance inspired by
Universal Declaration of Human Rights
Principles of good governance

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Dimensions of governance (WGI)
Voice and Accountability

Political Stability and Absence of Violence

Government Effectiveness

Regulatory Quality

Rule of Law

Control of Corruption
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Arenas of governance (WGA)
Civil society

Political society

Government

Bureaucracy

Economic society

Judiciary
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Measuring governance
Many frameworks exist
All contain expert judgment as a key element
International and local experts
Two examples:

World Governance Indicators (WGI)

World Governance Assessment (WGA)


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World Governance Indicators
Developed by the World Bank
Period from 1996 to 2008
212 countries and territories
Six aggregate indicators measuring various
dimensions of governance
Range from -2.5 to 2.5; the higher the better
Based on hundreds of specific and disaggregated
individual variables
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World Governance Indicators (2)
35 data sources provided by 33 different
organizations
Some data sources:
- Afrobarometer - Freedom House
- Business Environment and - WEF Global
Enterprise Performance Survey Competitiveness Survey
- Bertelsmann Transformation Index - EBRD Transition Report
- Heritage Foundation Index of - Open Budget Index
Economic Freedom
Etc.
Allow for cross-country comparisons and for
measuring progress over time 11
World Governance Assessment
Initiated by the UN University (Tokyo) and
continued by ODI/DHF
Two rounds – 2000-2001 (23 countries) and
2006 (10 countries, of which 6 countries for the
second time)
Survey of 70-80 Well-Informed Persons (WIPs) in
every participating country
WIPs represent ten categories: Academics,
Business, Civil Servants, Government Ministers,
International Organizations, Judicial, Media,
NGOs, Parliamentarians, and Religious 12
World Governance Assessment (2)
36 indicators/questions
Each question relates to the situation now and
five years ago
Response scale from 1 (very low quality) to 5
(very high quality)
Comments of WIPs and country coordinators
Comparable with other governance measuring
techniques
Allow for cross-country comparisons and for
measuring progress over time
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Use of governance assessments
Analytical work, formation of policy agenda and
advocacy
Allocation of aid resources by international
financial institutions – governance indices as a
proxy for absorption capacity
- Country Policy and Institutional Assessments
by the World Bank, African Development Bank,
Asian Development Bank
- Rural Sector Performance Assessments by the
International Fund for Agricultural Development
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Governance agenda in relations between
donors and recipient countries
Governance-related issues are perhaps the most
sensitive part of donors’ conditionality
Donor-government conflicts around governance
are many and sometimes end with non-
disbursement of originally planned amounts
In many cases, governments opt for imitation of
governance reforms rather than introducing
real, often politically-painful, reforms

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Governance agenda in relations between
donors and recipient countries (2)
Donors’ approaches to governance reforms are
not without drawbacks:
- too much emphasis on imports of institutions
- insufficient understanding of informal rules
and vested interests in recipient countries
- too much attention to reform outputs (e.g.,
establishing an institution), too little attention to
outcomes/impact (what it is actually doing)
- no built-in M&E mechanisms
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Governance agenda in relations between
donors and recipient countries (3)
In some cases donors are more interested in
disbursements than in promoting good governance
Principal-agent problem: principals (societies in
both donor and recipient countries) are interested
in governance reforms, agents (recipient
governments and donor agencies) may have a
different incentive structure
The role for NDGOs both from donor and recipient
countries – to fix the incentive structure for the
agents
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Conclusions
Good governance is a key for development
Governance is measurable, and different
measures could be used for solving different
problems
Governance agenda is very important in donor-
recipient relationships
Non-governmental players have a crucial role in
keeping governance issues really high on the
development agenda
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Thank you!

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Median size of government expenses
35
30
25
20
% GDP

15
10
5
0
Top ten HDI HDI ranks 41 -50 HDI ranks 111 -120 Bottom ten HDI
(EU NMS) (some FSU)

Sources: HDR 2009, Worldwide Development Indicators 20


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Voice and The extent to which a country's
Accountability citizens are able to participate in
selecting their government, as
well as freedom of expression,
freedom of association, and a
free media

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Political Likelihood that the government
Stability and will be destabilized or
Absence of overthrown by unconstitutional
Violence or violent means

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Government Quality of public services, the
Effectiveness quality of the civil service and the
degree of its independence from
political pressures, the quality of
policy formulation and
implementation, and the credibility
of the government's commitment to
such policies

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Regulatory Ability of the government to
Quality formulate and implement sound
policies and regulations that permit
and promote private sector
development

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Rule of Law The extent to which agents have
confidence in and abide by the rules
of society, and in particular the
quality of contract enforcement,
property rights, the police, and the
courts, as well as the likelihood of
crime and violence

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Control of The extent to which public power is
Corruption exercised for private gain, including
both petty and grand forms of
corruption, as well as "capture" of
the state by elites and private
interests

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Voice and Accountability Regulatory Quality
2.5 2.5
2.0 2.0
1.5 1.5
1.0 1.0
0.5 0.5
0.0
0.0
-0.5
-0.5 -1.0
-1.0 -1.5
-1.5 -2.0
-2.0 -2.5
-2.5 -3.0
Norway - Czech Hungary Slovak Poland Moldova Myanma Hong Kong Hungary Slovak Czech Poland Moldova Somalia
the best Republic Republic - the worst - the best Republic Republic - the worst
performer performer performer performer

Political Stability and Absence of Rule of Law


Violence 2.5
2.5 2.0
2.0 1.5
1.5 1.0
1.0 0.5
0.5 0.0
0.0
-0.5 -0.5
-1.0 -1.0
-1.5 -1.5
-2.0 -2.0
-2.5 -2.5
-3.0
-3.5 -3.0
Luxemburg Czech Slovak Poland Hungary Moldova Somalia Norway - Czech Hungary Slovak Poland Moldova Somalia
- the best Republic Republic - the worst the best Republic Republic - the worst
performer performer performer performer

Government Effectiveness Control of Corruption


2.5 2.5
2.0 2.0
1.5 1.5
1.0 1.0
0.5 0.5
0.0 0.0
-0.5 -0.5
-1.0 -1.0
-1.5 -1.5
-2.0 -2.0
-2.5 -2.5
Singapore Czech Slovak Hungary Poland Moldova Somalia Finland - Hungary Slovak Poland Czech Moldova Somalia
- the best Republic Republic - the worst
performer performer
the best
performer
Republic Republic - the worst
performer 28
Czech Republic Hungary
1.20 Voice and 1.40 Voice and
Accountability Accountability
1.00 Political Stability and 1.20 Political Stability and
Absence of Violence Absence of Violence
0.80 Government 1.00 Government
Effectiveness Effectiveness
0.60 0.80
Regulatory Quality Regulatory Quality

0.40 0.60
Rule of Law Rule of Law

0.20 0.40
Control of Corruption Control of Corruption
1996 1998 2000 2002 2004 2006 2008 1996 1998 2000 2002 2004 2006 2008

Moldova
0.20 Voice and
Accountability
0.00
Political Stability and
-0.20 Absence of Violence
-0.40 Government
Effectiveness
-0.60
Regulatory Quality
-0.80

-1.00 Rule of Law

-1.20
Control of Corruption
1996 1998 2000 2002 2004 2006 2008

Poland Slovak Republic


1.20 Voice and 1.20 Voice and
Accountability Accountability
1.00
1.00 Political Stability and Political Stability and
Absence of Violence 0.80 Absence of Violence
0.80 Government 0.60 Government
Effectiveness Effectiveness
0.60 0.40
Regulatory Quality Regulatory Quality
0.20
0.40
Rule of Law 0.00 Rule of Law

0.20 -0.20
1996 1998 2000 2002 2004 2006 2008
Control of Corruption
1996 1998 2000 2002 2004 2006 2008 29
Control of Corruption
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WGA overall mean scores 2001 and 2006 by country
180

144

108

72

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Argentina Bulgaria Indonesia Kyrgyzstan Mongolia Namibia Palestine Peru Trinidad Uganda
and Tobago

2001 2006

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