Governance Reforms from a Global Perspective Some Dimensions

Good governance is now at the very heart of economic growth. The received wisdom is that for growth and poverty reduction, we need physical and social capital, we need to focus on basic needs, and we need to yield to the market forces in a calibrated manner. They are all necessary, but not sufficient as experiences show. They will not yield results unless they are accompanied by good governance. Reforms to improve governance are all the more important in the lagging regions; otherwise, the disparities will only grow through time, and that could exacerbate social and political tensions to the point of threatening national unity. The present chapter attempts to reflect on the nexus between good governance and economic development and on some essential characteristics of good economic governance, and for the sake of clarity, it has grouped them under three heads: rule of law; accountability for actions and results; and combating corruption. Considering only governance in its economic aspect, it also reveals how some simple and basic ideas from economic theory give useful suggestions for the reform of economic governance.