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 2
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 3
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 4
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 5
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 6
Dimensions of governance (WGI) Voice and Accountability Political Stability and Absence of Violence Government Effectiveness Regulatory Quality Rule of Law Control of Corruption 7
Arenas of governance (WGA) Civil society Political society Government Bureaucracy Economic society Judiciary 8
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) 9
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 10
World Governance Indicators (2) 35 data sources provided by 33 different organizations Some data sources: - Afrobarometer - Freedom House - Business Environment and Enterprise Performance Survey - WEF Global Competitiveness Survey - Bertelsmann Transformation Index - EBRD Transition Report - Heritage Foundation Index of Economic Freedom Etc. - Open Budget Index 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 13
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 14
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 nondisbursement of originally planned amounts In many cases, governments opt for imitation of governance reforms rather than introducing real, often politically-painful, reforms 15
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 16
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 17
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 donorrecipient relationships Non-governmental players have a crucial role in keeping governance issues really high on the development agenda 18
Thank you! 19
% GDP 35 Median size of government expenses 30 25 20 15 10 5 0 Top ten HDI HDI ranks 41-50 (EU NMS) HDI ranks 111-120 (some FSU) Bottom ten HDI Sources: HDR 2009, Worldwide Development Indicators 20
21
Voice and Accountability The extent to which a country's citizens are able to participate in selecting their government, as well as freedom of expression, freedom of association, and a free media 22
Political Stability and Absence of Violence Likelihood that the government will be destabilized or overthrown by unconstitutional or violent means 23
Government Effectiveness Quality of public services, the 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 24
Regulatory Quality Ability of the government to formulate and implement sound policies and regulations that permit and promote private sector development 25
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 26
Control of Corruption The extent to which public power is exercised for private gain, including both petty and grand forms of corruption, as well as "capture" of the state by elites and private interests 27
Voice and Accountability Regulatory Quality 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5 Norway - the best performer Czech Republic Hungary Slovak Republic Poland Moldova Myanma - the worst performer 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5-3.0 Hong Kong - the best performer Hungary Slovak Republic Czech Republic Poland Moldova Somalia - the worst performer 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5-3.0-3.5 Luxemburg - the best performer Political Stability and Absence of Violence Czech Republic Slovak Republic Poland Hungary Moldova Somalia - the worst performer 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5-3.0 Norway - the best performer Czech Republic Rule of Law Hungary Slovak Republic Poland Moldova Somalia - the worst performer Government Effectiveness Control of Corruption 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5 Singapore - the best performer Czech Republic Slovak Republic Hungary Poland Moldova Somalia - the worst performer 2.5 2.0 1.5 1.0 0.5 0.0-0.5-1.0-1.5-2.0-2.5 Finland - the best performer Hungary Slovak Republic Poland Czech Republic Moldova Somalia - the worst performer 28
Czech Republic Hungary 1.20 Voice and Accountability 1.40 Voice and Accountability 1.00 0.80 0.60 Political Stability and Absence of Violence Government Effectiveness Regulatory Quality 1.20 1.00 0.80 Political Stability and Absence of Violence Government Effectiveness Regulatory Quality 0.40 Rule of Law 0.60 Rule of Law 0.20 1996 1998 2000 2002 2004 2006 2008 Control of Corruption 0.40 1996 1998 2000 2002 2004 2006 2008 Control of Corruption 0.20 0.00-0.20-0.40-0.60-0.80-1.00-1.20 Moldova 1996 1998 2000 2002 2004 2006 2008 Voice and Accountability Political Stability and Absence of Violence Government Effectiveness Regulatory Quality Rule of Law Control of Corruption Poland Slovak Republic 1.20 1.00 0.80 0.60 0.40 Voice and Accountability Political Stability and Absence of Violence Government Effectiveness Regulatory Quality Rule of Law 1.20 1.00 0.80 0.60 0.40 0.20 0.00 Voice and Accountability Political Stability and Absence of Violence Government Effectiveness Regulatory Quality Rule of Law 0.20 1996 1998 2000 2002 2004 2006 2008 Control of Corruption -0.20 1996 1998 2000 2002 2004 2006 2008 29 Control of Corruption
30
180 WGA overall mean scores 2001 and 2006 by country 144 108 72 36 Argentina Bulgaria Indonesia Kyrgyzstan Mongolia Namibia Palestine Peru Trinidad and Tobago 2001 2006 Uganda 31