Good Governance

Good Governance and DINEKA JAYASOORIYA
Consultant-SLAS
Public Expectations SLIDA
M.A. (Public Economics) ICU-Tokyo

M.P.M. (Project Management) SLIDA
M.A. (Economics) Colombo
B.Com. (Sp.) 1st Class Hons. Kelaniya
1
Dineka Jayasooriya/Consultant/SLIDA
2
Governance
 Governance is "the process of decision-making

and the process by which decisions are
implemented (or not implemented)".
 The term governance can apply to corporate,

international, national, local governance or to
the interactions between other sectors of
society.
3
Good Governance
 The concept of "good governance" often emerges as a model to
compare ineffective economies or political bodies with viable
economies and political bodies.[
 The concept centers on the responsibility of governments and
governing bodies to meet the needs of the masses as opposed to
select groups in society.
 Because countries often described as "most successful" are
Western liberal democratic states, concentrated in Europe and
the Americas, good governance standards often measure other
state institutions against these states.
 Aid organizations and the authorities of developed countries
often will focus the meaning of "good governance" to a set of
requirements that conform to the organization's agenda,
making "good governance" imply many different things in many
different contexts.
4
Good Governance in International Affairs
 In international affairs, analysis of good governance can

look at any of the following relationships:
 Between governments and markets,
 Between governments and citizens,
 Between governments and the private or voluntary
sector,
 Between elected officials and appointed officials,
 The varying types of comparisons comprising the analysis

of governance in scholastic and practical discussion can
cause the meaning of "good governance" to vary greatly
from practitioner to practitioner.
5
Good Governance in Corporate Sectors
 In corporate affairs, good governance can be observed in

any of the following relationships:
 Between governance and corporate management
 Between governance and employee standards
 Between governance and corruption in the workplace
 The meaning of good governance in regards to corporate

sectors varies between actors. Legislation has been
enacted in an attempt to influence good governance in
corporate affairs.
6
Good Governance in Local Governments
 Good Governance is argued to be the most important in

local governments. It tries to promote more relationships
between government and
 Empowered citizens
 Neighborhood councils
 Community councils
 Good Governance with local government aims to increase

civil engagement with more members of the community in
order to get the best options that serves the people
7
Good Governance in Local Governments
 Good Governance is argued to be the most important in

local governments. It tries to promote more relationships
between government and
 Empowered citizens
 Neighborhood councils
 Community councils
 Good Governance with local government aims to increase

civil engagement with more members of the community in
order to get the best options that serves the people
8
Good Governance and IMF
 The International Monetary Fund (IMF) declared in 1996

that "promoting good governance in all its aspects,
including by ensuring the rule of law, improving the
efficiency and accountability of the public sector, and
tackling corruption, as essential elements of a framework
within which economies can prosper.”
 The IMF feels that corruption within economies is caused

by the ineffective governance of the economy, either too
much regulation or too little regulation.
 To receive loans from the IMF, countries must have certain

good governance policies, as determined by the IMF, in
place.
9
Good Governance and UN
 The United Nations is playing an

increasing role in Good Governance.
 According to former UN Secretary-General Kofi Annan,

“Good governance is ensuring respect for human rights
and the rule of law; strengthening democracy; promoting
transparency and capacity in public administration”.
 To implement this, the UN follows 8 characteristics.
10
8 Characteristics of Good Governance
Consensus Oriented
Participatory
Rule of Law
Effective and Efficient
Accountability
Transparency
Responsiveness
Equitable and Inclusive

11
1. Consensus Oriented
 A group decision-making process in which group members
develop, and agree to support, a decision in the best interest of
the whole.
 Consensus may be defined professionally as an acceptable
resolution, one that can be supported, even if not the "favorite"
of each individual.
 It has its origin in the Latin word cōnsēnsus (agreement), which
is from cōnsentiō meaning literally feel together.
 It is used to describe both the decision and the process of
reaching a decision. Consensus decision-making is thus
concerned with the process of deliberating and finalizing a
decision, and the social, economic, legal, environmental and
political effects of using this process.
12
1. Consensus Oriented
 There are several actors and as many view points in a given society.
Good governance requires mediation of the different interests in
society to reach a broad consensus in society on what is in the best
interest of the whole community and how this can be achieved.
 It also requires a broad and long-term perspective on what is needed
for sustainable human development and how to achieve the goals of
such development.
 This can only result from an understanding of the historical, cultural
and social contexts of a given society or community.
13
2. Participatory
 Participatory decision making is important where a large
number of stakeholders are involved from different walks
of life, coming together to make a decision which may
benefit everyone.
 Some examples are decisions for the environment, health
care, anti-animal cruelty and other similar situations. In
this case, everyone can be involved, from experts, NGOs,
government agencies, to volunteers and members of
public.
14
2. Participatory
 Participation by both men and women is a key cornerstone
of good governance.
 Participation could be either direct or through legitimate
intermediate institutions or representatives.
 It is important to point out that representative democracy
does not necessarily mean that the concerns of the most
vulnerable in society would be taken into consideration in
decision making.
 Participation needs to be informed and organized. This
means freedom of association and expression on the one
hand and an organized civil society on the other hand.
15
2. Participatory
 Participation can involve consultation in the development
of policies and decision-making, elections and other
democratic processes.
 Participation gives governments access to important

information about the needs and priorities of individuals,
communities and private businesses.
 Governments that involve the public, will be in a better

position to make good decisions, and decisions will enjoy
more support once taken.
16
3. Rule of Law
 The rule of law refers to the institutional process of setting,
interpreting and implementing laws and other regulations.
 It means that decisions taken by government must be
founded in law and that private firms and individuals are
protected from arbitrary decisions.
 It primarily refers to the influence and authority of law

within society, particularly as a constraint upon behavior,
including behavior of government officials.
 Rule of law implies that every citizen is subject to the law,
including law makers themselves.
17
3. Rule of Law
 Good governance requires fair legal frameworks that are
enforced impartially.
 It also requires full protection of human rights, particularly
those of minorities.
 Impartial enforcement of laws requires an independent
judiciary and an impartial and incorruptible police force.
18
4. Effective and Efficient
 Good governance means that processes and institutions

produce results that meet the needs of society while
making the best use of resources at their disposal.
 The concept of efficiency in the context of good governance
also covers the sustainable use of natural resources and

the protection of the environment.
19
5. Accountability
 Accountability is a key requirement of good governance.
 Not only governmental institutions but also the private
sector and civil society organizations must be accountable
to the public and to their institutional stakeholders.
 Who is accountable to whom varies depending on whether
decisions or actions taken are internal or external to an
organization or institution.
 In general an organization or an institution is accountable
to those who will be affected by its decisions or actions.
 Accountability cannot be enforced without transparency
and the rule of law.
20
5. Accountability
 Accountability can be both an end in itself representing
democratic values and a means towards the development
of more efficient and effective organizations.
 Politicians and public servants are given enormous power
through the laws and regulations they implement,
resources they control and the organizations they manage.
 Accountability is a key way to ensure that this power is
used appropriately and in accordance with the public
interest.
21
5. Accountability
 Accountability requires clarity about who is accountable to
whom for what and that civil servants, organizations and
politicians are held accountable for their decisions and
performance.
 Accountability can be strengthened through formal
reporting requirements and external scrutiny (such as an
independent Audit Office, Ombudsmen, etc.).
 Democratic accountability, as represented by
accountability of ministers to parliament and the
parliament to voters, can be seen as objective in itself, but
it also strengthens accountability in general.
22
6. Transparency
 Official business conducted in such a way that substantive and
procedural information is available to, and broadly
understandable by, people and groups in society, subject to
reasonable limits protecting security and privacy.
 Officials must make information available, and there must be
people and groups with reasons and opportunities to put
information to use.
 Chief among those are an independent judiciary and a free,
competitive, responsible press, but an active civil society is
critical too.
23
6. Transparency
 Rules and procedures must be open to scrutiny and comprehensible: a
transparent government makes it clear what is being done, how and
why actions take place, who is involved, and by what standards
decisions are made.
 Then, it demonstrates that it has abided by those standards.
 Transparency requires significant resources, may slow down
administrative procedures, and may offer more advantages to the well-
organized and influential interests than to others.
 It also has necessary limits: legitimate issues of security and the
privacy rights of citizens form two such boundaries. But without it,
“good governance” has little meaning.
24
7. Responsiveness
 Good governance requires that institutions and processes
try to serve all stakeholders within a reasonable

timeframe.
25
8. Equitable and Inclusive
 A society’s well being depends on ensuring that all its
members feel that they have a stake in it and do not feel

excluded from the mainstream of society.
 This requires all groups, but particularly the most
vulnerable, have opportunities to improve or maintain

their well being.
26
Good Governance and World Bank
 The World Bank is more concerned with the reform of

economic and social resource control. In 1992, it
underlined three aspects of society which they feel affect
the nature of a country's governance:
 type of political regime;
 process by which authority is exercised in the
management of the economic and social resources,
with a view to development; and
 capacity of governments to formulate policies and
have them effectively implemented.
27
Good Governance and World Bank
 Good governance defines an ideal which is difficult to

achieve in full, though it is something development
supporters consider donating to causes.
 Major donors and international financial institutions, like

the International Monetary Fund (IMF) or World Bank, are
basing their aid and loans on the condition that the
recipient undertake reforms ensuring good governance.
 This is mostly due to the close link between poor

governance and corruption.
28
Worldwide Governance Indicators
 The Worldwide Governance Indicators is a program funded

by the World Bank to measure the quality of governance of
over 200 countries.
 It uses six dimensions of governance for their
measurements;
 Voice & Accountability,
 Political Stability & Absence of Violence/Terrorism,
 Government Effectiveness,
 Regulatory Quality,
 Rule of Law, and
 Control of Corruption.
 They have been studying countries since 1996.
29
Worldwide Governance Indicators

 Australia
 Bangladesh
 China
 India
 Japan
 New Zealand
 Pakistan
 Singapore
 Sri Lanka
 Switzerland
 UK
 USA
30
Good Governance Guide for Public Sector

Agencies – PSC Australia
The Good governance guide is a valuable reference for

public sector employees with corporate governance
responsibilities to ensure that administration and
reporting obligations impacting on their agency are
identified and addressed.
There are nine governance principles contained in the

guide. Attention to these will assist your agency to have
appropriate systems and structures to meet
accountability obligations and achieve a high level of
organizational performance:
Dineka Jayasooriya/SLIDA
31
Principle 1: Government and Public Sector

Relationship
The organization's relationship with the government is

clear.
 Principle 1 is unique to the public sector and

fundamental to any democratic political system.
 Ensuring clear and transparent relationships between

the elected government and the bureaucracy is critical
to prevent any undue influence in the administration of
the public function and to ensure the swift and efficient
implementation of government policies and strategies.
32
Principle 2: Management and Oversight
The organization's management and oversight is

accountable and has clearly defined responsibilities.
 Well defined management responsibilities and

accountabilities, meaningful strategic plans and work
programs, and independent oversight are cornerstones
of governance in any type of organization.
 Principle 2 outlines how these concepts should be

translated into practice in the public sector
environment.
33
Principle 3: Organizational Structure
The organization’s structure serves its operations
 The quality of an organization's governance will

depend to a large part on whether its organizational
structure is suitable for what the organization was set
up to do.
 It should reflect the organization's main operational

objectives and do so in a coherent way while at the
same time being flexible enough to respond to changes
in the organization's strategy or mission.
34
Principle 4: Operations
The organization plans its operations to achieve its

goals.
 Operational planning is a key instrument to ensure

accountability of an organization and the effective and
efficient management and use of resources.
 It touches upon numerous aspects of governance and is

a key operational tool to increase compliance.
35
Principle 5: Ethics and Integrity
Ethics and integrity are embedded in the organization's

values and operations.
 Maintaining a workplace culture with strong ethics and

integrity is part of the governance framework and is
fundamental to good organizational performance.
 Public sector employees must operate with integrity

and maintain high standards of ethical conduct to
maintain sound decision making processes and ensure
community confidence and trust in the public sector.
36
Principle 6: People
The organization's leadership in people management

contributes to individual and organizational
achievements.
 In order to ensure effectiveness and efficiency of its

operations, it is important for an organization to have
effective systems for managing its workforce and
individual employees.
 This encompasses fair, transparent and equal treatment

of employees, as well as comprehensive strategies to
motivate and lead people and promote personal
development.
37
Principle 7: Finance
The organization safeguards financial integrity and

accountability.
 Sound financial management is critical to ensure

effectiveness in programs and services, accountability
and efficiency in the management of public resources.
 It is an essential element to sustain and improve good

governance.
38
Principle 8: Communication
The organization communicates with all parties in a

way that is accessible, open and responsive.
 Open, accurate and responsive communication is

essential to ensuring an organization’s accountability.
 Good communication is also fundamental to promote

citizens' trust in government.
39
Principle 9: Risk management
The organization identifies and manages its risks.
 Each organization has a distinct risk profile.
 Identifying its particular risk exposure and developing

and implementing risk prevention and remediation
plans is critical to ensure the organization can operate
effectively and efficiently to achieve its goals.
Conclusion…
From the above discussion it should be clear that good
governance is an ideal which is difficult to achieve in
its totality.
Very few countries and societies have come close to
achieving good governance in its totality.
However, to ensure sustainable human development,
actions must be taken to work towards this ideal with
the aim of making it a reality.
40
41
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Good Governance and DINEKA JAYASOORIYA

M.A. (Public Economics) ICU-Tokyo

 Governance is "the process of decision-making

 The term governance can apply to corporate,

Good Governance in International Affairs

 In international affairs, analysis of good governance can

 The varying types of comparisons comprising the analysis

Good Governance in Corporate Sectors

 In corporate affairs, good governance can be observed in

 The meaning of good governance in regards to corporate

Good Governance in Local Governments

 Good Governance is argued to be the most important in

 Good Governance with local government aims to increase

Good Governance in Local Governments

 Good Governance is argued to be the most important in

 Good Governance with local government aims to increase

Good Governance and IMF

 The International Monetary Fund (IMF) declared in 1996

 The IMF feels that corruption within economies is caused

 To receive loans from the IMF, countries must have certain

Good Governance and UN

 The United Nations is playing an

 According to former UN Secretary-General Kofi Annan,

 To implement this, the UN follows 8 characteristics.

8 Characteristics of Good Governance

Effective and Efficient

Equitable and Inclusive

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

 Participation gives governments access to important

 Governments that involve the public, will be in a better

8 Characteristics of Good Governance

 It primarily refers to the influence and authority of law

8 Characteristics of Good Governance

8 Characteristics of Good Governance

4. Effective and Efficient

 Good governance means that processes and institutions

 The concept of efficiency in the context of good governance

also covers the sustainable use of natural resources and

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

8 Characteristics of Good Governance

 Good governance requires that institutions and processes

try to serve all stakeholders within a reasonable

8 Characteristics of Good Governance

8. Equitable and Inclusive

 A society’s well being depends on ensuring that all its

members feel that they have a stake in it and do not feel

 This requires all groups, but particularly the most

vulnerable, have opportunities to improve or maintain

Good Governance and World Bank

 The World Bank is more concerned with the reform of

Good Governance and World Bank

 Good governance defines an ideal which is difficult to

 Major donors and international financial institutions, like

 This is mostly due to the close link between poor

Worldwide Governance Indicators