Governance is generally defined as “the manner in which the power is exercised in the administration and management of a country’s economic and social resources for growth and Development”.
It draws a clear distinction between the political and economic dimensions of good governance.
Three distinct aspects of governance are:
- It is a form of the political regime.
- With an intention for the development and growth of the country by way of management of a country’s economic and social resources, authority is exercised to ensure the same.
- It is the capacity of the government to design and implement policies.
- In its 1994 report “Governance: The World Bank’s Experience”, the progress made in this area is outlined under four different aspects:
- Public-sector management: It refers to changing the organisational structure of a sector agency with the purpose of reflecting new objectives, making budgets work better and ensuring the placement of public-enterprise managers under performance contracts.
- Accountability: The government and its employees should own up to the responsibility for their actions.
- Legal framework for development: This refers to the relevant legal systems that provide predictability and stability, which is crucial for creating an economic environment for business.
- Transparency and information: It reinforces accountability because access to information is essential for the various stakeholders to understand the government’s decision-making process.