Governance: An Overview

UNIT 1 GOVERNANCE: AN OVERVIEW

Structures
1.1 Introduction
1.2 Governance: Concept and Importance
1.3 Formal and Informal Governance Systems
1.4 Types of Governance
1.5 Good Governance
1.6 Challenges of Good Governance
1.7 Governance and Development
1.8 Let Us Sum Up
1.9 References and Suggested Readings
1.10 Check Your Progress – Possible Answers

1.1 INTRODUCTION
The concept of “governance” is as old as the concept of a state or the existence
of a monarch. In other words, it is as old as human civilization. The meaning of
governance can be understood differently in terms of context and space, however,
the most commonly understood meaning is - the process of decision-making and
the process by which decisions are implemented (or not implemented).
Governance can be used in several contexts such as corporate governance,
international governance, national governance, local governance and
environmental governance. Since governance is the process of decision-making
and the process by which decisions are implemented, an analysis of governance
focuses on the formal and informal actors involved in decision-making and
implementing the decisions made and the formal and informal structures that
have been set in place to arrive at and implement the decision.

Government is one of the actors in governance, and the other actors involved in
governance vary depending on the level of government that is under discussion.
In rural areas, for example, other actors may include influential land lords,
associations of peasant farmers, cooperatives, NGOs, research institutes, religious
leaders, finance institutions political parties, the military etc. The situation in
urban areas is much more complex as the interconnections between actors
involved in urban governance are more diversified. At the national level, in
addition to the above actors, media, lobbyists, international donors, multi-national
corporations, etc. may play a role in decision-making or in influencing the
decision-making process. All actors other than government and the military are
grouped together as part of the “civil society.” In some countries in addition to
the civil society, organized crime syndicates also influence decision-making,
particularly in urban areas and at the national level. Similarly, formal government
structures are other means by which decisions are arrived at and implemented.
At the national level, informal decision-making structures, such as “kitchen
cabinets” or informal advisors may exist. In urban areas, organized crime
syndicates such as the “land/builder mafia” may influence decision-making. In
some rural areas locally powerful families may make or influence decision-making
at village level. 5
Urban Governance The thrust of this unit is to analyze the genesis and concept of urban governance
evolving to meet the various goals of development, and meet the social
requirements of urban population. As a process, governance may operate in an
organization of any size: from a single human being to all of humanity; and it
may function for any purpose, good or evil, for profit or not. Perhaps, the moral
and natural purpose of governance consists of assuring, on behalf of those
governed, a worthy pattern of ‘good’ while avoiding an undesirable pattern of
‘bad’. The ideal purpose, obviously, would assure a perfect pattern of good with
no bad. A reasonable or rational purpose of governance might aim to assure,
(sometimes on behalf of others) that an organization produces a worthwhile
pattern of good results while avoiding an undesirable pattern of bad circumstances.
After studying this unit, you would be able to:
• understand the evolution of the concepts of governance in urban areas;
• describe the types of governance;
• explain the scope and purpose of governance;
• distinguish between centralized and decentralized, and formal and informal
governance systems;
• analyze challenges and attributes of good urban governance.

1.2 GOVERNANCE: CONCEPT AND

IMPORTANCE
Governance is a concept which is used in different meanings in different contexts;
it varies from narrow structural definition of its management of public affairs by
government constituents i.e., legislation, executive and judiciary, to the processes
that ensure deliveries, participation, justice, respect of rights, innovation and
networking. The term ‘governance’, is derived from the Greek term, kubernao,
which means ‘to steer’. So, governance is the process that steers affairs of the
State. In ancient times, the Greek philosopher, Plato used the term, governance,
in reference to the affairs of the state. The term came into the limelight with the
publication of the World Bank’s report on sub Sahara in 1989. The report said
that development initiatives taken up by the World Bank had not been able to
produce the desired development benefits due to the weak role of the state, and
its ineffective institutions. Summarizing this problem, the World Bank report
coined the term ‘crisis of governance’. Thus, the focus was cast on improving
governance by improving managerial and administrative competencies.
The World Bank defines governance as, ‘the exercise of political authority, and
the use of institutional resources to manage the society’s problems and affairs.’
The World Bank interprets governance as the institutional capacity of public
organizations to provide public and other goods demanded by a country’s citizens
in an effective, transparent, impartial, and accountable manner, subject to resource
constraints. The World Bank has further defined that ‘Governance’ in general,
has three distinct aspects: (a) the form of a political regime; (b) the processes by
which authority is exercised in the management of a country’s economic and
social resources; (c) the capacity of governments to design, formulate; and (d)
implement policies, and, in general, to discharge governmental functions.
Further, in literature the use of ‘Governance’ can be distinguished in seven
6 different uses under different settings:
• as corporate governance, relating to companies; Governance: An Overview

• as the New Public Management;

• as ‘good governance’;
• as international interdependence generating new modes of governing;
• as a ‘socio-cybernetic system’, focusing on mechanism of coordination;
• as a way of governing through networks.
It is the last concept of governance together with new public management
concerned with public/development policies of nations and cities that is of concern
here.
The main elements of governance approach in such context essentially are:
• Its focus on the complexity of government i.e., multiple agencies, institutions
and systems linked complex patterns of interaction and marked by increasing
problems of coordination;
• the focus on alternatives to hierarchy
o identifying systems of rules
o identifying alternative organisational forms, notably networks;
• To be seen as a change, both in practice as well as theory.
The governance approach directs attention to these diverse bodies and the ways
in which they relate to one another and produce government. It is concerned
with organizational forms and the relationships between them – with networks
and networking – but also with the underlying structure of shared meaning and
values through which these relationships are sustained. It seeks to build an
understanding of the structures and practices which are there. Based on these
discussions, it can be said that governance means the process of decision making,
and the process by which the decisions are implemented, or even not implemented.
Over a last decade, the concept of governance has undergone change. It has
included a few elements like accountability, transparency, and effectiveness into
its broad contours. It has led to the emergence of a new aspect of governance,
which is termed, good governance.

After reading this section, you will have gained an idea about the ‘governance’.
Now you should be able to answer the questions given in Check Your
Progress 1.

Check Your Progress 1

Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What do understand by Governance? What does the term mean?
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Urban Governance 2) What is good governance?
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1.3 FORMAL AND INFORMAL GOVERNANCE

SYSTEMS
All nations have both formal and informal governance systems—that is, systems
within which citizens and government officials interact. Governance involves
both public decision-making and public administration. The formal systems are
embodied in constitutions, commercial codes, administrative regulations and
laws, civil service procedures, judicial structures, and so on. Their features are
readily observable through written documents, physical structures (e.g., ministry
buildings, legislatures, courthouses), and public events (e.g., elections,
parliamentary hearings, state-of-the-union addresses, city council meetings, legal
proceedings). The informal systems, by contrast, are based on implicit and
unwritten understandings. They reflect socio-cultural norms and routines, and
underlying patterns of interactions among socioeconomic classes and ethnic
groups. Their manifestations are less easily noticed and identified. Thus,
governance systems have a dual character; formal and informal elements exist
side-by-side, and are intimately connected in diverse and not immediately obvious
ways. For instance, most of what we understand as corrupt practices in government
today result from the clash of uncertified activity with the lawful realm of
democratic politics and bureaucratic administration. It is customary and expected
in most societies for people to help friends and family members. Yet, the same
behavior is improper and, indeed, unlawful when it takes place within a rational-
legal civil service organization where appointments are supposed to be made on
merit (see McCourt 2000).

This institutional dualism has its roots in the historical evolution of social relations
between rulers and the ruled, from tribal chieftaincies, to kingdoms and empires,
to feudalism and the emergence of the nation-state. Yet, the changing blend of
formal and informal governance elements does not connote a continuum from
“traditional” to “modern.” No human society is so “advanced” that it relies
exclusively on formal de jure institutions to run its common affairs. Informal de
facto traditions and practices are constantly evolving and being adapted to new
circumstances. Those that live on usually do so because they provide some value
to people. They are functional in the jargon of social science—or else they would
disappear through disuse. One of the challenges of development is figuring out
how to separate the de facto governance institutions that serve, or at least do not
contradict, the majority’s needs and well-being, from similar-looking institutions
that block or even reverse improvements in social welfare.
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 Governance: An Overview
1.4 TYPES OF GOVERNANCE
Global Governance
Global governance or world governance is the political interaction of transnational
actors aimed at solving problems that affect more than one state or region when
there is no power of enforcing compliance. The modern question of world
governance exists in the context of globalization. In response to the acceleration
of interdependences on a worldwide scale, both between human societies and
between humankind and the biosphere, world governance designates regulations
intended for the global scale. The question of world governance did not arise
until the early 1990s. Up until then, the term “interdependence” had been used
to designate the management of relations among states. The post-Cold War world
of the 1990s saw a new paradigm emerge based on a number of issues:
• The growing importance of globalization as a significant theme and the
subsequent weakening of nation-states, pointing logically to the prospect of
transferring to the global level the regulatory instruments no longer working
effectively at the national or regional levels.
• An intensification of environmental concerns for the planet, which received
multilateral endorsement at the Rio Earth Summit (1992). The Summit
issues, relating to the climate and biodiversity, symbolized a new approach
that was soon to be expressed conceptually by the term Global Commons.
• The emergence of conflicts over standards: trade and the environment, trade
and social rights, trade and public health. These conflicts continued the
traditional debate over the social effects of macroeconomic stabilization
policies, and raised the question of arbitration among equally legitimate
objectives in a compartmentalized governance system where the major areas
of interdependence are each entrusted to a specialized international
institution. Although often limited in scope, these conflicts are nevertheless
symbolically powerful, as they raise the question of the principles and
institutions of arbitration.
• An increased questioning of international standards and institutions by
developing countries, which, having entered the global economy, find it
hard to accept that industrialized countries hold onto power and give
preference to their own interests. The challenge also comes from civil society,
which considers that the international governance system has become the
real seat of power and which rejects both its principles and procedures.
Although these two lines of criticism often have conflicting beliefs and
goals, they have been known to join in order to oppose the dominance of
developed countries and major institutions, as demonstrated symbolically
by the failure of the WTO 1999 Ministerial Conference in Seattle.

Corporate Governance
Corporate governance is a term that refers broadly to the rules, processes, or
laws by which businesses are operated, regulated, and controlled. The term can
refer to internal factors defined by the officers, stakeholders or constitution of a
corporation, as well as to external forces such as consumer groups, clients, and
government regulations. Well-defined and enforced corporate governance
provides a structure that, at least in theory, works for the benefit of everyone
9
Urban Governance concerned by ensuring that the enterprise adheres to accepted ethical standards
and best practices as well as to formal laws. To that end, organizations have been
formed at the regional, national, and global levels. In recent years, corporate
governance has received increased attention because of high-profile scandals
involving abuse of corporate power and, in some cases, alleged criminal activity
by corporate officers. An integral part of an effective corporate governance regime
includes provisions for civil or criminal prosecution of individuals who conduct
unethical or illegal acts in the name of the enterprise.

Corporate governance consists of the set of processes, customs, policies, laws

and institutions affecting the way people direct, administer or control a
corporation. Corporate governance also includes the relationships among the
many players involved (the stakeholders) and the corporate goals. The principal
players include the shareholders, management, and the board of directors. Other
stakeholders include employees, suppliers, customers, banks and other lenders,
regulators, the environment and the community at large. The first documented
use of the word “corporate governance” is by Richard Eells (1960) to denote
“the structure and functioning of the corporate polity”. The “corporate
government” concept itself is older and was already used in finance textbooks at
the beginning of the 20th century (Becht, Bolton, Röell, 2004). These origins
support a multiple constituency (stakeholder) definition of corporate governance.

Project Governance
Project governance is the management framework within which project decisions
are made. Project governance is a critical element of any project since while the
accountabilities and responsibilities associated with an organization’s business
as usual activities are laid down in their organizational governance arrangements,
seldom does an equivalent framework exist to govern the development of its
capital investments (projects). For instance, the organization chart provides a
good indication of who in the organization is responsible for any particular
operational activity the organization conducts. But unless an organization has
specifically developed a project governance policy, no such chart is likely to
exist for project development activity. Therefore, the role of project governance
is to provide a decision making framework that is logical, robust and repeatable
to govern an organization’s capital investments. In this way, an organization will
have a structured approach to conducting both its business as usual activities
and its business change, or project activities.

Information Technology Governance

Information Technology Governance is a term which has come into use in the
last few years to indicate the taking of a more formal, structured approach to the
role of Information Technology in large enterprises. The Information Technology
Governance movement arises from the perception that the corporate approach to
IT has, in the past, been too slapdash and informal. Major decisions with
substantial effects on the company’s future well-being have been left in the hands
of often fairly junior technical staff. At the same time, and perhaps as a
consequence, there has been a litany of horror stories related to major IT projects
which failed to live up to expectations, either not fulfilling the functionality
originally specified or running massively over budget in cost or time. Repeated
studies have shown that many IT projects fail and that a great deal of IT investment
is wasted. Statistics quoted in some research papers indicate that somewhere
10
between 20% and 40% of all money spent on IT projects is squandered. Globally, Governance: An Overview
this amounts to hundreds of billions of Euros per year. The goal of IT Governance
is to mitigate this waste and to help companies manage IT investments in such a
way that they produce real value for the business.

IT Governance primarily deals with connections between business focus and IT

management. The goal of clear governance is to assure the investment in IT
generate business value and mitigate the risks that are associated with IT projects.

Participatory Governance
Participatory Governance focuses on deepening democratic engagement through
the participation of citizens in the processes of governance with the state. The
idea is that citizens should play more direct roles in public decision-making or at
least engage more deeply with political issues. Government officials should also
be responsive to this kind of engagement. In practice, Participatory Governance
can supplement the roles of citizens as voters or as watchdogs through more
direct forms of involvement. The United Nations Development Programmes
(UNDP) defines governance as “governance is the exercise of economic, political
and administrative authority to manage a country’s affairs at all levels”. It
comprises mechanisms, processes and institutions, through which citizens and
groups articulate their interests, exercise their legal rights, meet their legal
obligations and mediate their differences”. Participation is taken as the pillar of
good governance. Public participation is a political principle recognized as a
right. Public participation seeks the involvement of those who are targeted as the
beneficiaries. Those are affected by decision needs to participate in the decision
making process. This implies that public contribution will influence the decision.
Public participation is regarded as the vital part of democratic process. The
participatory processes is seen as the facilitator of and inclusiveness shaped by
the desire to for the participation of the whole community or society. Public
participation is a part of people centered or human centric principles which have
emerged in culture over the last thirty years. This brings the issue of people first
paradigm shift. In this respect public participation may challenge the concept
that big is better and the logic of centralized hierarchy. It advances alternative
concepts of more heads are better than one and arguing that public participation
can sustain productive and durable change. Article 25 of the international covenant
on civil and political rights envisaged “every citizen shall have the rights and the
opportunity ….. to part in the conduct of public affairs, directly or through freely
chosen representatives…”

In some countries public participation is the central principle of making public

policy. Public participation is viewed as a tool intended to inform planning,
organizing and funding of activities. Public participation may be used measure
attainable objectives, evaluate impact and identify lessons for future practices.
The public participation in administrative rulemaking refers to the process by
which proposed rules are subject to public comment for specified period of time.
Public participation is typically mandatory for rules promulgated by executive
agencies of Indian government.

Non-Profit Governance
Non-profit governance focuses primarily on the fiduciary responsibility that a
board of trustees (sometimes called directors — the terms are interchangeable)
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Urban Governance has with respect to the exercise of authority over the explicit public trust that is
understood to exist between the mission of an organization and those whom the
organization serves.

Participation and Governance

In recent years loss of public trust in authorities and politicians has become a
widespread concern in many democratic societies. Public participation is regarded
as one of the potential solutions to the crisis in public trust and governance,
particularly in Europe, and other democracies. The idea is that public should be
involved more fully in the policy process in that authorities seek public views
and participation, instead of treating the public as simply passive recipients of
policy decisions. The underlying assumption by political theorists, social
commentators, and even politicians is that public participation increase public
trust in authorities, improving citizen political efficacy, enhancing democratic
ideals and even improving the quality of policy decisions. However, the assumed
benefits of public participation are yet to be confirmed.

1.5 GOOD GOVERNANCE

The structural definition of governance is sometimes not adequate, particularly
when the objective is to improve governance in new ways, which is touted as
‘good governance’. This concept of good governance caught the attention of
several nations and states – both developed and developing – and several
interpretative applications were made – notable among them are administrative
reforms, process re-engineering/ restructuring, decentralization of powers,
transparency and accountability mechanisms, and e-governance initiatives. From
a neo-liberal perspective (or, new public management school), good governance
means: less government (or, less regulation), more market (private provision of
services) and better policing (or, reducing scope for corruption). However, good
governance has to be directed not to less government, but to better connection –
within and between government and other bodies. Therefore, good governance
agenda directs attention away from the sub-division of authority and work towards
the accomplishment of outcomes.

The widely accepted notion about Good governance has eight major
characteristics, which has been depicted in figure 3.1. It is participatory, consensus
oriented, accountable, transparent, responsive, effective and efficient, equitable
and inclusive and follows the rule of law. It assures that corruption is minimized,
the views of minorities are taken into account and that the voices of the most
vulnerable in society are heard in decision-making. It is also responsive to the
present and future needs of society. It calls attention to questions of distribution
– not only of wealth but also of opportunities for the exercise of political
competence – both voice and choice. The UNDP (1997) defined following
principles associated with the concept of good governance, which are widely
accepted:
a) Participation
b) Rule of Law
c) Transparency
d) Responsiveness
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e) Consensus orientation Governance: An Overview

f) Equity, Efficiency and Effectiveness

g) Accountability
h) Strategic Vision

Fig. 3.1: Characteristics of good governance

Participation
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.

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.

Transparency
Transparency means that decisions taken and their enforcement are done in a
manner that follows rules and regulations. It also means that information is freely
available and directly accessible to those who will be affected by such decisions
and their enforcement. It also means that enough information is provided and
that it is provided in easily understandable forms and media.

Responsiveness
Good governance requires that institutions and processes try to serve all
stakeholders within a reasonable timeframe.

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
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Urban Governance 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.

Equity and inclusiveness

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.

Effectiveness and efficiency

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.

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.

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.

1.6 CHALLENGES OF GOOD GOVERNANCE

Some of the challenges of good governance are as follows:
• Securing freedom of information and expression
• Removal of arbitrariness in exercise of authority
• Use of I.T. base services to de-mystify procedures and improve the citizen-
government interface.
• Reducing cost of governance
• Eradication of corruption to re-establish credibility of government.
• Establishing legitimacy and credibility of institutions.
• Making every department result oriented.
Recounting its wide experience the World Bank Document narrates the challenges
of “good governance”. For instance despite technical soundness, programmes
and projects have often failed to produce desired results. Laws are not enforced
14
properly and there are often delays in implementation. Privatized production Governance: An Overview
and market led growth do not succeed unless investors face clears rules and
institutions. In the absence of proper accounting system budgetary policies cannot
be implemented of monitored. Many a time procurement system encourages
corruption and distorts public investment priorities. The failure to involve
beneficiaries and others affected in the design and implementation of projects
has often led to substantial erosion of their sustainability. Against this background
of mal-governance, the World Bank has attempted to focus on some of the key
dimensions of ‘good governance’ such as public sector management,
accountability, the legal framework for development and information and
transparency as stated earlier.

The World Bank has also identified a number of challenges of good governance,
which assumed significance for the developed and the developing countries.
These factors deal with political and administrative aspects, which are as follows.
• Political accountability including the acceptability of the political system
by the people and regular elections to legitimize the exercise of political
power.
• There should be freedom of associations and participation by various
religious, social, economic and cultural and professional groups in the process
of governance.
• An established legal framework based on the rule of law and independence
of judiciary to protect human rights, secure social justice and guard against
exploitation and abuse of power.
• Bureaucratic accountability ensuring a system to monitor and control the
performance of government offices and officials in relation to quality of
services, efficiency and misuse of discretionary power. The related
determinants include openness and transparency in administration.
• Freedom of information needed for formulation of public policies, decision-
making, monitoring and evaluation of good performance.
• A sound administrative system should lead to efficiency and effectiveness.
This in turn means the value for money and cost effectiveness.
• Lastly there is a greater need of cooperation among the government and
civil society organizations.

1.7 GOVERNANCE AND DEVELOPMENT

The recent understanding and emphasis of governance is more to achieve
development, and so there is more and more debate to enhance the empirical
understanding and relationship of governance and development. Now governance
is more viewed as a tool to achieve development, and is now regarded as two
sides of the same coin. There are enough examples to demonstrate how the term
development is closely related to the process of governance. Let us understand
this that every State in the world initiates a series of development activities in
order to bring about a positive change in the economy, society and the lives of its
citizens. In the entire process of development, the State has been playing a
dominant role. However, it has been observed that the benefits from the
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Urban Governance development initiatives have not produced desired effects and again it has failed
to bring about a positive change in the lives of the intended people. So, a basic
question regarding the role of the State and its efficiency has been raised. The
search for alternative mechanism to ensure development benefits to the people
has been on the agenda of policy makers. The recent arrangement of public-
private-partnership has emerged as the viable alternative in providing service
delivery in certain sectors of the economy. Thus, the basic approach to
development has undergone rapid changes in recent times.

In establishing the relationship between development and governance, the central

point that both the concepts aim at is the benefits to the citizens. Both concepts
have no meaning, if they do not serve to the benefits of the citizens. Moreover,
both the concepts are not detached from each other, rather they complement
each other. Development initiatives bear fruit with the presence of good
governance. Again, the good governance ensures participation of people in the
decision making related to development programmes. The participation of people
in development initiatives is truly the reflection of the empowerment of people.
Generally development implies the process of improving the standard of living
and well being of the citizens by raising the per capita income. Per capita income
is definitely the parameter of development, but at the same time how much benefit
has it provided to the common citizens in terms of availing basic elements of
life, like health, education etc. Thus development has transformed from a merely
economic term to a value loaded term; i.e. human development. So, based on the
performance on human development front, all countries are ranked which is
called the human development index. The famous Nobel laureate Prof. Amartya
Sen has contributed significantly towards changing the meaning of development
and making it a broad and inclusive concept. Prof. Amartya Sen argues that one
way of seeing development is in terms of expansion of the real freedoms that the
citizens enjoy to pursue the objectives they have reason to value, and in this
sense the expansion of human capability can be, broadly, seen as the central
feature of the process of development (Dreze and Sen, 1996).

The quality of governance relates to a great extent to the practice of domestic

politics and to public action. Looking at the functioning of the various democratic
countries, it can be said that the role of the public is not confined to influencing
or challenging the decisions of the government, rather to play a constructive and
definitive role in the socio-economic development of the society and reducing
social inequalities. Prof Amartya Sen argues that public action has the potential
of making a government really accountable and transparent (Dreze and Sen,
1996). As discussed earlier, accountability and transparency are the two key
components of good governance. Thus, governance can be ensured and
strengthened by public action or more involvement of people in the process of
governance. The role of the government is to build institutions to help facilitate
the involvement of people in the entire process of governance. The Government
of India’s initiative like 73rd and 74th amendments which provided constitutional
status to grass root institutions liken the panchayat and nagarpalika has been a
landmark achievement to ensure involvement of people in the process of
governance. Moreover, another significant step taken by the Government of India
to constitutionally ensure 50% seats reserved in panchayats for women is yet
another positive step to involve women in the process of governance. Since, the
people are directly involved with the governance, they have a definitive say in
the decision making process. This has also involved the people in the development
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process also. Having a say in the decision making process at the grass root level, Governance: An Overview
the people can themselves decide what kind of development they want and not
necessarily the development plan that used to be imposed from the higher ups. It
has also validated the argument that development and good governance are
mutually complimentary. Good governance facilitates development and in turn
development ensures the furtherance of good governance. The display of budget
allocation and how that amount has been utilized are regularly being publicized
by displaying at the public places and placing it in regular panchayat meetings.
As the common people get a concrete idea about the progress of development
initiatives at the local level, it brings in transparency and a sense of increased
accountability among the government officials. The awareness among the people
has brought a positive impact on the implementation of the development
initiatives. This can also be interpreted as public action as identified by Prof
Amartya Sen. This process has again gained strength with the enactment of the
Right to Information Act which has empowered the common citizen to ask for
any information from the officials. The enactment of Right to Information act,
constitutional guarantee to the grass root organization have resulted in bringing
the governance to the door step of the people. The participation of people has
also brought about a qualitative and significant change in the development process
and its impacts on the larger section of the society.

After reading this section, you will have gained an idea about godd governance.
Now you should be able to answer the questions given in Check Your
Progress 2.

Check Your Progress 2

Note: a) Write your answer in about 50 words.
b) Check your answer with possible answers given at the end of the unit
1) What are challenges of good governance?
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2) How governance and development are related and complementary?
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Urban Governance
1.8 LET US SUM UP
In this unit we have discussed the concept of Governance, its meaning and
attributes of governance in the first section. Later we explained the good
governance and at different challenges coming in the way of achieving good
governance. In continuing section we have discussed different reforms available
for achieving good governance and how these reforms leads to accountability
and transparency in administration. In second part we discussed types of
governance, what are its different forms and different sources. In continuation of
the section we have discussed in details about the urban governance.

1.9 REFERENCES AND SELECTED READINGS

Aziz, A. and Arnold D.D. (1996), Decentralised Governance in Asian Countries.
New Delhi, Sage Publications.
Bagchi, S. and S. Chattopadhyay (2004), Decentralised Urban Governance in
India: Implications for Financing Urban Infrastructure. Economic and Political
weekly, December 4.
Dreze, Jean and Amartya Sen, (1996), India, Economic Development and Social
Opportunity, Oxford University Press, New Delhi.
Oommen M.A. (2005), Twelfth Finance Commission and Local Bodies,
Economic and Political Weekly, May 15.
Mathur, Kuldeep (2009), From Government to Governance, National Book Trust,
New Delhi.
Mathur, O.P. (ed.) (1999) India: The Challenge of Urban Governance, National
Institute of Public Finance and Policy, New Delhi in collaboration with Centre
for Urban & Country Studies, University of Toronto. New Delhi: NIPFP.
Mohanty P.K. (1995): Reforming Municipal Finances: Some suggestions in the
context of India’s Decentralization Initiative, Urban India, Vol. XV (No.1),
January-June.
NIUA (1998); Project Development Experience in Urban Environmental
Infrastructure, Paper and Presentations at International Seminar, Compiled by
Jha Gangadhar, National Institute of Urban Affairs, New Delhi, Vol. I & II.
NIUA (2000) ‘Urban Statistics – Hand Book 2000, National Institute of Urban
Affairs, New Delhi.
Pierre, Jon (ed.) (2000), Debating Governance, Oxford University Press, Oxford.
World Bank (1992), Governance and Development, World Bank, Washington DC.

1.10 CHECK YOUR PROGRESS – POSSIBLE

ANSWERS
Check Your Progress 1
1) What do understand by Governance? What does the term mean?
Governance is the process that steers affairs of the State. In ancient times,
the Greek philosopher, Plato used the term, governance in reference to the
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 affairs of the state. The term came into the limelight with the publication of Governance: An Overview
the World Bank’s report on sub Sahara in 1989. Governance involves both
public decision making and public administration. The formal systems are
embodied in constitutions, commercial codes, administrative regulations
and laws, civil service procedures, judicial structures, and so on.
2) What is Good Governance? Write characteristics of good governance?
The widely accepted notion about Good governance has 8 major
characteristics. They are participatory, consensus oriented, accountable,
transparent, responsive, effective and efficient, equitable and inclusive and
follows the rule of law. It assures that corruption is minimized, the views of
minorities are taken into account and that the voices of the most vulnerable
in society are heard in decision-making.
Check Your Progress 2
1) What are challenges of good governance?
Some of the challenges of good governance are as follows:
• Securing freedom of information and expression
• Removal of arbitrariness in exercise of authority
• Use of I.T. base services to de-mystify procedures and improve the
citizen-government interface.
• Reducing cost of governance
• Eradication of corruption to re-establish credibility of government.
• Establishing legitimacy and credibility of institutions.
• Making every department result oriented.
2) How governance and development are related and complementary?
There are enough examples to demonstrate how the term development is
closely related to the process of governance. Let us understand this that
every State in the world initiates a series of development activities in order
to bring about a positive change in the economy, society and the lives of its
citizens. In the entire process of development the State has been playing a
dominant role. However, it has been observed that the benefits from the
development initiatives have not produced desired effects and again it has
failed to bring about a positive change in the lives of the intended people.
So, a basic question regarding the role of the State and its efficiency has
been raised.

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