QUEST FOR GOOD GOVERNANCE
Attaching conditions during the disbursing of aid, particularly by the World Bank (WB) and
the International Monetary Fund (IMF), is a long time practice in relation to developing
countries. At the beginning of 1980s, the International Development Agencies (IDA)
significantly tightened its policy lines by imposing the condition of public sector reforms as a
core element of its aid strategy. Pursuing the policy frontiers they started the Structural
Adjustment Program (SAP) across the developing countries to eradicate poverty through
maximum outcomes from development assistance (Villanger & Jerve 2003). The main aim of
the SAP was reforms, decentralization and deregulation of government policies and policymaking
processes for maximising usage of aid. But the SAP has been controversial. After
pursuing two decades of reforms, most of the developing countries in Africa, South Asia and
Latin America are left with weak, demoralised public sector institutions, growth of rampant
corruption and no significant economic development. It is recognised, even by the World
Bank, that SAP neither alleviates poverty nor even assured sustainable growth in the least
developed countries (Sobhan 2002). In the period of SAP (1980-88) East Asia sustained
annual growth in per capita GDP of 7 percent while sub-Saharan Africa and Latin America
respectively experienced decline of 2.4 and 0.7 percent (Squire 1991). Following the failure
of SAP good governance has become a popular word to the donors in development
discourses. From 1989, the international aid agencies and donor countries sought good
governance through people’s participation as an aid strategy. Mr. Kofi Annan, the then
Secretary General of the United Nations declared that ‘good governance is vital for the
protection of the rights of citizens and the advancement of economic and social development’
(Kim et al. 2005, p. 647). A research conducted by the World Bank has reported that a one
standard deviation increase of people’s participation in governance cause a 2½ fold increase
in per capita income, a 4 fold decrease in infant mortality and a 15 to 25 percent increase in
literacy (Kaufmann, Kraay & Lobaton 1999).