The purpose of governance is to protect and promote the well
being of citizens. Political authorities work together with
non-state actors to steer the rules for exercise of power, and
to guide the interactions between the state and citizens, civil
society and the private sector (Kjaer 2004; Kaufmann and
Kraay 2007; Brinkerhoff and Bossert 2008). When governance
works well, citizens are better able to achieve individual and
common purposes. But when governance is poor, even if a
country has financial resources and technical assistance, it may
fail to achieve development goals. For governance to work,
public organizations must have sufficient institutional capacity
to design and implement policies in ways that are ‘effective,
transparent, impartial and accountable’ (World Bank 2001). A
main channel to accomplish this is through reform of the
budgeting system.