A Case for Governance

David Bargueno wrote “A Case for Governance” as part of the 2015 Humanity in Action Diplomacy and Diversity Fellowship. The research essay was first published in Shifting Paradigms (Humanity in Action Press 2016). The complete book is available for purchase on Amazon.

Governance Matters for Sustainable Development

The 70th United Nations General Assembly sent this message loud and clear on September 25, 2015, when 193 countries adopted the Sustainable Development Goals (SDGs) for 2016 until 2030. One of the goals, SDG 16, implores signatories to “promote peaceful and inclusive societies for sustainable development, provide access to justice for all, and build effective, accountable and inclusive institutions at all levels.” Measuring development requires asking tough questions about governance, inclusion, access to justice, and institutions.

This is good news. More than seven million people surveyed by the United Nations (UN) ranked an honest and responsive government as a top priority for development, and a World Economic Forum survey identified social corruption as a top issue across 67 countries. (1) Former Secretary-General of the UN Kofi Annan agreed: “Good governance is perhaps the single most important factor in eradicating poverty and promoting development.” (2) The UN High Level Panel of Eminent Persons, co-chaired by President Susilo Bambang Yudhoyono of Indonesia, President Ellen Johnson Sirleaf of Liberia, and Prime Minister David Cameron of the United Kingdom, argued that governance should be a stand-alone goal to accomplish “a fundamental shift: to recognize peace and good governance as core elements of wellbeing, not optional extras.” (3)

 The United States (US) government agreed in unequivocal terms. US Ambassador to the UN, Samantha Power, explained “all governments must work at building more just, inclusive, and transparent societies.” (4) In the most recent Quadrennial Development and Diplomacy Review of the US State Department, two of four strategic priorities highlight governance: inclusive economic growth and open democratic societies. Just as corruption, inequality, and unemployment undermine global stability, “Good governance underpins the long-term success of our foreign policy objectives.” (5)

Nevertheless, the SDG on governance stirs significant controversy. One reason is that the predecessor to these goals, the UN Millennium Development Goals (MDGs) for 2000 until 2015, did not identify governance as a separate goal or indicator. Instead, the eight MDGs focused on eradicating extreme poverty, which multilateral institutions then defined as those earning less than USD 1.25 per day (the benchmark increased to USD 1.90 in 2015).

Thanks in part to this clear metric, the MDGs played a role in improving the quality of life, even in the poorest, most fragile countries. Though the eight MDGs will not all be achieved by the time they expire this year, there are positive trend lines. (6) For example, the number of people living in extreme poverty fell by more than half, from 1.9 billion in 1990 to 836 million in 2015. (7) No country, except Syria, has a higher infant or child mortality rate today than before the MDGs were announced. (8) A child born today in one of the poorest nations will likely live longer than the wealthiest Americans lived a century ago.

Though scholars will continue to debate cause and effect between these statistics and the MDGs, the SDGs have now assumed the spotlight. Many argue that governance should be excluded from the development agenda altogether. Critics claim that, unlike the MDGs, the SDG on governance has neither a neat definition nor accepted metrics. Accordingly, the goal will remain a rhetorical aspiration, at best, or a distraction from addressing more urgent needs, at worst.

These critiques deserve a closer look, taking into account the context of and influences on the SDGs.

Sustainable Development is Political

One must remember the SDGs are the outcome of political negotiation, not consensus. (9) Since Rio+20, the 2012 Conference on Sustainable Development, the UN has conducted extensive consultations with governments, non-governmental organizations (NGOs), businesses, and scholars. In short, “the UN talked to everyone.” (10)

Over the past three years, advocacy groups have lobbied national governments and multilateral institutions to include governance as an SDG to take into account diverse interests in human rights, transparency, open government, anti-trafficking, and anti-money laundering. Moreover, representatives from over 70 countries comprised the UN’s “Intergovernmental Open Working Group,” tasked with compiling and updating drafts of the SDGs.

By contrast, a small team of technical experts drafted the eight MDGs in the basement of the UN headquarters in New York. (11) The process could be described neither as participatory nor representative, two critiques often leveled against global governance. For the international community, the 17 SDGs widen the aperture on development, as well as the means by which definitions of development may be decided.

In terms of both process and outcome, “the SDGs are a shift in the paradigm for international development,” according to Sarah Hearn of New York University’s Center on International Cooperation. She notes that “The MDGs were about resource transfer from rich countries. The SDGs are universal, they’re supposed to apply to all countries and try to overcome the ‘West lecturing the rest’ dynamic.” (12)

Through the twelve indicators listed below, the UN General Assembly identifies key ingredients of their recipe on governance. But they do not start from scratch. Rather, traces from many classic thinkers from the social sciences, often cited in the governance literature, appear throughout:

16.1: significantly reduce all forms of violence and related death rates everywhere;

16.2: end abuse, exploitation, trafficking and all forms of violence and torture against children;

16.3: promote the rule of law at the national and international levels, and ensure equal access to justice for all;

16.4: by 2030 significantly reduce illicit financial and arms flows, strengthen recovery and return of stolen assets, and combat all forms of organized crime;

16.5: substantially reduce corruption and bribery in all its forms

16.6: develop effective, accountable and transparent institutions at all levels;

16.7: ensure responsive, inclusive, participatory and representative decision-making at all levels;

16.8: broaden and strengthen the participation of developing countries in the institutions of global governance;

16.9: by 2030 provide legal identity for all including birth registration;

16.10: ensure public access to information and protect fundamental freedoms, in accordance with national legislation and international agreements;

16.11: strengthen relevant national institutions, including through international cooperation, for building capacities at all levels, in particular in developing countries, for preventing violence and combating terrorism and crime;

16.12: promote and enforce non-discriminatory laws and policies for sustainable development.

Insights from sociologist Max Weber, for instance, make early and repeated appearances, at least in terms of a state’s legitimate monopoly over the force of violence (in German: das Monopol legitimen physischen Zwanges). (13) In UN parlance, governance requires physical security – from arbitrary violence (indicator 1), abuse and exploitation (2), and organized crime (4). Without such security, improvements to maternal health and reduction of hunger may not be sustained in the long-term.

New institutional economics also surface in the indicators. Leading thinkers in this tradition include several Nobel Laureates, most notably Douglas North, Ronald Coase, Elinor Ostrom, and Oliver Williamson, who coined the phrase of “new institutional economics” in 1975. At its most basic, the central question of their research is one of political economy: how do institutions affect economic growth and development, and vice versa?

Institutions are “man-made constraints,” in the words of Douglas North, and the rules of the game structure human interaction and shape individual agency. Context-specific characteristics affect development outcomes, meaning not all institutions are created equal. For the UN, the most effective institutions for sustainable development may be described as accountable (6), responsive (7), and capable (11). Tellingly, these indicators mirror the governance characteristics the UK’s Department for International Development (DFID) identified in 2006. (14)

Another three indicators focus on law as a governance tool, which underscores the importance of state capacity. Focusing on administrative and legal capabilities, “a government’s ability to make and enforce rules and to deliver services,” echoes writings by political scientists Francis Fukuyama and Atul Kohli. (15) Fragile governments cannot promote the rule of law and access to justice (3), provide legal identities (9), or enforce non-discriminatory laws and policies (12). These are public goods, meaning that they would be poorly suited for private provision. No private company or foundation can replace the state.

Despite the rise of non-state actors in international affairs, SDG 16 focuses on nation-states as the primary determinant of governance. (16) Perhaps due to the fierce debate over including governance at all, the only indicator to explicitly mention governance expands the scale beyond the nation-state (8). Institutions of global governance are held up to scrutiny, with the goal of expanding the participation of developing countries therein. Representation matters for legitimacy, no matter the outcomes of said participation.

The responsiveness and accountability of governance at the local level is applied here to multilateral institutions, a significant development for former World Bank economist Joseph Stiglitz and Dean of the Blavatnik School of Government at Oxford University, Ngaire Woods. Stiglitz notes that “international institutions are supposed to reflect democratic principles,” as “traditional democratic principleswould suggest that [international institutions] look for the most qualified person, regardless of race, gender, or nationality.” (17)

In terms of process, Woods further bemoans how “parties not present at the negotiations may never find out why or how a particular decision came to be made, nor can they hold any particular parties responsible or accountable for those decisions.” (18) Her logic is that, by opening up “closed doors” of decision-making, multilateral institutions will mitigate such criticisms, address structural governance problems, and thereby improve outcomes-based performance. (19) The SDGs represent an important step in that direction.

Sustainable Development May – or May Not – be Measured

Fortunately, the SDG conversation has just begun. As the next step in the process, the UN Statistical Agency is leading a consultative process to develop results-driven numerical indicators for each of the twelve targets for governance, which will be finalized by March 2016. Regional and international organizations contribute as observers, while member states from every world region are represented on the Inter-Agency and Expert Group on Sustainable Development Goal Indicators.

Metrics are one of the most contested topics in the literature on governance, to the point that there are now over one hundred indexed projects and databases used to measure governance. Not surprisingly then, the governance goal boasts the dubitable distinction of having more indicators than any other SDG. A snapshot comparison of existing indicators reveals three broad criticisms, all of which focus on the impossibility of measuring progress toward SDG 16.

First, current practices for measuring governance privilege subjective, perception-based approaches. (20) Experts from risk-rating agencies, foreign investors, and NGOs report the de facto functioning of formal and informal rules. Surveys of national respondents help capture the views of those most affected by national institutions. Perceptions are, of course, riddled with observers’ biases and cannot decipher specific dimensions of governance. A rating agency, Standard & Poor, and citizens may evaluate governance more favorably when corruption is routinized, accepted as normal cost of business, rather than when an independent judiciary is more proactive – and high-profile – with successful prosecutions.

Second, those interested in legal capacity and bureaucratic and administrative quality can choose from a variety of subjective indicators to prove a point. Meanwhile, those interested in accountability may be harder pressed for data. Due to its geographic coverage, and its aggregation of ratings from over 30 organizations, the World Bank’s Worldwide Governance Indicators (WGI) is the most commonly cited, and criticized, database by academics and policymakers alike. (21) Half of the WGI indicators focus on a state’s legal and administrative capacity, not its responsiveness to the needs of citizens.

A third observation pertains to the limited coverage of existing governance indicators. Qualities of governance are notoriously unstable over time, even within the same country, which complicates any cross-national comparisons. Data available for Zambia may simply be absent for South Sudan. The quality of existing data is also questionable. (22) Many countries simply lack the resources (human and financial) to report on the implementation of 17 goals and 169 targets. Statistics for low-income countries may be neither standardized across countries nor cross-checked for biases by an auditor independent from the national government. Or the data could just be baked to protect naked self-interest.

The above critiques will help guide the conversation on the SDGs. One of the myriad instrumental values of the SDG on governance is how it inspires both reflection and strategy on measurement and comparison worldwide. While low-income countries may solicit greater support for underfunded and understaffed national statistics agencies to measure de facto and de jure governance, middle-and high-income countries may benefit from disaggregating and comparing the data from the national to the sub-national level. Even “second best,” subjective indicators on governance can help policymakers make and administer laws, justify accomplishment, and adjust political priorities. (23)

Including governance as an SDG increases pressure on governments, bureaucracies, professionals, researchers, and civil society to collect and report relevant data. This is the logic behind the World Development Report 2017, which will focus on governance and the law and, more specifically: “economic development and the quality of governance, and the persistence of gaps between intended governance reforms and the reality on the ground.” (24) More data could, potentially, improve actual governance.

Perfect cannot be the enemy of the good; current data limitations cannot justify eliminating governance indicators altogether. On the contrary, imperfections can inspire new partnerships, as well as innovations in science, technology, and data. One example is the “Global Partnership for Sustainable Development Data,” launched on the sidelines of the UN General Assembly. With representatives from over 70 countries, businesses, civil society organizations, and academics, the partnership connects data collectors with policymakers and equips them with the training and skills to use data for decision-making. (25)

Businesses are involved because of what has already been measured. The world’s largest corporate social responsibility initiative, the UN Global Compact, reported that global economic losses amounted to over USD 9.8 trillion last year due to violent conflict. (26) Moreover, estimates show that the cost of corruption surpasses 5% of global GDP (USD 2.6 trillion), with over one trillion USD paid in bribes each year. (27) “When there are higher levels of bribery, there is more poverty, so we know it has to be part of the SDGs,” said Craig Fagan, Transparency International’s Head of Global Policy. (28)

Another example comes from the Post-2015 Consensus project, which brings together economists, NGOs, international agencies, and businesses to identify the targets with the greatest cost-benefit ratio for the SDGs. After comparing social, economic, and environmental benefits of different targets, experts agreed one governance target inspired confidence: legal identities (9). Providing birth registration empowers citizens to claim property rights, open bank accounts, and exercise the right to vote. Elections, in turn, may be less prone to ballot stuffing. (29)

Taking a step back from regressions, many question the overuse of numerical metrics to judge human welfare. Early in 2008, on the verge of the global financial crisis, former French President Nicolas Sarkozy observed: “We have built a cult of data, and we are now enclosed within it.” (30) He commissioned an international panel of experts to find other ways to measure wellbeing, and their resulting report emphasized the importance of subjective indicators, including social connections and relationships and, tellingly, political systems.

Not surprisingly, one of the panelists was Nobel Laureate Amartya Sen, whose life’s work focuses on expanding the field of economics beyond material gain. With the capability approach, he argued a person’s capabilities, so their real opportunities to do and be what they have reason to value, should be of primary moral, political, and economic importance. His big idea is that development is freedom. Freedom, in turn, requires governance.

Beyond its instrumental values, governance cannot be separated from ethics, writ large. The capability approach and human development tradition underpin the SDG’s five overarching principles (people, planet, prosperity, peace, and partnership), thus expanding the meaning of progress beyond gross domestic product (GDP), purchasing power parity (PPP), and other monetary indicators of human welfare. None other than the Universal Declaration of Human Rights identified the fundamental freedoms and human rights underpinning human development.

Straying from this basic idea risks undermining, if not reversing, progress in agriculture, health, and the other metrics identified in the MDGs. As Tony Blair explained, “the lesson of the past 15 years is that defeating world poverty is not a hopeless cause. In the years to come, the SDGs can move the world further toward success – especially if these new goals are helped by a rigorous effort to strengthen governments’ ability to achieve them.” (31)

Data provides the tools to measure development, as well as possible options to move forward. But data should not be confused with development.

Looking Ahead

President Obama underscored the centrality of governance in his remarks to the UN General Assembly. He said:

“Number one, development is threatened by bad governance. Today, we affirm what we know to be true from decades of experience – development and economic growth that is truly sustainable and inclusive depends on governments and institutions that care about their people, that are accountable, that respect human rights and deliver justice for everybody and not just some.” (32)

Governance is a demand-side phenomenon. From New Delhi to Los Angeles, from São Paulo to Cape Town, citizens drive the push for more capable, accountable, and responsive governance. Precisely because citizens deserve clearer definitions and more empirical metrics, the international community must continue to work with national and local partners to refine the best recipe for governance.

For now, the SDGs should be commended for broadcasting a clear demand: Governance matters for sustainable development. 

 

•     •     • 

Disclaimer

The views expressed herein are those of the author alone and in no way constitute an endorsement, expressed or implied, by the United States Department of State.

Acknowledgements

The author and editor thank Dr. Deborah Brautigam, Megan Carroll, and Matthew Kustenbauder for their dedicated efforts in reviewing earlier versions of this article.

About the Author 

David Bargueño is a Foreign Service Officer with the US Department of State, currently serving as Vice Consul at the Consulate General of São Paulo, Brazil. His next assignment will be as a Political Officer in Karachi, Pakistan. He previously worked as a Presidential Management Fellow in the US Secretary of State’s Office of Global Food Security, where his portfolio focused on strategic partnerships with Brazil, India, and South Africa. His doctoral research at King’s College London focuses on governance in middle-income countries. Bargueño earned his MA from the Council on African Studies at Yale University and BA from the Woodrow Wilson School of Public and International Affairs at Princeton University.

Citation

Bargueno, David. “A Case for Governance." In Shifting Paradigms, edited by Johannes Lukas Gartner, 2-12. New York: Humanity in Action Press, 2016.

References

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2.  Rachel Gisselquist, “What does ‘good’ governance mean?”, UNU-WIDER WIDER Angle Newsletter, Feb. 9, 2012, accessed Sept. 30, 2015, http://unu.edu/publications/articles/what-does-good-governance-mean.html.

3.  UNEP, A New Global Partnership: Eradicate Poverty and Transform Economies Through Sustainable Development, the Report of the High-Level Panel of Eminent Persons on the Post-2015 Development Agenda (UNDESA, 2013), accessed Oct. 1, 2015, http://www.un.org/sg/management/pdf/HLP_P2015_Report.pdf. 

4.  Samantha Power, “Remarks at a Reception on the Eve of the UN Summit to Adopt the 2030 Agenda: Delivering on the Promise of Goal 16,” Sept. 25, 2015, accessed Nov. 4, 2015, http://usun.state.gov/remarks/6835.

5.  “The Quadrennial Development and Diplomacy Review,” US Department of State, accessed Sept. 30, 2015, http://www.state.gov/s/dmr/qddr/.

6.  Bill Gates, “My Bookshelf: Getting Better, Why Global Development is Succeeding,” gatesnotes, May 21, 2011, accessed Sept. 30, 2015, http://www.gatesnotes.com/Books/The-Real-Successes-of-Foreign-Aid.

7.  “MDG Success Springboard for New Sustainable Development Agenda: UN Report,” UN Sustainable Development Blog, July 6, 2015, accessed Sept. 30, 2015, http://www.un.org/sustainabledevelopment/blog/2015/07/mdg-2015-report/#prettyPhoto.

8.  World Health Organization, Fact Sheet No. 290: Millennium Development Goals (MDGs), last modified May 2015, accessed Oct. 1, 2015, http://www.who.int/gho/publications/world_health_statistics/2015/en/.

9.  Vinay Bhargava, “5 things you should know about governance as a proposed sustainable development goal,” People, Spaces, Deliberation, June 8, 2015, accessed Sept. 30, 2015, http://blogs.worldbank.org/publicsphere/5-things-you-should-know-about-governance-proposed-sustainable-development-goal.

10.  Bjørn Lomborg, “Unsustainable Development Goals,” Project Syndicate, Sept. 15, 2015, accessed Sept. 30, 2015, https://www.project-syndicate.org/commentary/unsustainable-development-goals-bybj-rn-lomborg-2015-09.

11.  Mark Tran, “Mark Malloch-Brown: Developing the MDGs was a bit like Nuclear Fusion,” The Guardian, Nov. 16, 2012, accessed Sept. 30, 2015, http://www.theguardian.com/globaldevelopment/2012/nov/16/mark-malloch-brown-mdgs-nuclear.

12.  Danielle Renwick, “CFR Backgrounder: Sustainable Development Goals,” Council on Foreign Relations, Sept. 28, 2015, accessed Oct. 1, 2015, http://www.cfr.org/global-governance/sustainable-developmentgoals/p37051

13.  Max Weber, Wirtschaft und Gesellschaft (1921), 29.

14.  To clarify some of the confusion over the concept, the United Kingdom’s Department for International Development (DFID) encouraged their governance advisors to think of governance as a: bundle of organizational attributes (capability); set of institutionalized relationships between actors (accountability); and type of behavior (responsiveness). Mick Moore and Graham Teskey, “The CAR Framework: Capability, Accountability, Responsiveness, What Do These Terms Mean, Individually and Collectively? A Discussion Note for DFID Governance and Conflict Advisors,” DFID, Oct. 29 2006, accessed Sept. 30, 2015, www2.ids.ac.uk/gdr/cfs/pdfs/CARframeworkDRCweb.pdf.

15.  Francis Fukuyama, Political Order and Political Decay: From the Industrial Revolution to the Globalization of Democracy (New York: Farrar, Straus, and Giroux, 2015). Francis Fukuyama, “What is Governance?” Governance, 26 (2013): 347-368. Atul Kohli, State-Directed Development: Political Power and Industrialization in the Global Periphery (Cambridge: Cambridge University Press, 2004).

16.  Moisés Naím, The End of Power: From Boardrooms to Battlefields and Churches to States, Why Being in Charge Isn’t What It Used to Be (New York: Basic Books, 2013).

17.  Joseph E. Stiglitz, “The Future of Global Governance,” Initiative for Policy Dialogue: IPD Working Paper, Sept. 24, 2004, 1-15.

18.  Ngaire Woods, Alexander Betts, Jochen Prantl, and Devi Sridhar, “Transforming Global Governance for the 21st Century,” UNDP-HDRO 2013.

19.  Should indicators for “good governance” differ for the supranational versus national contexts? Consistent with Ostrom et al. (1999), Woods writes: “ownership was high in most [Bank] programs achieving good results and low in ineffective programs, and was predictive of program success in 73% of all cases.” Ngaire Woods, “The Challenge of Good Governance for the World Bank and the IMF Themselves,” World Development 28, no. 5 (May 2000), 824, 832.

20.  A more objective approach to measuring governance evaluates “hard data,” such as documented historical proxies of political instability and violence (number of riots or political assassinations) or, alternatively, the existence and strength of certain formal de jure rules. At best, these kinds of indicators capture the outcomes of governance, not its qualities. Related complications with “objective data” arise with informal mechanisms, such as non-state authorities. Traditional chiefs, for example, may matter more for governance than whether citizens have the legal right to access the financial disclosure records of elected representatives.

21.  Other commonly cited indices include Transparency International’s Corruption Perceptions Index and Freedom House’s Freedom in the World, while related indices include the Human Development Index by the United Nations Development Program, the Global Peace Index, and the Legatum Index.

22.  See: Morton Jerven, Poor Numbers: How We Are Misled by African Development Statistics and What We Can Do About it (New York: Cornell University Press, 2013).

23.  In On Governance: What It is, What It Measures and Its Policy Uses (Waterloo, Canada: International Governance Innovation, 2015), Robert I. Rotberg and co-authors examine more than 90 governance indices and analyze best practices to suggest how policymakers can use governance theory and indices to improve both domestic and multilateral decision-making.

24.  “World Development Report 2017: Governance and Law,” World Bank, accessed Oct. 2, 2015, http://go.worldbank.org/LBM5VYIFI0.

25.  Catherine Cheney, “Who will lead development’s big data revolution?” Devex, Oct. 1, 2015, accessed Oct. 1, 2015, https://www.devex.com/news/who-will-lead-development-s-big-data-revolution-87023.

26.  Melissa Howell, “Peace,” United Nations Global Compact, accessed Oct. 3, 2015, https://www.unglobalcompact.org/what-is-gc/our-work/governance/peace.

27.  Daniel Runde, “It’s Time to Get Serious about Global Corruption,” Forbes, Jan. 22, 2015, accessed Oct. 2, 2015, http://www.forbes.com/sites/danielrunde/2015/01/22/time-to-get-serious-global-corruption/.

28.  “How can U.N. measure if better governance programs work?” Reuters, Jan. 21, 2015, accessed Mar. 22, 2016, http://www.reuters.com/article/us-un-corruption-goals-idUSKBN0KU2KC20150121.

29.  Martin Edwards, “Proposed SDG Governance Indicators: Rule of Law or Simply Rule,” Points of Order, Mar. 9, 2015, accessed Oct. 1, 2015, http://pointsoforder.org/2015/03/09/proposed-sdg-governanceindicators-rule-of-law-or-simply-rule/.

30.  Ben Hall, “Sarkozy Strives for Measure of Happiness,” Financial Times, Sept. 15, 2015, accessed Oct. 2, 2015, http://www.ft.com/intl/cms/s/0/26ea2978-a18f-11de-a88d-00144feabdc0. html#axzz3nXpHVADV.

31.  Tony Blair, “Sustainable Governance Goals,” Project Syndicate, Sept. 29, 2015, accessed Oct. 1, 2015, https://www.project-syndicate.org/commentary/sustainable-governance-goals-by-tony-blair-2015-09.

32.  The White House, “Remarks by the President on Sustainable Development Goals,” Briefing Room, Office of the Press Secretary, Sept. 27, 2015, accessed Oct. 1, 2015, https://www.whitehouse.gov/thepress-office/2015/09/27/remarks-president-sustainable-development-goals.

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