Governance has been defined to refer to structures and processes that are designed to ensure accountability, transparency, responsiveness, rule of law, stability, equity and inclusiveness, empowerment, and broad-based participation. Governance also represents the norms, values and rules of the game through which public affairs are managed in a manner that is transparent, participatory, inclusive and responsive. Governance therefore can be subtle and may not be easily observable. In a broad sense, governance is about the culture and institutional environment in which citizens and stakeholders interact among themselves and participate in public affairs. It is more than the organs of the government.
International agencies such as UNDP, the World Bank, the OECD Development Assistance Committee (DAC) and others define governance as the exercise of authority or power in order to manage a country’s economic, political and administrative affairs. The 2009 Global Monitoring Report sees governance as ‘power relationships,’ ‘formal and informal processes of formulating policies and allocating resources,’ ‘processes of decision-making’ and ‘mechanisms for holding governments accountable.’
Often there is a tendency to equate governance with management, the latter primarily referring to the planning, implementation and monitoring functions in order to achieve pre-defined results. Management encompasses processes, structures and arrangements that are designed to mobilize and transform the available physical, human and financial resources to achieve concrete outcomes. Management refers to individuals or groups of people who are given the authority to achieve the desired results. Governance systems set the parameters under which management and administrative systems will operate. Governance is about how power is distributed and shared, how policies are formulated, priorities set and stakeholders made accountable. Table below summarizes the difference between governance and management:
| Governance |
Management |
|---|---|
|
- Set and norms, strategic vision and direction and formulate high-level goals and policies - Oversee management and organizational performance to ensure that the organization is working in the best interests of the public, and more specifically the stakeholders who are served by the organization’s mission - Direct and oversee the management to ensure that the organization is achieving the desired outcomes and to ensure that the organization is acting prudently, ethically and legally |
- Run the organization in line with the broad goals and direction set by the governing body - Implement the decisions within the context of the mission and strategic vision - Make operational decisions and policies, keep the governance bodies informed and educated - Be responsive to requests for additional information
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In the development literature, the term ‘good governance’ is frequently used. In particular, the donors promote the notion of ‘good governance’ as a necessary pre-condition for creating an enabling environment for poverty reduction and sustainable human development. Good governance has also been accepted as one of the targets of the Millennium Development Goals (MDGs). The good governance agenda stems from the donor concern with the effectiveness of the development efforts. Good governance is expected to be participatory, transparent, accountable, effective and equitable and promotes rule of law.
