Good governance means the absence of corruption, but it’s also more than that. It’s a concept used to describe a good way to take and implement government decisions. “Good” means according to the rule of law, consistent with human rights, transparent, efficient, equal for all, accountable and responsive to the people’s voice.
Major donors and international financial institutions are increasingly basing their aid and loans on the condition that the recipient countries reform their government systems so that these conform to the requirements of good governance.
Good governance is important for many reasons. Bad governance and corruption are causes of underdevelopment, poverty, war and human rights violations. The World Bank estimates that up to $1 trillion is paid in bribes every year. Imagine what could be done with that kind of money.
Here are some data showing the positive effect of good governance on economic growth and development:
This is data about the damage done by corruption, one indicator of bad governance:
Here’s another study pointing to the same conclusions:
Some of the graphs above use the CPI. More about that below.
Corruption does not only slow down economic development and per capita GDP growth – it’s a burden on the poor. Bribes put low income families under a lot of financial strain:
Rule of law, voice and accountability are other elements of good governance, and these are also correlated with development:
There is corruption everywhere in the world, but some countries perform better than others. This is the country ranking of the CPI (Corruption Perception Index of Transparency International) in 2007, just as an example (more up-to-date numbers are here):
High numbers indicate relatively less corruption, whereas lower numbers indicate relatively more corruption.
One in four people worldwide pay bribes for public services. The police are the most frequently bribed: 29% of those who come in contact with them pay something. People who run registries or dispense permits are the second-most bribed. Tax authorities receive backhanders from 4% of their customers. Generally those who earn less are more likely to have to pay bribes. This kind of everyday corruption is most prevalent in Liberia (source).
And these are the country rankings of the Global Integrity Report:
Civil Society, Media, and Public Access to Information
This category examines civil society organizations working on anti-corruption issues, the media’s effectiveness in reporting on corruption (including licensing requirements), and public access to information. Public access to government information remains the major weakness for most countries.
This category explores the existence and effectiveness of conflicts of interest regulations, “cooling off” periods for former government officials, and asset disclosure requirements in the executive, legislative, and judicial branches. Budget transparency is also assessed. This category contains an alarming concentration of problems for many countries assessed.
Administration and Civil Service
This category examines administration and civil service regulations, whistle-blower protections, and transparency around government procurement and privatization. The lack of effective whistle-blower protections continues to be a problem in many countries assessed.
Oversight and Regulation
This category assess the effectiveness of the national ombudsman (or equivalent mechanism), supreme audit institution, taxes and customs agencies, transparency surrounding state-owned enterprises, and business licensing requirements.
Anti-Corruption and Rule of Law
This final category examines a country’s anti-corruption laws, the country’s anti-corruption agency (or equivalent mechanism), citizen access to justice, and law enforcement accountability. Most countries have outstanding anti-corruption laws, but actual enforcement is another story.
Measuring government transparency is another way to measure good governance.
And, finally, you can just ask people to what extent they perceive corruption: