governance in the new millenium: challenges for canada · governance in the new millenium :...

Governancein the New Millennium:Challenges for Canada

by

Tim Plumptre and John Graham

January 2000

Institute On Governance122 Clarence Street, Ottawa, Canada K1N 5P6

www.iog.ca

This study was made possible in part by financial supportfrom the

Policy Research Secretariat of the Government of Canada.

2000All rights reserved

Governancein the New Millenium:Challenges for Canada

ISBN 1-894443-04-7

Published and distributed by:

The Institute On GovernanceOttawa, Ontario, Canada

Phone: (1-613) 562-0090Fax: (1-613) 562-0097Web Site: www.iog.ca

Table of Contents

INTRODUCTION 1

GOVERNANCE AND GOVERNMENT 1

GOVERNANCE DEFINED 2

THE INSTITUTIONAL LANDSCAPE OF GOVERNANCE 4

GOVERNANCE AND GOVERNMENT INCAPACITY 6

THE IMPORTANCE OF CIVIL SOCIETY 6

WHERE GOVERNANCE OCCURS: THE ZONES OF GOVERNANCE 8

THE IMPORTANCE OF GOVERNANCE: CONTEXT AND OUTCOMES 9

GETTING TO GOOD GOVERNANCE 12

CONCLUSION 15

ANNEX 1VARIATIONS IN GOVERNANCE ARCHITECTURE

ANNEX 2THE IMPORTANCE OF CIVIL SOCIETY

ANNEX 3SOUND GOVERNANCE: A PERSPECTIVE FROM THE UNITED NATIONS

Governance in the New Millenium: Challenges for Canada 1Institute On Governance

Introduction

In one short decade, from about 1990 to 1999, the word “governance” has progressedfrom obscurity to widespread use. Why? This paper1seeks to answer this question. Itexplores the definition of governance, how governance differs from government, andwhy this distinction is important. The paper discusses differences in the institutionallandscape of governance in different countries. It points out how governance may comeinto play in instances of government incapacity or indifference, and discusses other areasor "zones" where the concept of governance is useful.

It also considers the concept of good governance, and discusses why this apparentlyinnocuous idea can be the source of controversy. It points out the difficulty of defininggood governance without reference to desired social and economic outcomes as well ascultural norms. Because of growing concerns related to Aboriginal governance inCanada, the paper draws some parallels and contrasts between Aboriginal ideas related togovernance and other traditions. It concludes by explaining why governance is an issuelikely to grow in significance, domestically and internationally, in the years ahead.

Governance and government

Not surprisingly, given its novelty, there are differences of view as to what governancemeans. Some use governance as a synonym for "government". This confusion of termscan have unfortunate consequences. For example, in a policy seminar attended by one ofthe co-authors of this paper, participants were exploring what should be done aboutcertain environmental problems facing Canada. It was agreed that the heart of the issuewas a problem of governance. In this discussion, however, "governance" and"government" were used interchangeably.

The consequence was that the environmental problems became defined implicitly as aconcern of “government”, with the corollary that the onus for fixing them necessarilyrested with government. The idea that there might be other ways of addressing theproblems, or that other sectors of society might take the initiative in dealing with them,was not considered. Thus, equating governance with government constrained the way inwhich the problems were conceived and put blinders around the range of strategies

1 An earlier version of this paper was discussed at a seminar co-sponsored by the Policy ResearchSecretariat of the federal government and the Institute On Governance (IOG) in the fall of 1999. The IOGis a not-for-profit think tank based in Ottawa, Canada. Other IOG publications may be accessed on theInternet at: www.iog.ca.

2 Governance in the New Millenium: Challenges for CanadaInstitute On Governance

available to deal with them. In short, confusion over terminology related to governancecan have important practical consequences: it may affect not only the definition of aproblem but also the analysis about how to resolve it.

The need for governance as a concept distinct from government began to manifest itselfwhen government became an organization apart from citizens rather than a process. Inancient Athens, reputedly the cradle of democracy, we are told citizens met in themarketplace to deal with issues of public concern. Government in such a setting wassimply the process for dealing with issues. Today, however, government is seldomdefined as a process; it is instead seen as an institution (or a set of institutions), one ofseveral societal players.2

Government became viewed as a discrete entity not only when it assumed an institutionalform, but also when representation became necessary. Without representation,government is us. Indeed, in some Aboriginal languages, the concept of governmentmeans "our way of life" or "our life"3. Representation is inevitable in large societies, butit is inevitably imperfect. Agents do not speak with the same authority as principals. Sowhen the activities of governments are directed by representatives rather than citizensthemselves acting in concert, they become something apart. Governance is about howgovernments and other societal organizations interact, how they relate to citizens, andhow decisions are made in an increasingly complex world.

To understand the idea of governance in a public setting, it is important to appreciate thatinterest in public issues is not confined to government. Other actors including the media,and in some societies, the military and religious organizations as well as businessorganizations, share an interest and sometimes a role in addressing public issues. Thislist of other actors also includes civil society—sometimes referred to as the non-profitsector—encompassing voluntary agencies and non-governmental organizations (NGOs).

Governance defined

Definitions of governance abound.4 Governance is not, in fact, a new word, but itsappearance in discussions about social organization is a recent development. It lacks a

2 For example, the Concise Oxford Dictionary defines government as the “form of organization of State” ora “body of successive bodies of persons governing a State; … an administration or Ministry.” (It alsodefines government as the “act, manner, or fact, of governing” and it employs an almost identical definitionfor governance (“act, manner, fact, or function, of governing; sway, control”.) No wonder the terms areconfused!)3 Royal Commission on Aboriginal Peoples, Restructuring the Relationship, Part One, CanadianCommunications Group, Ottawa, 1996, p.115.4 For a collection of some definitions, see Demers, Maurice, “La gouvernance de la governance: Faut-ilfreiner l’engouement?”, in Governance: Concepts and Applications, Corkery, Joan (ed.), with IIASWorking Group, International Institute for Administrative Studies, (Brussels, 1999), pp. 368-371.


satisfactory translation in many languages. However, its rapid progress intocontemporary English (and other languages including French) suggests there was a needfor a word of this kind.5

In 1999, an international symposium of about 20 academics and government officialstraced the roots of governance back to the 17th or 18th century in English, and collecteddefinitions from different sources which illustrated the progressive widening of itsmeaning. The group’s rapporteur noted, “The changed role of government and thechanged environment in which it has to discharge its role have brought governance intocommon usage as a process for which the word ‘government’ is no longer sufficient.”6

Most writers about governance agree it has to do with taking decisions about direction.One definition, attractively brief, is, "Governance is the art of steering societies andorganizations”. Proponents of this definition like to point to the roots of governance in aGreek word meaning “to steer”. However, some observers have expressed concern thatthis formulation has objectionable connotations of top-down direction. Certainly thisdefinition leaves moot the question of who is doing the steering. Some AboriginalCanadians see within this definition an implied neo-colonial set of values, in whichoutsiders think it is their job "to steer" First Nations.

Other observers see another difficulty with this definition. It seems to suggest thatgovernance is a straightforward process, akin to the task of the steersman in a boat.Governance, they suggest, is neither simple nor neat—by its nature it may be messy,tentative, unpredictable and fluid. It involves multiple actors, not a single helmsman.

An alternative definition for the public sector that may avoid these difficulties is thefollowing: "Governance is the process whereby, within accepted traditions andinstitutional frameworks, interests are articulated by different sectors of society, decisionsare taken, and decision-makers are held to account."7 While "government" is nowthought of as an institution, "governance" is seen by most observers as a process, and thisis perhaps where the fundamental difference between the two terms now lies.Governance is about the way in which power is exercised: who has influence, whodecides, and how decision-makers are held accountable. The concept may usefully be

5 A World Conference on Governance in Manila in June 1999 attracted over 850 participants fromcountries around the world. A study on the incidence of articles on governance in development literatureidentified that while at the start of the current decade, the subject received little attention, during the latteryears of the 90s there has been almost geometric growth in articles on this topic. (Unpublished literaturereview by Dr. Jay Gonzalez at National University of Singapore, 1999.)6 Corkery, Joan, “Introductory Report”, in Governance: Concepts and Applications, Corkery, Joan (ed.),with IIAS Working Group, International Institute for Administrative Studies, (Brussels, 1999), p.12.7 This formulation draws upon a definition proposed by Louise Fréchette, Deputy Secretary General of theUnited Nations: “Governance is the process through which ... institutions, businesses and citizens’ groupsarticulate their interests, exercise their rights and obligations and mediate their differences.” Speech tothe World Conference on Governance, Manila, May 31, 1999.


applied in different contexts—global, national, and local; societal and institutional—aswe see below.

The idea of governance as a process received particular attention at a seminar ongovernance co-hosted by the Canadian government’s Policy Research Secretariat and theInstitute On Governance in the fall of 1999. At this seminar, several participantsunderlined the mobile character of governance. Governance was described as not one, buta network of inter-related activities through which societies or communities articulatetheir interests and reach decisions.

The institutional landscape of governance

Understanding governance at the societal level is made easier if one considers thedifferent kinds of entities that occupy the social and economic landscape. Figure 1illustrates four sectors of society, situated among citizens at large: business, theinstitutions of civil society, government and the media.8 Their size as drawn here mayprovide a crude indication of their relative power in Canadian society. They overlapbecause the borders of these organizations are permeable.9

8 There are some complexities in defining these sectors, but they need not concern us here. For example,does government include state-owned corporations? What about partially owned corporations? Areteachers or schools part of government? With respect to civil society organizations: do they includeorganizations such as lobby groups whose goals are clearly commercial? Is an organization such as a aprofessional association for commercial entities a business entity or a not-for-profit? Where do labourunions fit? Is the Internet part of the media? And what is the appropriate definition of civil society itself?There are different points of view.9 For instance, government includes a component designated as “quasi-government”. This represents thehost of semi-governmental organizations that can be found in most jurisdictions: state-owned corporations

GOV’T

PRIVATE SECTOR

CIVIL SOCIETY

Figure 1

History Traditions

Culture

Technology

MEDIA


A similar illustration for another country could show a very different distribution ofpower. For example, the military or a political party, not illustrated here, might occupythe largest part of the terrain. Government’s role might be quite insignificant. In somesettings, multinational corporations might play a dominant role. (See Annex 1 forexamples of other institutional configurations.)

Helping to link the sectors, because it carries information from each to the other, and toand from citizens, are the media. Because the media can play a significant role inaccountability and in shaping perceptions of public policy, they clearly belong in anydiscussion of governance.

In Canada, and indeed in many other countries, the dynamics at work in this figure areconsiderable. Power is shifting across borders. The size of the private sector seems to beexpanding in many jurisdictions. Some functions previously carried out by the state arebeing transferred to business. For example, Canadian business entities are now runningmany airports and NavCan, a not-for-profit organization, operates the air navigationsystem. In at least one country, even customs operations, an important source ofgovernment revenues, have been turned over to the private sector. There are manysimilar examples.

Shifts are also under way in the sphere of civil society, although the pattern is less clear.In some jurisdictions, business is becoming more involved in the operation of some socialservices traditionally the realm of the voluntary sector—for example, the administrationof homes and services for elderly people. Reciprocally, through force of economicpressures, some non-profit organizations have had to become more entrepreneurial andbusiness-like in character. Some governments have spoken of the need to transferfunctions to the voluntary sector, expecting it to "take up the slack" as governmentwithdraws funding (as in the case of home care as an alternative to hospitalization).

The idea of governance makes it easier to have discussions about how communities orother social actors can take action in collaboration with, or perhaps independently of,established government structures to address issues of concern to citizens (communitygovernance). Governance also comes into play in circumstances of government failure orincapacity. That is, when governments lack the jurisdiction, capability or interest to dealwith a problem of public concern.

(or Crown corporations, as they are called in Canada), supervisory and regulatory boards, special taskforces and commissions, arm’s length agencies of various kinds, etc. In some countries, this component ofgovernment is larger than the main body of departments and ministries. This component shades into theprivate sector, since it typically involves various forms of joint ventures and partnerships with that sector.


Governance and government incapacity

Instances of government incapacity are not uncommon. Governments may not act on anissue due to lack of jurisdiction (e.g. global concerns like climate change, or lack ofclarity as to which level of government is responsible for an issue in a federal state).Incapacity may also arise because government lacks the skills, financial depth,administrative competence or flexibility to address the problem. Likewise, governmentmay be unwilling to address a politically sensitive question, preferring to live with acontentious problem rather than become embroiled in it (e.g. legislation on populationcontrol or abortion). More prosaically, incapacity may arise if government leadersbelieve an issue is too small to warrant their attention, or if they use their position toamass personal wealth, or to further other personal ambitions rather than the needs ofcitizens.

When government does not or cannot act, other actors may do so. Citizens may gettogether to clean up a neighbourhood. “Public interest partnerships” may bring citizens,government officials and business together—at the initiation of any of these players—toaddress some question of general concern. For example, a journalist in the Philippinesinitiated a project that started with children visiting the forest to learn about clean water.This initiative, which became known as the Baguio City Eco-Walk, developed into apartnership which involves hundreds of individuals, politicians and businesses, and whichis helping to re-establish the ecosystem of a threatened watershed area.

Today governments themselves are experimenting with partnership arrangements thatallow politicians and public servants to share power with other sectors of society. Thesearrangements evolve for various reasons. Some because it is recognized that each grouphas a special contribution to make on a complex question, and others for more prosaicreasons, such as government’s desire to get access to business capital. The prevalence ofsuch new institutional relationships is starting to raise questions about who shouldproperly be involved in what. For example, some voices are beginning to ask to whatextent government should form alliances with business in areas of general public interestsuch as education or health, and about the intrusion of private sector values into thesespheres—a classic example of a governance question.

The importance of civil society

The widespread use of partnerships between the public and voluntary sectors of societyhas led to a greater focus on voluntary and non-profit organizations by governments andthe academic community. (For purposes of this discussion, we are defining civil societyas “the activity of citizens in free association who lack the authority of the state …motivated by objectives other than profit-making although citizens may undertake


income-generating activity as a means of furthering their objectives.”10) In the UnitedKingdom, for example, the government has signed formal “Compacts” with civil societyorganizations to clarify roles and establish ongoing forums for communication.11 Judgingfrom the 1999 Speech From the Throne, the Canadian federal government appears to befollowing suit: “The Government will enter into a national accord with the voluntarysector, laying a new foundation for active partnership with voluntary organizations in theservice of Canadians.”12

Academic interest in the sector has been enhanced thanks to the work of RobertPutnam13, an American academic, who, based on extensive research in Italy, hasadvanced the thesis that sound government is due in large measure to a healthy voluntarysector. His argument can be summed up in the diagram below. (The Putnam thesis is setforth briefly in Annex 2 along with a summary of several dissenting views.) The call fora renewed spirit of voluntarism, implicit in the Putnam thesis, appears to have resonanceamong many Aboriginal people in Canada. For example, at a recent conference onAboriginal governance in urban settings held in Winnipeg in 1998, speaker after speakercalled for a return to voluntary activity in order to strengthen Aboriginal communities.14

Several empirical studies appear to support the Putnam arguments. For example, LisaYoung from the University of Alberta, using data from the 1999 Alberta Civil SocietySurvey, found the evidence generally supportive of the Putnam thesis at it relates to therelationship between civic engagement and higher levels of trust in government.15

Similarly, John Helliwell and Robert Putnam, working with Italian data, found the resultssupported the thesis that civic engagement led to higher economic performance.16

10 Swift, Jamie, Civil Society in Question, Between the Lines – South Asia Partnership, (Toronto, 1999),pages 4-5. An alternative but less specific formulation is, “The general name for the civic associations thatcitizens organize for social, charitable and political purposes.” Rheingold, Howard, “The NewInteractivism: A Manifesto for the Information Age”,http://www.voxcap.com/anon/c8368/ViewServlet?view=dka. baseline.view…:YsDYYYiHXib.11 The role of civil society is likewise said to be central in British policy vis-a-vis governance in developingcountries. "The promotion of good governance thus necessitates the careful assessment of how theimmense contribution of civil societies - and NGOs, in particular - needs to be integrated with that of theState." Speech by Andrew Goudie, Director, Department of International Development, March 25, 1998,http://www.oneworld.org/odi/speeches/goudie.html.12 Government of Canada, Speech from the Throne to open the Second Session of the Thirty-SixthParliament of Canada, October 12, 1999.13 There are others in addition to Putnam that make a case for the key role played by civil society.Benjamin Barber, for example, believes that civil society is an important mediating force in a democracy,helping to keep in check the power of the state and the private sector. See “A Place For Us: How to MakeSociety Civil and Democracy Strong”, Hill and Wang, (New York: 1998).14 Institute On Governance, Report on Completing the Circle: Aboriginal Governance in Urban Settings,1998.15 Young, Lisa, "Civic Engagement, Trust and Democracy: Evidence from Alberta," unpublished paperpresented to the Trends Seminar on Value Change and Governance, Toronto, Ontario, June 1999.16 Helliwell, John and Robert Putnam, “Economic Growth and Social Capital In Italy”, Eastern EconomicJournal, Volume 21, No. 3, Summer 1995.


Figure 2 – Making Democracy Work

Source: Putnam, Robert, Making Democracy Work: Civic Tradition in Modern Italy, Princeton,Princeton University Press, 1994.

Of the implications for the Putnam thesis, perhaps the most important relates to thequestion of capacity building for sound governance; any capacity building strategyshould include strong measures aimed at strengthening voluntarism. This in turnsuggests that a society without a strong voluntary tradition—such as in Russia under theSoviet regime—may take many years to create the conditions for a strong, stabledemocracy.

Where governance occurs: the zones of governance

In principle the concept of governance may be applied to any form of collective action.Governance is about the more strategic aspects of steering, that is, the larger decisionsabout both direction and roles. Governance is not only the process for determining whereto go, but is concerned with who should be involved in deciding, and in what capacity.There are three areas or zones where the concept is particularly relevant.

q Governance in "global space", or global governance, deals with issues outside thedirect purview of individual governments.

q Governance in "national space," or within a country. This is sometimes understoodas the exclusive preserve of government, of which there may be several levels:national, provincial or state, Aboriginal, urban or local. However, particularly at thecommunity level, governance is how other actors, such as civil society organizations,

Volunteerism& norms ofgeneralizedreciprocity

Social Capital

Social trust andcooperation

Better Government

§ more demandingcitizens

§ social infrastructure§ democratic values

Improved performance

of market economies


play a role in taking decisions on matters of public concern. Aboriginal governanceis an area of particular complexity because the challenge is to create "space" for newkind(s) of governments within fields of jurisdiction already occupied by national orprovincial government structures.

q Governance in "corporate" space, or corporate governance. This comprises theactivities of incorporated and non-incorporated organizations that are usuallyaccountable to a board of directors. Some such organizations will be privately ownedand operated, e.g. business corporations. Others may be publicly owned, e.g.hospitals, schools, government corporations. Governance issues here tend to beconcerned with the role of the board of directors, its relationship to top management(the CEO or executive director), and accountability to shareholders or stakeholders.

The importance of governance: context and outcomes

Governance is concerned with how power is exercised among the different sectors orinterests in society such that traditional freedoms may be enjoyed, commerce may occur,and the arts and culture may flourish. That is, governance is important in itself in that itprovides a context for the things which, as history demonstrates, people valueenormously. For instance, personal liberty and freedom of assembly, whether for social,commercial, religious or other purposes, must occur within some kind of overall socialframework such as the rule of law and a constitution. Context matters. Thus “goodgovernance”, which we discuss in more detail below, is to some degree an end in itself.

Governance is also about pathways to desired conditions or outcomes. Good governancemight be defined as a mode or model of governance that leads to the social and economicresults sought by citizens.

There seems to be a growing awareness that processes, institutional structures andrelationships, not only within government but between governments and other sectors ofsociety, may have a determining impact on outcomes. Furthermore, it is becoming morewidely appreciated that while government has an important influence on many matters ofpublic concern, it is only one among many. As issues become more complex and thelimitations of government more apparent, it is becoming clearer that governmentprograms are far from the sole determinants of social or economic conditions. At thesame time, many people are beginning to believe that important issues of public concern,such as environmental issues or the development of information and communicationstechnology, are too complex to be addressed by government acting alone. Distrust ofgovernment fuels this point of view. In Thailand, for example, important constitutionalchanges enacted in the 1990s were inspired by the belief that government needed tobecome more inclusive, and more effective at working in collaboration with citizens andother sectors of society.


In the world of international aid, there has been growing awareness of the significance ofinstitutional factors in influencing the course of development. For example, a landmarkstudy by the World Bank in 1998 noted that over the course of recent decades there hadbeen a depressingly negative correlation between aid and growth.17 Some countriesreceived substantial foreign aid and yet their incomes fell, while others received littleassistance and their incomes rose.

This study raised doubts about previous assumptions. These had held that injections ofcapital from abroad would be the main way of achieving significant social and economicbenefits in developing countries. The Bank study raised the possibility that factors otherthan money might play an important, if not a determining role, in the developmentprocess. Based on a growing body of research and evaluation, the World Bank andothers now judge that “poor countries have been held back not by a financing gap, but byan ‘institutions’ and ‘policy’ gap.”18

Figure 3 - Aid and growth in selected developing countries between 1970 and 1993.

John Kenneth Galbraith, the Canadian born economist, has also underlined theimportance of institutional factors in confronting the challenges of economicdevelopment:

17 Assessing Aid: What Works, What Doesn’t, and Why, Oxford University Press: New York, 1998, 35.18 Ibid, p. 33.

-8

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0 2 4 6 8 10 12 14 16

Aid as a percentage of GDP

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As we look at the achievements of the century, we must all pay tribute tothe end of colonialism. Too often, however, the end of colonialism hasalso meant the end of effective government. Particularly in Africa,colonialism frequently gave way to corrupt government or no governmentat all. Nothing so ensures hardship and suffering as the absence of aresponsible, effective, honest polity... Economic aid is important butwithout honest, competent government, it is of little consequence. Wehave here one of the major unfinished tasks of the century.19

The director of Britain's overseas aid agency, the Department for InternationalDevelopment, has argued that governance is of "fundamental importance" in improvingthe lot of poor people. “[T]here is an array of evidence that suggests that poor people areless able to avoid the adverse consequences of poor governance and therefore bear adisproportionate share of the ill effects of systems and structures of governance that donot reflect their interests.”20 He concludes, “There is … a very strong case, supportedboth by anecdotal and by more rigorous analytical work, that leads to the conclusion thatthere should be a concern to improve governance.”

Another important sphere in which to consider the relationship between institutionalfactors and development is provided by Aboriginal communities in North America.Research in this area was sparse until recently, when two American scholars, StephenCornell and Joseph Kalt, conducted an empirical study of American Indian Reservations.Their conclusions21 were in some regards similar to those of the World Bank. Accordingto these authors, three factors determine why some tribes develop while others do not:

q having the power to make decisions about their own future;

q exercising that power through effective institutions; and

q choosing the appropriate economic policies and projects.

In summary, there is growing evidence, first, that institutional factors have an importantbearing on social and economic conditions, and second, that achieving desirableconditions is dependent not only upon the technocratic capacity of government ministries,but also upon how governments relate to citizens, upon the vibrancy of civil society, and,in general, how different sectors in society interact to deal with issues of public concern.

19 Galbraith, John Kenneth, a lecture delivered at the London School of Economics, quoted in The Globeand Mail, July 6, 1999.20 Talk given at ODI, Wednesday 25 March 1998, http://www.oneworld.org/odi/speeches/goudie.html.21 Cornell, Stephen and Joseph P. Kalt, Reloading the Dice: Improving the Chances for EconomicDevelopment on American Indian Reservations, Harvard Project on American Indian Development, John F.Kennedy School of Government, Harvard University, March 1992.


Getting to good governance

Many writers think that governance itself has “no automatic normative connotation”22.However, some forms of governance are undoubtedly better than others, thus a literatureis growing up around the concept of good governance.

What constitutes good governance may appear non-controversial. To Western eyes, forexample, the following attributes might seem ones upon which there would be little causefor disagreement23:

q Constitutional legitimacyq Democratic electionsq Respect for human rightsq Rule of lawq Political opennessq Predictability and stability of

lawsq Tolerance, equityq Public participationq Public expenditures directed to

public purposes

q Judicial independenceq Transparencyq Absence of corruptionq Active independent mediaq Freedom of informationq Administrative competenceq Administrative neutrality:

merit-based public serviceq Accountability to public

interests on issues of publicconcern

However, despite their apparently anodyne character, attempts to apply these attributes ofgood governance to practical situations may well give rise to controversy, either becausethey conflict with each other, or because excessive emphasis on one may lead toundesirable results. For example, at some point stability ceases to be a virtue. It may beachieved at the price of needed change and of political freedom. Public participation isattractive in principle, but an excess may result in mass policy-making and in the takingof decisions by individuals with little knowledge and no accountability. Independentmedia unrestrained by any sense of public purpose or accountability may becomeirresponsible.

The emphasis given to different aspects of sound governance will vary in differentsettings because societies value outcomes differently. For example, in more utilitarianWestern cultures, great store may be placed on efficiency. Elsewhere, a desire forharmony and consensus may override this value. Similarly, some cultures will give

22 Corkery, op.cit., p. 15.23 Jacques Bourgault suggests the basic aspects of good governance comprise: (1) perception of thelegitimacy of power of the public authority, (2) citizens at the centre of decision-makers’ concerns, (3) a“society-centred programme” based on listening to citizens, and (4) rapid adaptability of publicadministration to citizens’ needs in dispensing public funds. See “Implications de la bonne gouvernance”in Governance: Concepts and Applications, Corkery, Joan (ed.), with IIAS Working Group, InternationalInstitute for Administrative Studies, (Brussels, 1999), p. 173.


primacy to individual rights whereas others will place more stress on communalobligations. Some will accord priority to the ‘objective’ application of the rule of law,while others may accord more weight to tradition and clan in decisions. Some societiesmay see economic growth as their primary goal while others may accord moreimportance to cultural richness and diversity.

The former Prime Minister of Thailand has defined good governance as "putting in placethe mechanisms to define what constitutes the public interest and seeing that publicinterest is served despite everything else."24 Different societies will approach thischallenge in different ways. Thus, determining what constitutes good governancecertainly leads toward debate on values and cultural norms, and on desired social andeconomic outcomes. This in turn leads into questions about the role of government, howgovernments should relate to citizens, relationships between legislative, executive andjudicial branches of government, and the roles of different sectors.

Another question related to the concept of good governance is whether differentapproaches to governance are suited to different stages of development. What is desirableunder some historical circumstances may be different from other such circumstances.For example, some critics view Singapore as a repressive society with excessivegovernment control; yet in 30 years Singapore’s level of economic and socialdevelopment has far surpassed that of many of more richly endowed developingcountries. The Prime Minister of Singapore has attributed much of the country’seconomic success and social stability to its governance policies.

On the issue of the importance of institutional factors, Andrew Goudie, the head ofBritain's development agency, argues that there is a strong link between civil liberties andgrowth. He also asserts, “[T]here is a considerable degree of correlation between levelsof corruption, the predictability of policy and the ability to establish property rights, onthe one hand, and the willingness to invest, on the other hand.”25

Discussions about good governance also raise questions about means and ends. Forexample, is democracy a means or an end? The American philosopher John Dewey hasargued that democracy is a way of life, not a way of government—a goal of government,rather than a kind of government.26

Certainly, for constructive discourse about good governance to take place, it is importantthat different traditions and values be accommodated. At the same time, all is notrelative. There are some universal norms or values that apply across cultural boundaries.The United Nations, for example, has published a list of characteristics of good

24 Panyarachun, Anand, The Tao of Development: Economic Management and Good Governance in Asia,17 February 1998. http://www.oneworld.org/odi/speeches/goudie.html.25 Goudie, op. cit..26 See Swift, op. cit., 14.


governance that shares some of the norms listed above, omits some, and inserts others.Specifically, the UN publication suggests that good governance comprises:

§ participation: providing all men and women with a voice in decision-making;§ transparency: built on the free flow of information;§ responsiveness: of institutions and processes to stakeholders;§ a consensus orientation: differing interests are mediated to reach a broad

consensus on what is in the general interest;§ equity: all men and women have opportunities to improve or maintain their well-

being;§ effectiveness and efficiency: processes and institutions produce results that meet

needs while making best use of resources;§ accountability: of decision-makers in government, the private sector and civil

society organizations; and§ a strategic vision: of leaders and the public on good governance and human

development, and of what is needed for such development. (See Annex 3 for amore complete text.)

Such a list provides a good starting point, but it is not enough. Why, for example, doconcepts such as judicial independence or human rights not figure in it? Given what oneauthor has described as the current fascination27 with governance, we need to movebeyond a simple description of what governance is, and to explore in more depth whatgood governance should mean in a Canadian, if not an international, context. Aparticularly relevant, and difficult question facing all Canadians, both native and non-native, is what good governance means when applied in an Aboriginal setting.

Outside this context, good governance also has a bearing on the question of government'srole in society and its relationship to other players. If we look back over the last fewdecades of government retrenchment, what we see in many jurisdictions is a fairlymindless application of the maxim that 'less government is better government'. Oneobserver has described this process as topiary without benefit of a design. A deepercomprehension of good governance could help governments and societies toward a betterunderstanding of how alternative institutional arrangements may affect the ability of asociety to achieve goals valued by citizens. (Health care and education are both fieldswhere this issue has currency in Canada.) It might likewise provide a road map—or, ifnot a map, at least a frame of reference—for future processes of institutional reform inthe public sector: a useful alternative to the crude, financially-driven down-sizing ofpublic institutions that has too-often been characterized as "reform" in recent years.

Finally, it should be noted that while government's role is clearly a central concern inconsideration of good governance, it is not the sole preoccupation. The other zones ofgovernance are likewise important. For example, standards of corporate governance in

27 Demers, Maurice, op.cit.


the private sector have an important bearing upon how societies function and the well-being of citizens. International norms for governance in this sphere have been evolvingfor years, and touch on such important issues as standards for financial reporting,transparency, lack of corruption, and accountability not only to shareholders but also tothe wider community. Similarly, civil society needs to be concerned about ensuring thelegitimacy and accountability of organizations in its domain. The concept of goodgovernance thus stretches broadly across all sectors of society, and imposes obligationsand challenges upon each component.

Conclusion

Governance opens new intellectual space. It provides a concept that allows us to discussthe role of government in coping with public issues and the contribution that otherplayers may make. It facilitates reflection on strategies that may be adopted by a societyin instances of government incapacity. It opens one’s mind to the possibility that groupsin society other than government (e.g. communities or civil society) may have to play astronger role in addressing problems. It is no accident that much of the discourse aboutgovernance is directed toward the subject of partnerships among different sectors ofsociety, and toward public participation in decision-making.

Finally, it invites us to consider to what extent the attainment of desired social andeconomic outcomes may depend upon governance arrangements, and to ask which kindsof arrangements result in what kinds of impacts. There is certainly no guarantee thatgovernance arrangements that worked, in some sense, in the last century, will beappropriate or even sustainable in the context of the kinds of social, technological,demographic and other trends with which countries will have to contend in the nextcentury.

Indeed, in Canada, there is troubling evidence that government, as an institution, is theobject of growing dissatisfaction, lack of interest and disaffection among citizens. Thistrend may also apply to Aboriginal communities as well. To date, this phenomenon hasattracted some interest among scholars, think-tanks and some government officials, but itappears to be little more than a small blip on the radar screen of politicians. Will this bethe case five or ten years from today? In the turbulent world of the next millennium,questions related to governance may prove to be among the most important challengeswe face.

Governance in the New Millenium: Challenges for CanadaInstitute On Governance

ANNEX 1

VARIATIONS INGOVERNANCE ARCHITECTURE

Governance arrangements may involve quite different types of architecture. Threescenarios will illustrate this point. Figure 1 shows what the institutional panorama mightlook like in a country where a military-business complex plays a paramount role (as is thecase in Pakistan, for example, where the military ousted the elected government in 1999),and where the media are weak and subservient to private interests. The domination ofpower by interests with little public accountability but with the underpinning of strongfamily and historical traditions would not conform to Western notions of goodgovernance, but might find more acceptance in some countries accustomed to suchtraditions.

Figure 2, on the next page, represents a somewhat different scenario, such as one mightfind in a so-called "transition" economy. Here, the private sector consists mostly of smallprivate shops and modest family-owned enterprises.

Figure 1

GOV’T

PRIVATE SECTOR

CivilSociety

MILITARYHisto

ry Traditions

Culture

technology


The institutions of governance related to the private sector, such as securitiescommissions, anti-monopoly or consumer protection laws, or effective frameworklegislation for business corporations are rudimentary or non-existent.

The landscape is dominated by large state-owned enterprises going through a state-controlled process of commercialization or privatization, as well as a powerful if perhapsrusty military machine closely linked to the government. Here too, the governancearrangements might not conform to Western standards, but for those in power in suchcountries, the controlled process of movement toward capitalism may appear farpreferable to the unbridled and selfish competition characterizing freer marketeconomies. (When some Vietnamese officials talk of their process of transition, forexample, they speak of a movement toward “equitization”, not privatization.)

While the previous two examples might illustrate the governance situation in existingcountries, figure 3 might represent a scenario toward which some jurisdictions may movein the future. In this case, the role of government has shrunk through consciousdismantling and through what former U.S. ambassador Harlan Cleveland has evocativelycalled the progressive ‘leakage’ of state power associated with globalization.

Figure 2

CivilSociety

MILITARY

COMMUNISTPARTY

PRIVATE SECTOR

GOV’T

History

Traditions

Culture

Technology


Following the logic of those who believe that the best government is the leastgovernment, government is now a relatively minor actor. The private sector plays adominant role in governance, linked to powerful media interests. (Some suggest that themedia increasingly play a determining role in shaping public perceptions of government.The recent film parody Wag the Dog carries this to an extreme.) Figure 3 raisesquestions about whether we have achieved the most robust governance architecture if theinstitutions, processes and traditions that determine how public issues are resolved arenow largely in the hands of private interests.

GOV’T

PRIVATE SECTOR

CIVIL SOCIETY

Figure 3

History Traditions

Culture

Technology

MEDIA


ANNEX 2

THE IMPORTANCE OF CIVIL SOCIETY

The Robert Putnam thesis

There is considerable evidence to suggest that citizens of western democracies havegrown increasingly disenchanted with the quality of their political leaders and democraticinstitutions. Based on his twenty-year study of political institutions and development inItaly, Robert Putnam has advanced an explanation for this phenomenon that has affectedall western countries. His thesis can be summarized in the following points:

q Citizens, acting in a voluntary capacity as members of church groups, sports clubs,neighbourhood associations, unions, political parties and political action groups,encourage social trust and co-operation—what he calls social capital. Norms of‘generalized reciprocity’ (e.g. I’ll rake my leaves knowing that my neighbours willdo the same) also contribute to the creation of social capital.

q Trust and co-operation tend to be self-reinforcing and cumulative. A "virtuous" circleresults in higher levels of co-operation, trust, reciprocity, civic engagement andcollective well-being.

q Conversely, the absence of these traits is also self-reinforcing; “defection, distrust,shirking, exploitation, isolation, and stagnation intensify one another in a suffocatingmiasma of vicious circles”.28

q Higher levels of trust and co-operation lead to better government. On the demandside, citizens in communities with such traits expect better government. On thesupply side, the performance of representative government is facilitated by the socialinfrastructure of civil society and the democratic values of citizens and officials.

q Similarly, the performance of market economies improves in societies with highlevels of co-operation and trust.

q Over the past several decades, voluntarism and other forms of civic engagement havedeclined significantly in the United States and other western countries. This declinehas been accompanied by the lowering of trust levels in government.

28 Putnam, Robert, Making Democracy Work: Civic Tradition In Modern Italy, Princeton, PrincetonUniversity Press, 1994, p. 177.


q The chief culprit for declining civic engagement is television: “there is reason tobelieve that deep-seated technological trends are radically ‘privatizing’ or‘individualizing’ our use of leisure time and thus disrupting many opportunities forsocial-capital formation. The most obvious and probably the most powerfulinstrument of this revolution is television.”29

The Putnam Thesis: Some Dissenting Voices

Putnam’s research conclusions have spawned many counter arguments30. Someexamples follow:

• Civic engagement has its dark side – the Ku Klux Klan and other racially-motivated hate groups are good examples;

• Voluntary associations may not be the only source of social capital;

• Television is not the culprit – it does not make us less trusting nor does itmake us withdraw from civic engagement;

• Individual attitudes and predispositions affect the formation of social capitaland its consequences; and,

• Materialistic values are the chief culprit of declining trust levels among youngpeople.

29 Putnam, Robert, “Bowling Alone: America’s Declining Social Capital”, Journal of Democracy, Volume6, Number 1, January 1995.30 See, for example, Political Psychology, Volume 19, No. 3, 1998; the entire issue is devoted to exploringsocial capital and the Putnam thesis.


ANNEX 3

SOUND GOVERNANCE:A PERSPECTIVE FROM THE UNITED NATIONS

Characteristics of Good Governance*

Participation – all men and women should have a voice in decision-making, eitherdirectly or through legitimate intermediate institutions that represent their intention. Suchbroad participation is built on freedom of association and speech, as well as capacities toparticipate constructively.

Rule of Law – legal frameworks should be fair and enforced impartially, particularly thelaws on human rights.

Transparency – transparency is built on the free flow of information. Processes,institutions and information are directly accessible to those concerned with them, andenough information is provided to understand and monitor them.

Responsiveness - institutions and processes try to serve all stakeholders.

Consensus orientation – good governance mediates differing interests to reach a broadconsensus on what is in the best interest of the group and, where possible, on policies andprocedures.

Equity – all men and women have opportunities to improve or maintain their well being.

Effectiveness and efficiency – processes and institutions produce results that meet needswhile making the best use of resources

Accountability – decision-makers in government, the private sector and civil societyorganizations are accountable to the public, as well as to institutional stakeholders. Thisaccountability differs depending on the organizations and whether the decision is internalor external.

Strategic vision – leaders and the public have a broad and long-term perspective on goodgovernance and human development, along with a sense of what is needed for suchdevelopment. There is also an understanding of the historical, cultural and socialcomplexities in which that perspective is grounded.

* Source: “Governance and Sustainable Human Development”, United NationsDevelopment Programme, 1997.

The Institute On Governance (IOG) is a non-profit organization founded in 1990 topromote effective governance. From our perspective, governance comprises thetraditions, institutions and processes that determine how power is exercised, howcitizens are given a voice, and how decisions are made on issues of public concern.

Our current activities fall within these themes: citizen participation; Aboriginalgovernance; building policy capacity; youth and governance; governance and thevoluntary sector; accountability and performance measurement; information &communications technology (ICT) and governance.

In pursuing these themes, we work in Canada and internationally. We provideadvice to public organizations on governance matters. We bring people together ina variety of settings, events and professional development activities to promotelearning and dialogue on governance issues. We undertake policy-relevantresearch, and publish results in the form of policy briefs and research papers.

You will find additional information on our themes and current activities on ourwebsite at www.iog.ca.

To contact the authors of this paper, email Tim Plumptre at [email protected] andJohn Graham at [email protected]

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