We wish to thank all authors for their contributions to this volume and cooperation in expediting the editorial processes. We also thank the publishers and conference organizers for permitting us to include revised and updated versions of some papers in this book.

The idea of governance began to influence policy debates during the period of liberalizing market reforms in the 1980s. Margaret Thatcher and Ronald Reagan, in the United Kingdom and United States, respectively, sought to reorganize society and government around the principles and values of markets and private property. It was generally presumed then that such reforms would end problems of economic inefficiency, corruption and arbitrary rule in developing countries. In this context, governance was advanced as an alternative conception of authority expressed through institutions that would insulate markets from rent-seeking ‘distributional coalitions’ (Olson 1982). Nobel Laureate Douglass North’s (1981) discussion of the security of property rights from threats by the monarch or the state has also influenced the governance agenda. This emphasizes the role of institutions in providing checks and balances on the power of various organs of the state to ensure a stable, predictable and non-arbitrary state — a fundamental condition for spurring economic growth and prosperity. Thus, governance became a major concern of the Washington Consensus on development. Good governance should address market failures and ensure institutional reforms capable of making markets work better.

Conventional discussions of development tend to ignore the power of discourse and its role in the construction and maintenance of Western hegemony in the Third World. This chapter shows how development discourse has constructed the Third World as underdeveloped and thereby normalized and legitimized the right of the North to intervene in, control and develop the South. The focus is on the good governance agenda itself. The good governance discourse is merely the latest version of the ‘dream of development’, entitling the North to develop and democratize the South in its image. In this way, the chapter shows both how the international is always present in domestic politics and how many international interventions are sanctioned by development discourse’s representation of the Third World. Development discourse thus emerges as crucial to an understanding of development in Africa.

This chapter discusses some concerns regarding the current widespread use by donors of good governance in their approaches to reform-mongering and to aid conditionality. These include reflections based on experience with policy work over the past 45 years in a wide range of developing and transitional countries. For the purposes of this discussion, governance will be taken to mean the practices guiding the formulation, implementation and oversight of the programmes, policies and activities of organizations, and in particular, governments, and the development of appropriate institutions for effective development.

This chapter identifies and takes issue with a potentially troubling development in the study of comparative politics. While political scientists have traditionally deployed objective indicators of ‘political organization and administrative capacity’ (Reynolds 1983: 976), including tax ratios (Organski and Kugler 1980; Benson and Kugler 1998), tax structures (Kling 1959; Krasner 1985), political participation (Przeworski and Sprague 1971), and the nature and extent of public service provision (Migdal 1988; Putnam 1993), they are beginning to import subjective indicators of ‘governance’ from economics (Sandholtz and Gray 2003; Fish 2005; Gerring and Thacker 2005; Blake and Martin 2006; Cameron, Blanaru and Burns 2006). The customary distinction between objective and subjective measurement is, by now, less salient than the various differences among the subjective or ‘perceptions-based’ alternatives (Kaufmann, Kraay and Mastruzzi 2005a). Whose perceptions do they capture? Of which institutions or issue areas? And to what effect?

The past decades have witnessed the rise of a new development paradigmas academics and donors have embraced the idea that governance mattersto social, political and economic development. Political and administrativereforms in many countries are directly shaped by the scripts informinggood governance indicators. Countries apparently buy into the story that‘this is what good government looks like’.

Governance is widely considered the lynchpin in current internationaldevelopment strategy. While social science has always maintained thatgovernance (decision-making procedures and behavioural conventionsin formal public organizations) has consequences for the developmentalperformance of nation states, the contemporary official tenet is that ‘good’ (i.e. transparent, accountable, participatory) governance should beestablished and expanded everywhere to boost the tempo of development. Open civic institutions are seen as a catalyst because they create anenvironment that rewards honesty, hard work and entrepreneurship. Civic institutions that lack transparency, accountability and participationgenerate perverse incentives that are said to hold down economic growthand perpetuate poverty.

China and Vietnam are both transition economies ruled by Communist Parties. Both governments score poorly on ‘good governance’ indices whileexperiencing rapid economic development. While administrative reformhas been high on the agenda in both countries, the motives are unclearand the results mixed. Progress on issues such as anti-corruption, creationof a merit-based civil service and development of a service culture is disappointing.

The limitations of the good governance agenda are well reviewed in the rest of this book. The empirical relationship between improvements in the governance capabilities identified in the good governance agenda and the achievement of accelerated economic growth has not been established. There is a weak relationship identified in some regression exercises, but the strength of the relationship is weak at best. The arithmetic results suggest that the additional growth achievable through feasible improvements in good governance is limited. Deriving important policy conclusions from the results of weak multi-country regression results is also problematic for other reasons. For one thing, given the two-way causality that exists between good governance capabilities and economic growth, econometric tests are imperfect in identifying the strength of the relationship in one direction. More significantly, supporters of the good governance reform agenda have failed to identify convincing case studies of countries that actually made a significant economic transformation (from poverty to high standards of living), primarily by following the agenda that they propose. Even if we accept that achievable improvements in good governance capabilities in developing countries could result in some improvements in growth and development, this does not establish that these improvements will be sufficient for achieving a developmental transformation. The case study and statistical evidence actually supports the importance of governance, but suggests that a different set of governance capabilities were important. Countries that achieved significant developmental transitions in the past 50 years had strong governance capabilities, but none of them would have scored highly in terms of ‘good governance’ when their take-offs began or for a considerable period thereaft er. Rather, they had governance capabilities for addressing specific problems, such as overcoming constraints limiting technology acquisition, solving problems in allocating valuable resources such as land and maintaining political stability within tolerable limits. We describe these capabilities as developmental or growth-enhancing governance capabilities.