GOVERNANCE AND DEVELOPMENT1

Lesson 1
What is Governance?
Getting to a Definition
This is the first leg of the module on governance. In this module, the instructor provides a
practical introduction in the study of governance and development to analyze an array of
definitions and meaning of the concept of governance.
Later on, the students will be asked to crystallize their own notion of governance and how it may
be applied in the real world.
Specific Objectives
At the end of the lesson, the learners should be able to:
1. Explain the significance of the shift in how people and nations perceive governance and
how it differs from government;
2. Critically define the meaning of good governance.
3. Discuss the inter-relationship between the concept of governance and new public
management (NPM).
4. Comment on and criticize the meanings and implications of various definitions of
governance and develop your own definition of the concept of governance.
5. Trace the evolution of new public management which led to the definition of governance;
6. Synthesize the related and theoretically related concepts of governance.
7. Critique on the pervasive, shared and global perception of governance as propagated by
various institutions like the World Bank, ADB and United Nations.
8. Explain the relationship between governance & Sustainable Human Development
9. Discuss the art of governance and identify the activities encompassed in the act of
governing; and
10. Discuss the significance/essence of governance in the development process;

PEDAGOGICAL ACVITITIES:

(Note: The teacher has the discretion to apply any of the suggested teaching
strategies/methodologies/activities listed below.)

1. Semantic Mapping The students will be grouped into small groups and each will be asked
to come up with a semantic map on the generic concepts of governance.

1
Exclusively for BPA-ECGE 2A & 2B (Friday and Saturday) University of Caloocan City – Congressional North Campus
2. Multi-Media Presentation- A slide show on the evolution of how governance is perceived
and defined.

3. Brainstorming and Inter-active Discussions on the theories and evolution of governance.

4. A Panel discussion or an informal debate on the rationale of the course and on the
significance of governance and development.
5. Journey Wall/Wall of Wonder

The students are grouped into five. Each group selects a reporter and a secretary. Using the
Manila paper, the group members make a time line to represent the evolution of governance.
The members are required to jot down or draw ideas on the appropriate poster per significant
period. After which, the group members shall discuss the following:

1. Link between periods.

2. Importance of knowing the development of the idea of governance.
3. Implications of the events that happened.

6. Team-Oriented/Cooperative Learning

To facilitate greater interaction among students and to enhance team-oriented and

cooperative learning, students in the class will be grouped into teams of five. Though
significant amounts of class time will not be spent on team activities, the purpose of this
learning strategy is to allow for greater clarification, elaboration, and discussion of the
subject matter among team members and to minimize the impersonality of a large lecture
class setting. Frequent use of this learning strategy will lead to better understanding and
enjoyment of the subject matter as well. You will also develop some skills of team-work,
such as task focus, collaboration, listening, encouragement of each other, and sharing of
idea. Concept Paper: Each student is expected to provide one-page write-ups on concepts
discussed on lesson 1. This assignment would be most helpful if the student would submit
each concept page within a week of the concept’s discussion in class.

THE CONCEPT OF GOVERNANCE

In most dictionaries “government” and “governance” are interchangeably used, both

denoting the exercise of authority in an organization, institution or state. Government is the
name given to the entity exercising that authority. Authority can most simply define as
legitimate power. Whereas power is the ability to influence the behavior of others, authority
is the right to do so. Authority is therefore the based on an acknowledged duty to obey rather
than on any form of coercion or manipulation. Weber distinguished between three kinds of
authority, based on the different grounds upon obedience can be established; traditional
authority is rooted in history, charismatic authority stems from personality and legal-
authority is grounded in a set of impersonal rules. To study government is to study the
exercise of authority. (Heywood, 1997) Government is closely related to politics.

To study politics is in essence to study government or more broadly, to study the exercise of
authority. Politics is the art of government, the exercise of control within the society through
the making and enforcement of collective decisions. (Heywood 1997) The realm of politics
is restricted to state actors who are consciously motivated by ideological beliefs, and who
seek to advance them through membership of a formal organization such as a political
organization. This is the sense in which politicians are described as “political” whereas civil
servants are seen as “non-political”, the state as “public” and the civil society as “private”.
The institutions of the state (the apparatus of the government, the courts, the police, the
army, the society-security system and so forth) can be regarded as “public” in the sense that
they are responsible for the collective organization of the community life. Moreover, they are
funded at the public’s expense, out of taxation. In contrast, civil society consists of what
Raymund Burke called the little platoons, institutions such as the family and kinship groups,
private businesses, trade unions, clubs, community groups and so on that are private in the
sense that they are set up and funded by individual citizens. On the basis of this
public/private life division, government is restricted to the activities of the state itself and the
responsibilities which are properly exercised by public bodies. Although civil society can be
distinguished from the state, it nevertheless contains a range of institutions that are thought
as “public” in a wider access.

One of its crucial implications is that it broadens our notion of the government transferring
the economy in particular from the private to the public realm. Now, the conception of
politics and government move beyond the narrow realm of government to what is thought as
“public life” or “public affairs.” Since, the government doesn’t only decide for all and the
civil society and the private sectors play vital role in the community, thus, the conception of
the word “governance”. Governance is a broader term than government. In its widest sense,
it refers to the various ways in which social life is coordinated. Government can therefore be
seen as one of the institutions in governance; it is possible to have governance without
government. (Heywood, 1997)

Governance: Varying Definitions

Governance is:

1. “The traditions and institutions by which authority in a country is exercised” – Kaufman

et. al.
2. The way “… power is exercised through a country’s economic, political, and social
institutions.” – the World Bank’s PRSP Handbook.

3. “The sound exercise of political, economic, and administrative authority to manage a

country’s resources for development. It involves the institutionalization of a system through
which citizens, institutions, organizations, and groups in a society articulate their interests,
exercise their rights, and mediate their differences in pursuit of the collective good
“(Country Governance Assessment 2005).

4. “The exercise of economic, political, and administrative authority to manage a country’s

affairs at all levels. It comprises mechanisms, processes, and institutions through which
citizens and groups articulate their interests, exercise their legal rights, meet their
obligations, and mediate their differences.” UNDP.

5. In governance, citizens are rightly concerned with a government’s responsiveness to their

needs and protection of their rights. In general, governance issues pertain to the ability of
government to develop an efficient, effective, and accountable public management process
that is open to citizen participation and that strengthens rather than weakens a democratic
system of government. The USAID, Office of Democracy & Governance

6. Refers to how any organization, including a nation, is run. It includes all the processes,
systems, and controls that are used to safeguard and grow assets.” (UNDP, 1997)

7. “The systems, processes and procedures put in place to steer the direction, management
and accountability of an organization.” Birmingham City Council. When applied to
organizations that operate commercially, governance is often termed "corporate governance"

8. "Promoting fairness, transparency and accountability" – World Bank

9. "A system by which business organizations are directed and controlled". - OECD

10. “The manner in which power is exercised in the management of a country’s social and
economic resources for development. It is referred to as the quality of the institutions to
make, implement and enforce sound policies in an efficient, effective, equitable and
inclusive man The Asian Development Bank (ADB)

11. In broad terms, governance is about the institutional environment in which citizens
interact among themselves and with government agencies/officials. (ADB, 2005).

12. The process of decision-making and the process by which decisions are implemented (or
not implemented). Governance can be used in several contexts such as corporate
governance, international governance, national governance and local governance.

13. The interactions among structures, processes and traditions that determine how power
and responsibilities are exercised, how decisions are taken, and how citizens or other
stakeholders have their say. Fundamentally, it is about power, relationships and
accountability: who has influence, who decides, and how decision-makers are held
accountable. (IOG 2003)
 14. “As the exercise of economic, political and administrative authority to manage the
nation’s affairs at all levels. It comprises of mechanisms, processes and institutions through
which citizens and groups articulate their interests, exercise their legal rights and obligations
and mediate their differences. Governance is not the sole domain of government but
transcends government to encompass the business sector and the civil society. NEDA (2006)

The Institute on Governance defines governance as the process whereby societies or

organizations make their important decisions, determine who has voice, who is engaged in
the process and how account is rendered. (IOG, 2006) The Institute also provides a
framework to further establish the concept of governance as shown below2 .

DECISION MAKING

Figure 1

The need for governance exists anytime a group of people come together to accomplish an
end. Most agree that the central component of governance is decision making. It is the
process through which this group of people make decisions that direct their collective
efforts. (See figure 1)

2
The Institute of Governance (IOG) is a Canadian, non-profit think tank founded in 1990 with the mission to improve
governance for public benefit. For further information visit their website at www.iog.org
Figure 2
__________________________________________________________________________

STAKEHOLDERS
________________________________________________________________________

INPUT

DECISION MAKING

Source: Institute of Governance http://www.iog.ca/

If the group is too large to efficiently make all necessary decisions, it creates an entity to
facilitate the process. Group members delegate a large portion of the decision-making
responsibility to this entity. In voluntary sector organizations this entity is the board of
directors. One simple definition of governance is "the art of steering societies and
organizations." Governance is about the more strategic aspects of steering, making the larger
decisions about both direction and roles.

Some observers criticize this definition as being too simple. Steering suggests that
governance is a straightforward process, akin to a steersman in a boat. These critics assert
that governance is neither simple nor neat — by nature it may be messy, tentative,
unpredictable and fluid. Governance is complicated by the fact that it involves multiple
actors, not a single helmsman.

These multiple actors are the organization's stakeholders. (See figure 2) They articulate their
interests; influence how decisions are made, who the decision-makers are and what decisions
are taken.
Figure 3

STAKEHOLDERS
__________________________________________________________________________

INPUT OUTPUT
ACCOUNTABILITY

D DECISION MAKING

Source: Institute on Governance http://www.iog.ca

Decision-makers must absorb this input into the decision-making process. Decision-makers
are then accountable to those same stakeholders for the organization's output and the process
of producing it. see Fig.3

Governance According to UNDP

The challenge for all societies is to create a system of governance that promotes supports and
sustains human development - especially for the poorest and most marginal. But the search
for a clearly articulated concept of governance has just begun.

Good governance is, among other things, participatory, transparent and accountable. It is
also effective and equitable. And it promotes the rule of law. Good governance ensures that
political, social and economic priorities are based on broad consensus in society and that the
 voices of the poorest and the most vulnerable are heard in decision-making over the
allocation of development resources.

Governance has three legs: economic, political and administrative. Economic governance
includes decision-making processes that affect a country's economic activities and its
relationships with other economies. It clearly has major implications for equity, poverty and
quality of life. Political governance is the process of decision-making to formulate policy.
Administrative governance is the system of policy implementation. Encompassing all three,
good governance defines the processes and structures that guide political and socio-
economic relationships.

Governance encompasses the state, but it transcends the state by including the private sector
and civil society organizations. What constitutes the state is widely debated. Here, the state
is defined to include political and public sector institutions. UNDP's primary interest lies in
how effectively the state serves the needs of its people. The private sector covers private
enterprises (manufacturing, trade, banking, cooperatives and so on) and the informal sector
in the marketplace. Some say that the private sector is part of civil society. But the private
sector is separate to the extent that private sector players influence social, economic and
political policies in ways that create a more conducive environment for the marketplace and
enterprises.

Civil society, lying between the individual and the state, comprises individuals and groups
(organized or unorganized) interacting socially, politically and economically - regulated by
formal and informal rules and laws.

GOVERNANCE & SUSTAINABLE HUMAN DEVELOPMENT:

UNDP believes that developing the capacity of good governance is the primordial way to
eliminate poverty. Notions of good governance and the link between governance and
sustainable human development vary greatly, however, both in academic literature and
among development practitioners3. (UNDP, 1997)

So, what is sustainable human development?

Human development as expanding the choices for all people in society. This means that men
and women - particularly the poor and vulnerable - are at the center of the development
process. It also means "protection of the life opportunities of future generations...and...the
natural systems on which all life depends" (UNDP, Human Development Report 1996). This
makes the central purpose of development the creation of an enabling environment in which
all can enjoy long, healthy and creative lives.

3
The United Nations Development Programme (UNDP) has been at the forefront of the growing international
consensus that good governance and sustainable human development are indivisible.
 Economic growth is a means to sustainable human development - not an end in itself.
Human Development Report 1996 showed that economic growth does not automatically
lead to sustainable human development and the elimination of poverty. For example,
countries that do well when ranked by per capita income often slip down the ladder when
ranked by the human development index. There are, moreover, marked disparities within
countries - rich and poor alike - and these become striking when human development among
indigenous peoples and ethnic minorities is evaluated separately.

There are five aspects to sustainable human development - all affecting the lives of the poor
and vulnerable:

 Empowerment - The expansion of men and women's capabilities and choices increases
their ability to exercise those choices free of hunger, want and deprivation. It also increases
their opportunity to participate in, or endorse, decision-making affecting their lives.

 Co-operation - With a sense of belonging important for personal fulfillment, wellbeing and
a sense of purpose and meaning, human development is concerned with the ways in which
people work together and interact.

 Equity - The expansion of capabilities and opportunities means more than income - it also
means equity, such as an educational system to which everybody should have access.

 Sustainability - The needs of this generation must be met without compromising the right
of future generations to be free of poverty and deprivation and to exercise their basic
capabilities.

 Security - Particularly the security of livelihood. People need to be freed from threats, such
as disease or repression and from sudden harmful disruptions in their lives.

 UNDP focuses on four critical elements of sustainable human development: eliminating

poverty, creating jobs and sustaining livelihoods, protecting and regenerating the
environment, and promoting the advancement of women. Developing the capacities for good
governance underpins all these objectives.

Source: Governance for Sustainable Human Development (1997) A UNDP Policy Document
United Nations Development Programme Internet Source: http://magnet.undp.org/policy/

The Art of Governing

To govern is to exercise power and authority over a territory, system or organization. This
applies to both government and governance 4 . The exercise of authority is uppermost in
4
The discussions on the Art of Governing is an exceprt from (From Government to Governance) (2005) Reflections
of Ledivina C. Carino of the University of the Philippines, National College of Public Administration & Governance,
 government and remains significance in governance but is no longer the single focus. This is
because the power in governance is not so much wielded as shared and authority is defined
not so much by control of the ruler as by the consent and participation of the governed. Is a
state weak under a regime of governance? Not necessarily for it can be stronger than ever
before except that the acts expected of it are different from the role of the state as
government.

In traditional parlance, government rules and controls, but in governance, it orchestrates and
manages. These contrasts may seem overdrawn, but we will flesh out and qualify them as the
discussion proceeds.

Ruling and orchestrating rest on different bases. To rule is to be the sole authority, for which
the appropriate response is to obey. A government that rules relies on force to exact
compliance, and we know from introductory from the introductory political science that the
state has the monopoly of legitimate violence. It enacts laws binding on all the inhabitants
and metes out sanctions according to these laws. It delivers services to passive recipients
who have little influence in the definition of the programs or their eligibility requirement and
methods.

By contrast, to orchestrate is to call on everyone to play a part in moving the society. Power
rests on the trust the players have on the director and on each other. Because built on trust,
transparency in the conduct of governing is essential. Laws still bind all, but they are laws
they had a part in bringing about. Accountability is shared, and they who have the greatest
power bear the greater responsibility. To control is not to manage, as Landau and Stout
maintained in a classic article. We have not found a definition of governance that uses
control instead of management.

To control is to direct what each part of the system must do. It assumes that the controller
knows the goals and is certain how an action it requires can lead to it. Deviation will be
viewed as error in a context of full knowledge.

Controlling assumes a law (using the term in scientific sense) but to manage is to act on a
hypothesis. The manager works on incomplete information and tests if the hypothesis is
borne out in a given situation. A manager then must be open to inputs from outside him
which might provide new information and to methods other than those originally
promulgated that could lead to the specified goal. Governance chooses management over
control because its system is permeable, admits outside the influences, assumes no
omnipotence or omniscience on the part of the decision-maker, and subject decisions to the
evaluation and critique of all those with a stake in them.

All governing is an act of leadership, of moving a society towards a preferred direction.

While government can have a connotation of being interested only in maintenance and in
(UP-NCPAG) on the Concept of Governance as an off-shoot of the (World COG)
 preserving peace and order, governance implies leadership toward societal development.
This is shown in the following passage from the International Institute of Administrative
Sciences.

Governance is the process whereby elements in society wield power and authority, and
influence and enact policies and decisions concerning public life, economic and social
development.” This shows that the concept is indeed a product of the late twentieth century
when development became a preoccupation of societies and states. The definition of
development shall be discussed on the succeeding modules.

The Need for Good Governance: Why Governance Matters

Good governance creates a strong future for an organization by continuously steering

towards a vision and making sure that day-to-day management is always lined up with the
organization’s goals. At its core, governance is about leadership. An effective board will
improve the organization’s results, both financial and social, and make sure the owners'
assets and funds are used appropriately. Poor governance can put organizations at risk of
commercial failure, financial and legal problems for directors/trustees or allow an
organization to lose sight of its purpose and its responsibilities to its owners and people who
benefit from its success.

The Rights-Based Approach to governance implies that the holders of rights should also
participate fully in deciding how those rights are fulfilled, such as through participation and
greater empowerment. And as the Millennium Declaration emphasizes, one of the most
important requirements for achieving this and the MDG is “governance” The report points
out that Asia and the Pacific has many diverse forms of democratic governments 5 . In some
cases these have involved highly centralized administrations that have offered a limited
space for popular participation. Nevertheless, in recent years there have been significant
changes. One of the most dramatic examples has been in Indonesia, which for decades until
the late 1990s had a strongly centralized administration. Now the democratic Government in
Indonesia has not only offered free and fair elections; it has also enacted a radical process of
decentralization.

Another vital attribute of governance in MDGs is efficient and effective administration. The
Government of India, for example, is determined to be more responsive and accountable to
the public. A further governance priority in Asia and the Pacific is the fight against
corruption, which degrades the quality of governance and hits hardest at the poorest. The
Government of China for example is among those taking firm measures to combat
corruption and promote integrity in governance.

Theories of Governance
5
The discussions on the Millennium Declaration as well as the comprehensive discussions of MDG are reflected on
Module 2 of this course.
If Max Weber and Woodrow Wilson were to suddenly appear on the landscape of modern
public administration, normative theories in hand, it is likely they would be unable to
recognize the field of governance. The comprehensive, functionally uniform, hierarchical
organizations governed by strong leaders who are democratically responsible and staffed by
neutrally competent civil servants who deliver services to citizens – to the extent they ever
existed – are long gone. They have been replaced by an ‘organizational society’ in which
many important services are provided through multi organizational programs. These
programs are essentially “interconnected clusters of firms, governments, and associations
which come together within the framework of these programs” (Hjern and Porter, 1981, pp.
212-213).

These implementation structures operate within a notion of governance about which a

surprising level of consensus has been reached. There is a pervasive, shared, global
perception of governance as a topic far broader than ‘government’; the governance approach
is seen as a “new process of governing, or a changed condition of ordered rule; or the new
method by which society is governed” (Stoker, 1998, p. 17). Similarly, in the scholarship
that has followed the ‘Reinventing Government’ themes of public effectiveness; much has
been written of New Public Management practices by which governance theory is put into
action (Mathiasen, 1996; Lynn, 1996, 1998; Terry, 1998; Kelly, 1998; Peters and Pierre,
1998).

In this complex, devolved mode of service delivery, the unit of analysis for some students of
policy implementation is the network of nonprofit organizations, private firms and
governments. As Milward and Provan note, in policy arenas such as health, mental health,
and welfare, "...joint production and having several degrees of separation between the source
and the user of government funds...combine to ensure that hierarchies and markets will not
work and that networks are the only alternative for collective action" (2000, p. 243).

The discussions below describe the relationship of governance and other Public
Administration theories, the New Public Management, in particular.

The (mostly European) literature on governance and the increasingly international

scholarship on New Public Management (NPM) describe two models of public service that
reflect a ‘reinvented’ form of government which is better managed, and which takes its
objectives not from democratic theory but from market economics (Stoker, 1998). While
some use the terms interchangeably (for example, Hood, 1991), most of the research makes
distinctions between the two. Essentially, governance is a political theory while NPM is an
organizational theory (Peters and Pierre, 1998).

As Stoker describes it, Governance refers to the development of governing styles in

which boundaries between and within public and private sectors have become blurred.
The essence of governance is its focus on mechanisms that do not rest on recourse to the
authority and sanctions of government…. Governance for (some) is about the potential for
contracting, franchising and new forms of regulation. In short, it is about what (some) refer
to as the new public management. However, governance …is more than a new set of
managerial tools. It is also about more than achieving greater efficiency in the production of
public services (1998, p. 17-18). Peters and Pierre agree, saying that governance is about
process, while NPM is about outcomes (1998, p. 232).

Governance is ultimately concerned with creating the conditions for ordered rule and
collective action (Stoker, 1998; Peters and Pierre, 1998; Milward and Provan, 2000). As
should be expected, all efforts to synthesize the literature draw from theories found in the
separate traditions. Berman owes debts to Van Meter and Van Horn (1975, 1976) and
Goggin, et al (1990), among others. See Kaboolian (1998) for a description of reform
movements in the public sector that collectively comprise “New Public Management”
(NPM). I adopt her definition of NPM as a series of innovations that – considered
collectively – embody public choice approaches, transaction-cost relationships, and
preferences for efficiency over equity. notes, the outputs of governance are not different
from those of government; it is instead a matter of a difference in processes (1998, p. 17).

Governance refers to the development of governing styles in which boundaries between and
within public and private sectors have become blurred. The essence of governance, and its
most troublesome aspect, according to its critics, is a focus on mechanisms that do not rest
on recourse to the authority and sanctions of government (Bekke, et al, 1995; Peters and
Pierre, 1998; Stoker, 1998; Rhodes, 1996, 1997). Stoker (1998, p. 18) draws five
propositions to frame our understanding of the critical questions that governance theory
should help us answer. He acknowledges that each proposition implies a dilemma or critical
issue.

1. Governance refers to institutions and actors from within and beyond government.

(But there is a divorce between the complex reality of decision-making associated with
governance and the normative codes used to explain and justify government). The
question, as it relates to policy implementation, is one of legitimacy. The extent to which
those with decision-making power are seen to be legitimate (in the normative sense) will
directly impact their ability to mobilize resources and promote cooperation and build and
sustain partnerships. Thus, the normative dilemma has pragmatic overtones. Beetham
suggests that for power to be legitimate it must conform to established rules; these rules
must be justified by adherence to shared beliefs; and the power must be exercised with
the express consent of subordinates (1991, p. 19).

2. Governance identifies the blurring of boundaries and responsibilities for tackling

social and economic issues.
 This shift in responsibility goes beyond the public-private dimension to include notions
of communitarianism and social capital. (However, blurring of responsibilities can lead
to blame avoidance or scapegoating). An interesting research area that has grown in
scope and importance following the implementation of welfare reform is the study of
faith-based organizations’ role and impact in service delivery. Public agencies have not
merely endorsed or encouraged this partnership, but in some cases have institutionalized
these arrangements. This suggests a shift in responsibility beyond the more traditional
notions of contracting out and privatization. At the same time, all of these activities
contribute to uncertainties on the part of policy makers and the public about who is in
charge and who can be held accountable for performance outcomes. Implementation
theory must attend to the nature and impact of responsibility and accountability.

3. Governance identifies the power dependence involved in the relationships between

institutions involved in collective action.

Organizations are dependent upon each other for the achievement of collective action,
and thus must exchange resources and negotiate shared understandings of ultimate
program goals. The implementation literature is replete with studies of coordination
barriers and impacts (for example, Jennings and Ewalt, 1998). (Nonetheless, power
dependence exacerbates the problem of unintended consequences for government
because of the likelihood of principal-agent problems.) For implementation scholarship
to contribute to a greater understanding of governance relationships, arrangements for
minimizing (and impacts of) game-playing, subversion, creaming and opportunism must
be explored.

4. Governance is about autonomous self-governing networks of actors.

(The emergence of self-governing networks raises difficulties over accountability).

Governance networks, in Stoker’s terms, “involve not just influencing government
policy but taking over the business of government” (1998, p. 23). The “hollow state” that
networks have triggered (Milward, 1996; Milward and Provan, 2000) raises questions
about how government can manage public programs when they consist largely of entities
outside the public domain. Network theory and governance issues overlap, and they are
both directly linked to questions of implementation.

5. Governance recognizes the capacity to get things done which does not rest( on the
power of government to command or use its authority.

But even so, government failures may occur.) It is in this proposition that we find a
natural progression from the more encompassing theory of governance to the more
prescriptive notions of New Public Management. Stoker notes that within governance
there is a concerted emphasis on new tools and techniques to steer and guide. The
language is taken directly from reinventing themes. The dilemma of governance in this
 context is that there is a broader concern with the very real potential for leadership
failure, differences among key partners in time horizons and goal priorities, and social
conflicts, all of which can result in governance failure. Stoker draws on Goodin as he
suggests that design challenges of public institutions can be addressed in part by
“revisability, robustness, sensitivity to motivational complexity, public dependability,
and variability to encourage experimentation” (Stoker, 1998, p. 26, quoting from Goodin,
1996, p. 39-43).

As Peters and Pierre note, “governance is about maintaining public-sector resources under
some degree of political control and developing strategies to sustain government’s capacity
to act” in the face of management tools that replace highly centralized, hierarchical
structures with decentralized management environments where 18 decisions on resource
allocation and service delivery are made closer to the point of delivery (1998, p. 232)6 .

Lesson 2
The Key Actors in Governance

SPECIFIC OBJECTIVES: at the end of the lesson, the students should be able to:

1. Identify the different actors in governance;

2. Critically explain the role of each player in the governance process;
3. Critique on the current efforts of these key actors in the any governance endeavors;
4. Illustrate the inter-relationship of the role of the key actors in governance;
5. Discuss some of the lessons and best practices in the governance of partnerships.
6. Critically assess the involvement of Civil Society organizations and the private sectors in
governance.

Pedagogical Activities:

6
Also refer to Ewalt, Jo Am G. (2001) Theories of Governance and New Public Management: Links to Understanding Welfare
Policy Implementation; a Second Draft. A Paper presented at the Annual Conference of the American Society for Public
Administration.
 1. Multi-Media Instruction
Distribution of handouts on Lesson 2
3.2 PowerPoint Presentation on Lesson 2

3.3 Venn Diagram

2. Panel discussion/Debate - Exchange of opinions to analyze, clarify and reach conclusions

about issues, questions and problems on the role of the different key actors in governance.
3. FGD- Focused Group Discussion. (Meta-planning) The students are going to answer the focus
questions in a meta card. The answer should only be 5-8 words per meta card. Answers should be
written in BOLD letters.
4. Paper/Oral Presentation: This is designed as a vehicle for the students to research and describe
the role of each key actor in governance as well as their interplay in the governance process. This
is also to express an evaluation of its impact to any governance endeavors like in policy
formulation. The paper is due after the FGD. Each group (state, civil society and business sector)
will orally 20 present (maximum of 10 minutes) their paper during the class. Fellow students
listening to the presentation will provide a peer review of the presentations. Critique and
synthesis is done by the instructor at the end of each or all presentations.
5. Role-Playing- The deliberate acting out of a role. This is to demonstrate the critical role of
each key players of governance.

LESSON PROPER

The management of public affairs is not an exclusive domain of government and the concept of
governance goes beyond the realm of the state or public sector. It also involves the Civil Society
which comprises of schools/academe, non-government organizations (NGO), People’s
Organization, Voluntary Organizations, and the Private or the Business Sectors. The involvement
of these sectors is based on their common interest and similar aspirations committed to the same
public concerns. As Louise Frechette, Deputy Secretary General of the UN said, “Governance is
not something the state does to society, but the way society itself, and the individuals who
compose it, regulate all the different aspects of their collective life.
 Figure 4
Key Actors in Governance

State/Public
Sector

Civil
Society Business
Sector

Source: UNDP (1997)

1. The State

The state is the principal actor of government to facilitate participation and provide an
enabling environment to other elements of the society. It is a strong entity that recognizes
the significance and autonomy of the other sectors without overwhelming them.

1. 1 The state as enabler provides for the legal and regulatory framework and
political order within which firms and organizations can plan and act. It encourages
citizens to act by liberating them from the fear of military reprisals when they criticize
policies or serve marginalized groups. It can assure private firms that policies are fair and
not subject to caprice or whim or the private interest of political officials.
1.2. The state as resource provider facilitates by providing resources to assist
markets and communities. Such resources include information, technical expertise,
research and development programs, physical infrastructure as well as grants-in-aid or
incentive schemes. State/ Public Sector Business Sector Civil Society. As part of the state,
the local government performs a crucial role in the efforts of the national government in
implementing its programs and projects. The Local government is the real actor in
effecting governance and development.

The Local Government.

The Local Government is an avenue where the civil society groups at the community
level can participate meaningfully in the decision-making processes. By virtue of the
powers and authority provided in the Local Government Code of 1991, local government
formulates and defines the legal and regulatory framework. This serves as the basis for
the involvement and participation of the various organizations and groups in the
governance of the community. The Local Government also maintains a political order and
provides the necessary resources such as technical expertise and infrastructure to the
various groups, most especially to those who are places at disadvantaged position. As an
enabler, the local government likewise provides the environment for the development of
full potentials of its citizens guided by the “overarching goals of respecting, protecting
and fulfilling basic human rights for all and of empowering everyone to shape their own
destiny under a regime in which the realization of basic rights is guaranteed” (J.
Natividad, Rights-Based Philippine Governance Review, DAP, 2005: 21) ADB also
outlined the role of the STATE and the key milestone in governance as shown below.

Roles of the States and Key Milestones in Governance

Table 1 Sound Development Management Roles of the State Key
Milestones

1. Creating a conducive economic environment

 Enact and enforce laws that promote economic competition
  Decentralize economic decision making and stabilize inflation
 Reduce public deficit and free market to set prices for privately produced goods and
services

2. Protecting the Vulnerable

 Ensure the survival of pension systems
 Create or maintain reasonable unemployment benefits
 Establish and maintain a system of private health and social insurance
 Maintain social assistance programs for the disabled and disadvantaged

3. Improving government efficiency and responsiveness

 Attract qualified, competent, honest and realistically paid individuals into public
service
 Establish a civil service system that relies on merit-based recruitment and
promotion, incentive-based compensation, and reward -oriented career paths that are
clearly defined
 Attract and retain a corps of professionals who are responsible for formulating and
implementing economic policies and support them with good training,

Roles of the States and Key Milestones in Governance

Table 1

Sound Development Management Roles of the State Key Milestones

1. 2. Creating a conducive  Enact and enforce laws that promote economic

economic competition
environment:  Decentralize economic decision making and
stabilize inflation
 Reduce public deficit and free market to set prices
for privately produced goods and services

3. 4. . Protecting the  Ensure the survival of pension systems

Vulnerable  Create or maintain reasonable unemployment
benefits
 Establish and maintain a system of private health
and social insurance
 Maintain social assistance programs for the disabled
and disadvantaged

5. 6. Improving  Attract qualified, competent, honest and realistically

government paid individuals into public service
 efficiency and  Establish a civil service system that relies on merit-
responsiveness: based recruitment and promotion, incentive-based
compensation, and rewardoriented career paths that
are clearly defined
 Attract and retain a corps of professionals who are
responsible for formulating and implementing
economic policies and support them with good
training, appropriate degree of independence and
professional reward structures.
 Protect professional civil servants from political
interference in carrying out their responsibilities
 Establish a civil service system that is flexible
enough to facilitate communication between the
public and private sectors.

4. 5. Empowering  Establish a conducive institutional environment

people and comprising properly functioning parliaments, legal
democratizing the and judicial systems, and electoral processes.
political system:

6. 7. Decentralizing  Respond quickly to local needs and conditions

the administrative  Redistribute authority, responsibility and finances
system for public services among different government levels
 Strengthen sub-national units of governments
 Respect traditional structures of authority as well as
traditional mechanisms for resolving conflicts and
managing common property in society.

8. 9. Reducing gaps  Reduce social disparities

between rich and
poor

10. 11. Encouraging  Maintain cultural identity and roots while promoting
cultural diversity social cohesion
and social  Ensure political systems are accessible to all and
integration: that legal systems afford equal opportunities.

12. 13. Protecting the  Integrate economic and environmental accounting

environment  Promote interregional equity

Source: 7Asian Development Bank (2005) Country Governance Assessment

7
* The Country Governance Assessment of the Philippines is prepared by the Philippine Governance Assessment
Study Team headed by the Team Leader Alex B. Brillantes Jr. of the UP National College of Public Administration &
Governance.
 independence and professional reward structures.
 Protect professional civil servants from political interference in carrying out their
responsibilities
 Establish a civil service system that is flexible enough to facilitate communication
between the public and private sectors

7. Empowering people and democratizing the political system

 Establish a conducive institutional environment comprising properly functioning
parliaments, legal and judicial systems, and electoral processes.
5. Decentralizing the administrative system
 Respond quickly to local needs and conditions
 Redistribute authority, responsibility and finances for public services among different
government levels
 Strengthen sub-national units of governments
 Respect traditional structures of authority as well as traditional mechanisms for
resolving conflicts and managing common property in society

6. Reducing gaps between rich and poor

 Reduce social disparities

7. Encouraging cultural diversity and social integration

 Maintain cultural identity and roots while promoting social cohesion
 Ensure political systems are accessible to all and that legal systems afford equal
opportunities

8. Protecting the environment

 Integrate economic and environmental accounting regional equity

1. The Private or Business Sector - Corporate Governance.

In governance parlance, the private/business sector serves as the engine of the society. It
is an important collaborator in the economic development of the community. It generates
jobs and incomes for the people in the community. Because of its resources such as
financial and technical expertise, it can assist the local government in coming up with an
economic plan for the community and help in the implementation of the plan. It can also
provide the needed resources for the government to enable it to pursue big and wide scale
 projects that are beyond the local government’s financial capability. Efficiency and
economy are expected outputs or products of corporate governance. The state provides a
level playing field for those able to compete, and turns its attention to the provisions of
safety nets for those unable to do so.

In the field of information technology, the private sector can help the local government in
the development of technologies that would help proper the growth and development of
the economy of the community. In this connection, the private sector can assist the local
government promote the transfer of technology such as the application of spatial planning
and decision support systems for effective local governance. The participation of market
and civil society in governance adds new role to the state and that is of building
partnerships and linkages to the two sectors. Moreover, their engagement of the state
shifts the social picture from elite control to active citizenship.

2. The Civil Society.

The Civil Society consists of the complex of citizens and groups outside government
working in the public arena. It is often called as CSOs- civil society organizations and
also sometimes referred to as the Third Sector.

The civil society comprises the academe or schools, NGO’s e.g. Association of Schools
of Public Administration in the Philippines, Inc. (ASPAP, Inc) housed at the National
College of Public Administration and Governance which is religiously collaborating with
Government and NGOs (GOP-UNDP Programme, Galing-Pook Foundation, Social
Watch Philippines, TAN, TI etc.) in promoting governance and development.). Other civil
society groups include POs and the voluntary groups.

This sector plays an important role in the facilitation and interaction among the key
players of local governance. It mobilizes the various groups or organizations in the
community to participate in planning and decision-making process.

The Philippines has a large and very vibrant Third Sector with a long history dating back
to its colonial years. The total number of civil society organizations is estimated to
between a low of 249,000 to a high of 497,000 (Cariño, 2002: 84). Ma. Oliva Z.
Domingo also discussed in her paper entitled: Third Sector Governance: Meanings,
Issues, and Challenges in the Philippines”, the Civil Society is the third sector
governance.

The extensive use of the term governance in the literature and day-to-day operations of
Third Sector organizations precedes the now current, broader meaning popularized by the
UNDP. Brian O’Connell’s work published in 1985, identifies governance as a basic role
for the boards of voluntary organizations (1985: 22). An even much earlier work
describes alternative governance models for nonprofit universities (Baldridge et al, 1997).
Scholars writing on Third Sector organizations make fine distinctions between
governance and management (Wood, 1996: 3-4), or even with administration (Lyons,
2001: 123-124), but affirm that the term governance captures the scope of the “special
kind of management” applicable to these organizations.

Within the broad view of governance, Third Sector organizations play a key role as they
engage in programs and deliver services in areas where government is absent or where
the private sector is not interested in. They facilitate political and social integration by
mobilizing and empowering people to participate in economic, social, and political
activities. Within the Third Sector itself, governance generally refers to the exercise of
governing functions by responsible persons. In this sense, the term has an inward-looking
perspective, an internal relevance for Third Sector organizations.

Whether in the broad or the internal point of view, Third Sector organizations are called
upon to respond to the challenge of good governance. In order to do so, the Sector needs
to clarify the meanings, issues, and role expectations associated with the concept of
governance.

In local governance, a critical role that the civil society plays is that it provides the forum
for the airing of grievances, complaints, concerns, issues and problems among the
populace. Specifically, it provides voice to the “inarticulate and the unarticulated”. It also
performs some political role in the community by serving as an instrument of checks and
balances on the power of the state or local government and the business sector behavior.
It is seen as a claim holder of basic human rights. And most of all, it can serve as an
alternative delivery mechanism for the frontline services.

Some civil society organizations engage primarily in the critique of existing policy and
the advocacy of what to them are more appropriate policies for the good of the nation. In
authoritarian regimes which close avenues of citizen access to policy formulation, some
groups maybe forced to go underground and work for the ouster of the regime itself. But
even in the most democratic states, there will be no lack of critics that press for regime
change and drastic policy reversals. NGOs may also go beyond opposition and debate
into competing with government’s own delivery system, demonstrating that the
alternative mechanisms they advocate are capable of being implemented on the ground.

Other civil society organizations may extend the government’s delivery system by
mobilizing people to prove themselves eligible to receive government social services, or
providing their own services in areas unreached by the public bureaucracy. The
government may complement NGOs in turn by providing the needed scaling up and
referral system for their relatively smaller programs.

In relations to this, there are other possible directions to strategic directions for active
civil society participation in good governance. In general terms, this means supporting
efforts to promote partnerships between government and civil society. These maybe in
designing, implementing, monitoring, and evaluating programs and projects. This can
also mean identifying areas where civil society can either complement or supplement the
efforts of the Government to deliver services, or even serve as alternative mechanisms
altogether. ADB (2005)

3. The Private or Business Sector - Corporate Governance

In a governance parlance, the private/business sector serves as the engine of the society. It
is an important collaborator in the economic development of the community. It generates
jobs and incomes for the people in the community. Because of its resources such as
financial and technical expertise, it can assist the local government in coming up with an
economic plan for the community and help in the implementation of the plan. It can also
provide the needed resources for the government to enable it to pursue big and wide scale
projects that are beyond the local government’s financial capability. Efficiency and
economy are expected outputs or products of corporate governance. The state provides a
level playing field for those able to compete, and turns its attention to the provisions of
safety nets for those unable to do so.

In the field of information technology, the private sector can help the local government in
the development of technologies that would help proper the growth and development of
the economy of the community. In this connection, the private sector can assist the local
government promote the transfer of technology such as the application of spatial planning
and decision support systems for effective local governance.

The participation of market and civil society in governance adds new role to the
state and that is of building partnerships and linkages to the two sectors. Moreover, their
engagement of the state shifts the social picture from elite control to active citizenship.
 Figure 5
Urban Actors

(Please see scan copy)

Source: United Nations Economic & Social Commissions for Asia and the Pacific (UN ESCAP)
(2001) Internet Source: http://www.unescap.org/huset/gg/governance.htm

As mentioned earlier, government is one of the key actors in governance. Other actors
involved in governance vary depending on the level of government that is under
discussion. In rural areas, for example, other actors may include influential land lords,
associations of peasant farmers, cooperatives, NGOs, research institutes, religious
leaders, finance institutions political parties, the military etc. The situation in urban areas
is much more complex. Figure 5 provides the interconnections between actors involved
in urban governance. At the national level, in addition to the above actors, media,
lobbyists, international donors, multi-national corporations, etc. may play a role in
decision-making or in influencing the decision-making process.

All actors other than government and the military are grouped together as part of the
"civil society." In some countries in addition to the civil society, organized crime
syndicates also influence decision-making, particularly in urban areas and at the national
level.

Similarly formal government structures are one means by which decisions are arrived at
and implemented. At the national level, informal decision-making structures, such as
"kitchen cabinets" or informal advisors may exist. In urban areas, organized crime
syndicates such as the "land Mafia" may influence decision-making. In some rural areas
locally powerful families may make or influence decision-making. Such, informal
decision-making is often the result of corrupt practices or leads to corrupt practices.
( http://www.unescap.org/huset/gg/governance.htm)

In developed and developing countries alike, the state is being compelled to redefine its
role in social and economic activity - to reduce it, reorient it, reconfigure it. The pressures
for change stem from three sources:

 The private sector wants a more conducive market environment and a better balance
between state and market.

 Citizens want increased accountability and responsiveness from government, as well as

greater decentralization.

 Global pressures from supranational and worldwide social and economic trends are
challenging the identity and nature of the state.

Relationships between Governance and Human Development as performed by each

Domain of Governance

Each domain of governance - the state, the private sector and civil society - has a unique
role in promoting sustainable human development.

The State.

In countries where electoral processes exist, the state is composed of an elected

government and an executive branch. The state's functions are manifold - among them,
being the focus of the social contract that defines citizenship, being the authority that is
mandated to control and exert force, having responsibility for public services and creating
an enabling environment for sustainable human development. The latter means
establishing and maintaining stable, effective and fair legal-regulatory frameworks for
public and private activity. It means ensuring stability and equity in the marketplace. It
means mediating interests for the public good. And it means providing effective and
accountable public services. In all four roles, the state faces a challenge - ensuring that
good governance addresses the concerns and needs of the poorest by increasing the
opportunities for people to seek, achieve and sustain the kind of life they aspire to.

The state, of course, can do much in such areas as upholding the rights of the vulnerable,
protecting the environment, maintaining stable macroeconomic conditions, maintaining
standards of public health and safety for all at an affordable cost, mobilizing resources to
provide essential public services and infrastructure and maintaining order, security and
social harmony.

State institutions can also empower the people they are meant to serve - providing equal
opportunities and ensuring social, economic and political inclusion and access to
resources. But people can be empowered only if their legislatures, electoral processes and
legal and judicial systems work properly. Parliaments of freely and fairly elected
members representing different parties are crucial to popular participation and
government accountability. Effective legal and judicial systems protect the rule of law
and the rights of all. Open elections mean public confidence and trust - and so political
legitimacy. States should also decentralize political and economic systems to be more
responsive to citizens' demands and to changing economic conditions.

In developed and developing countries alike, the state is being compelled to redefine its
role in social and economic activity - to reduce it, reorient it, and reconfigure it. The
pressures for change stem from three sources:

 The private sector wants a more conducive market environment and a better balance
between state and market.

 Citizens want increased accountability and responsiveness from government, as well as

greater decentralization.

 Global pressures from supranational and worldwide social and economic trends are
challenging the identity and nature of the state.

The private sector

The state is a big force for development - but it is not the only one. Sustainable human
development depends in part on creating jobs that provide enough income to improve
living standards. Most states now recognize that the private sector is the primary source
of opportunities for productive employment. Economic globalization is fundamentally
changing the ways in which industries and enterprises operate. In many developing
countries, private enterprise must be encouraged and supported to be more transparent
and competitive in the international marketplace.

Equitable growth, gender balance, environmental preservation, expansion of the private

sector and responsible and effective participation in international commerce cannot be
achieved by the market alone, however. States can foster private sector development that
is sustainable by:
 Creating a stable macroeconomic environment.
 Maintaining competitive markets.
 Ensuring that the poor (especially women) have easy access to credit.
 Nurturing enterprises that generate the most jobs and opportunities.
 Attracting investment and helping to transfer knowledge and technologies, particularly
to the poor.
 Enforcing the rule of law.
 Providing incentives for human resource development.
 Protecting the environment and natural resources.

Civil society

Civil society also has to protect the rights of all citizens. As the state and the private
sector are being reshaped and their relationships redefined, civil society is changing in
important ways. Unresponsive government and unrelenting economic and social pressure
have undermined some traditional civil society organizations and strengthened others -
and in many cases forced people to organize in new ways. Civil society is thus more than
just society. It is the part of society that connects individuals with the public realm and
the state - it is the political face of society.

Civil society organizations channel people's participation in economic and social

activities and organize them into more powerful groups to influence public policies and
gain access to public resources, especially for the poor. They can provide checks and
balances on government power and monitor social abuses. They also offer opportunities
for people to develop their capacities and improve their standards of living - by
monitoring the environment, assisting the disadvantaged, developing human resources,
helping communication among business people.

More fundamentally, civic networks ease the dilemmas of collective action by

institutionalizing social interaction, reducing opportunism, fostering trust and making
political and economic transactions easier. Well-developed civic networks also amplify
flows of information - the basis for reliable political, economic and social collaboration
and public participation of civil society members. These relationships and social norms
make up a nation's social capital. Civil society organizations do not always pursue the
qualities of good governance. Nor are they always the most effective development agents.
That is why states, while recognizing and protecting the democratic rights of civil society
organizations, must also ensure that the rules of law and values that reflect societal norms
are adhered to. Democratic institutions, particularly local ones, can be important in
ensuring that all in society have a voice, as well as ensuring that there are transparent and
fair ways to reach consensus.

Like private enterprises, civil society organizations need adequate capacities to fulfill
their potential. They also need an enabling environment, including a legislative and
regulatory framework that guarantees the right of association, incentives to facilitate
support and ways for civil society organizations to be involved in public policy-making
and implementation.

Strengthening the enabling environment for sustainable human development thus

depends not only on a state that governs well and a private sector that provides jobs that
generate income. It also depends on civil society organizations that make political and
social interaction easier and that mobilize society to participate in economic, social and
political activities. UNDP (1997)

Apart from three key players of governance above, the Institute on Governance considers
a fourth player, the Media, which provides for a flow of information between the major
players, and between the players and society at large. However, media, even if not
controlled by the state, is part of the private sector and therefore not a dispassionate
player. The relative size and strength of each of the players varies depending on the
history, culture and politics of the country. There are no firm boundaries between these
players (and in fact they often overlap) because the borders of these sectors are permeable
(e.g. state-owned organizations may have a foot in both government and the private
sector; government-funded NGOs also straddle two camps). Edgar et. al (2006)

LESSON 3
The Characteristics of Good Governance

What is good governance?

Like government, governance can be good or bad. Bad government and bad governance
have similar characteristics: Corruption, Whimsical and Expedient Decision-Making,
Shortsightedness, disregard for the concern of the many and decisions 8 . In the same vein,
8
The Concept of Governance, Ledivina V. Carino, From Government to Governance, Reflections on the
1999 World Conference on Governance. 2000.
the criteria for good governance and would be the same as good governance. They
include accountability and ethics in decision-making and implementation, transparency
and predictability, rule-bound decision-making and action, responsiveness, a long-term
view of the public interest. The public should therefore have a right to expect laws, a fair
judicial system, politically accountable lawmaking and an effective and reform-minded
bureaucracy.

One goal of good governance is to enable an organization to do its work and fulfill its
mission. Good governance results in organizational effectiveness.

A lot of attention has been focused on good governance practices in the private sector in
Canada, the United States, the United Kingdom, and elsewhere. In the corporate world of
business, the “bottom line” provides a helpful focus point, but even here there can be
difficult questions of judgment as to what constitutes good governance. Current debate
about corporate governance is just starting to look at questions about the broader
purposes of private corporations. The private sectors are expected to provide corporate
social responsibility which seeks to include sustainable development and the need to
address the social, economic and environmental impact of various operations.

In the public and non-profit sectors, the question of what constitutes good governance is
often more complex. In public purpose organizations, good governance is about more
than getting the job done. Especially in non-profits, government agencies and the like,
where values typically play an important role in determining both organizational purpose
and style of operation, process is as important as product. Good governance becomes
more than only a means to organizational effectiveness and becomes an end in itself.

Good governance is about both achieving desired results and achieving them in the
right way.

Since the "right way" is largely shaped by the cultural norms and values of the
organization, there can be no universal template for good governance. Each organization
must tailor its own definition of good governance to suit its needs and values.

There is plenty of room for different traditions and values to be accommodated in the
definition of good governance. At the same time, all is not relative. There are some
universal norms and values that apply across cultural boundaries.

A number of multilateral organizations and institutions (e.g. the United Nations

Development Programme (UNDP), the Organization for Economic Cooperation &
Development (OECD), the Asian Development Bank) have reflected on the elements of
good governance and on their relation to development. As the ethos and experience of
these institutions vary, so, too do their perception of what constitutes good governance.
The challenge for all societies is to create a system of governance that promotes, supports
and sustains human development - especially for the poorest and most marginal. But the
search for a clearly articulated concept of governance has just begun.
Good governance is, among other things, participatory, transparent and accountable. It is
also effective and equitable. And it promotes the rule of law. Good governance ensures
that political, social and economic priorities are based on broad consensus in society and
that the voices of the poorest and the most vulnerable are heard in decision-making over
the allocation of development resources.

THE EIGHT CHARACTERISTICS OF GOOD GOVERNANCE BY UNDP

Good governance is participatory, consensus oriented, accountable, transparent,

responsive, effective and efficient, equitable and inclusive and follows the rule of law. It
assures that corruption is minimized, the views of minorities are taken into account and
that the voices of the most vulnerable in society are heard in decision making. It is also
responsive to the present and future needs of society. Much has been written about the
characteristics of efficient government, successful businesses and effective civil society
organizations, but the characteristics of good governance defined in societal terms remain
elusive.

Interrelated, these core characteristics are mutually reinforcing and cannot stand alone.
For example, accessible information means more transparency, broader participation and
more effective decision-making. Broad participation contributes both to the exchange of
information needed for effective decision-making and for the legitimacy of those
decisions. Legitimacy, in turn, means effective implementation and encourages further
participation. And responsive institutions must be transparent and function according to
the rule of law if they are to be equitable.

These core characteristics represent the ideal - and no society has them all. Even so,
UNDP believes that societies should aim, through broad-based consensus-building, to
define which of the core features are most important to them, what the best balance is
between the state and the market, how each socio-cultural and economic setting can move
from here to there.

UNDP is faced increasingly with post-crisis situations and disintegrating societies. For
them, the issue is not developing good governance - it is building the basic institutions of
governance. The first step is towards reconciliation - building society's ability to carry on
a dialogue on the meaning of governance and the needs of all citizens.

Good governance has 8 major characteristics. It is participatory, consensus oriented,

accountable, transparent, responsive, effective and efficient, equitable and inclusive and
follows the rule of law. It assures that corruption is minimized, the views of minorities
are taken into account and that the voices of the most vulnerable in society are heard in
decision-making. It is also responsive to the present and future needs of society.
Participation by both men and women is a key cornerstone of good governance All men
and women should have a voice in decision-making, either directly or through legitimate
intermediate institutions that represent their interests. Such broad participation is built on
freedom of association and speech, as well as capacities to participate constructively.
Participation could be either direct or through legitimate intermediate institutions or
representatives. It is important to point out that representative democracy does not
necessarily mean that the concerns of the most vulnerable in society would be taken into
consideration in decision making. Participation needs to be informed and organized. This
means freedom of association and expression on the one hand and an organized civil
society on the other hand.

Rule of law

Legal frameworks should be fair and enforced impartially, particularly the laws on human
rights.

Good governance requires fair legal frameworks that are enforced impartially. It also
requires full protection of human rights, particularly those of minorities. Impartial
enforcement of laws requires an independent judiciary and an impartial and incorruptible
police force.

Transparency

Transparency is built on the free flow of information. Processes, institutions and

information are directly accessible to those concerned with them, and enough information
is provided to understand and monitor them.

Transparency means that decisions taken and their enforcement are done in a manner that
follows rules and regulations. It also means that information is freely available and
directly accessible to those who will be affected by such decisions and their enforcement.
It also means that enough information is provided and that it is provided in easily
understandable forms and media.

Responsiveness

Institutions and processes try to serve all stakeholders. Good governance requires that
institutions and processes try to serve all stakeholders within a reasonable timeframe.

Consensus oriented

Good governance mediates differing interests to reach a broad consensus on what is in

the best interests of the group and, where possible, on policies and procedures.
There are several actors and as many view points in a given society. Good governance
requires mediation of the different interests in society to reach a broad consensus in
society on what is in the best interest of the whole community and how this can be
achieved. It also requires a broad and long-term perspective on what is needed for
sustainable human development and how to achieve the goals of such development. This
can only result from an understanding of the historical, cultural and social contexts of a
given society or community.

Equity and inclusiveness

All men and women have opportunities to improve or maintain their well-being. A
society’s well-being depends on ensuring that all its members feel that they have a stake
in it and do not feel excluded from the mainstream of society. This requires all groups,
but particularly the most vulnerable, have opportunities to improve or maintain their
well-being.

Figure 6
Characteristics of good governance

CONSENSUS
ORIENTED ACCOUNTABLE

TRANSPARENT
PARTICIPATORY

GOOD

GOVERNANCE

FOLLOWS THE RESPONSIBLE

RULE OF LAW
 EFFECTIVE AND EFFICIENT EQUITABLE AND
INCLUSIVE

Source: Governance for Sustainable Human Development A UNDP Policy

Document (1997)

Effectiveness and efficiency

Processes and institutions produce results that meet needs while making the best use of
resources.

Good governance means that processes and institutions produce results that meet the
needs of society while making the best use of resources at their disposal. The concept of
efficiency in the context of good governance also covers the sustainable use of natural
resources and the protection of the environment.

Accountability

Decision-makers in government, the private sector and civil society organizations are
accountable to the public, as well as to institutional stakeholders. This accountability
differs depending on the organization and whether the decision is internal or external to
an organization.

Accountability is a key requirement of good governance. Not only governmental

institutions but also the private sector and civil society organizations must be accountable
to the public and to their institutional stakeholders. Who is accountable to whom varies
depending on whether decisions or actions taken are internal or external to an
organization or institution. In general an organization or an institution is accountable to
those who will be affected by its decisions or actions. Accountability cannot be enforced
without transparency and the rule of law.

Strategic vision

Leaders and the public have a broad and long-term perspective on good governance and
human development, along with a sense of what is needed for such development. There is
also an understanding of the historical, cultural and social complexities in which that
perspective is grounded.
The World Bank on the other hand, cites 4 dimensions of governance which are: Public
Sector Management, Accountability, and Legal Framework for Development and
Transparency & Information

The World Bank’s interest in governance stems from its concern with the effectiveness of
the development efforts it supports. From this perspective, sound development
management is critical in ensuring adequate returns and efficacy of the programs and
projects financed and for the World Bank’s underlying objectives of helping countries
reduce poverty and promoting sustainable development growth.

Four Basic Elements of Good Governance according to ADB

ADB likewise regards governance as synonymous with sound development management.

It relates to governance to the effectiveness with which development assistance is used,
the impact of development programs and projects and the absorptive capacity of
borrowing countries. To address governance issues, the Asian Development bank has
built upon the approach of the World Bank and has identified four basic elements of good
governance:

1. Accountability

Accountability is imperative to make public officials answerable for government

behavior and responsive to the entity from which they derive their authority. This
maybe achieved differently in different countries or political structures, depending on
the history, cultural milieu, and value systems involved.

Accountability also means establishing criteria to measure the performance of public

officials, as well as oversight mechanisms to ensure that standards are met. The litmus
test is whether private actors in the economy have procedurally simple and swift
recourse for redress of unfair actions or incompetence of the executive authority.
Lack of accountability tends in time to reduce the state’s credibility as an economic
partner. It undermines the capacity of governments to sustain the long-term business
confidence essential for growth-enhancing private sector investment. Looked at from
this angle, accountability can help reduce sovereign risk.

The accountability of public sector institutions is facilitated by evaluation of their

economic and financial performance. Economic accountability relates to the
effectiveness of policy formulation and implementation, and efficiency in resource
use. Financial accountability covers accounting systems for expenditure control, and
internal and external audits.

2. Participation
 The principle of participation derives from an acceptance that people at the heart of
development. They are not only the ultimate beneficiaries of development but are also
the agents of development. In the latter capacity, they act through groups or
associations (e.g. trade unions, chambers of commerce, NGOs, political parties) and
as individuals. (e.g through letters to newspaper editors, participating in radio and
television talk shows, voting) . Since development is both for and by the people, they
need to have access to the institutions that promote it.

Participation is often related to accountability but not necessarily so. In representative

democracies, where citizens participate in government through the electoral process,
public officials are indeed accountable ultimately to the electorate. This may not be
the case however, in other political systems. For all economies though, the benefits of
participatory approaches can be considerable. These include improved performance
and sustainability of policies, programs, and projects as well as enhanced capacity
and skills of stakeholders.

At the grassroots level, participation implies that government structures are flexible
enough to offer beneficiaries and others affected, the opportunity to improve the
design and implementation of public programs and projects. This increases
“ownership” and enhances results. At a different level, the effectiveness of policies
and institutions impinging on the economy as a whole may require the broad support
and cooperation of major economic actors concerned. To the extent that the interface
between the public agencies and the private sector is conducive to the latter’s
participation in the economy, national economic performance will be enhanced.

Participation in economic life by agents other than the state would cover not only the
role of the private sector but also the activities of NGOs. These elements of civil
society offer an alternative means of channeling the energies of private citizens. They
can be helpful in identifying people’s interests, mobilizing public opinion in support
of these interests and organizing action accordingly. Being close to their constituents,
NGOs can provide governments with a useful ally in enhancing participation at the
community level and fostering a “bottom-up” approach to economic and social
development.

3. Predictability

Predictability refers to the existence of laws, regulations and policies to regulate

society; and their fair and consistent application. The importance of predictability
cannot be overstated since, without it, the orderly existence of citizens and institutions
would be impossible. The rule of law encompasses both well-defined rights and
duties, as well as mechanisms for enforcing them, and settling disputes in an impartial
 manner. It requires the state and its subsidiary agencies to be as much bound by and
answerable to, the legal system as are private individuals and enterprises.

The importance of rules-based systems for economic life is obvious. They are
essential component of the environment within which economic actors plan and take
investment decisions. To the extent, therefore, that legal frameworks help ensure that
1. business risks can be assessed rationally,
2. transaction costs are lowered and
3 governmental arbitrariness is minimized, they should prove conducive to risk
taking, growth and development. In an opposite scenario, the capricious application
of rules generates uncertainty and inhibits the growth of private sector initiatives.
Regulatory uncertainty also tends to raise the cost of capital by increasing the risk of
investment.

Besides legal and regulatory frameworks, consistency of public policy is also

important. Government policies affect the investment climate directly and economic
actors require reasonable assurance about the future behavior of key variables such as
prices, the exchange rates, and the employment levels. However, consistency does not
mean rigidity. Governments do need to respond flexibly to changing circumstances
and to make midcourse corrections as necessary. Also, when government’s change,
the successor administration will, understandably, want public policy to reflect its
priorities, rather those of its predecessor.

4. Transparency

Transparency refers to the availability of information to the general public and clarity
about government rules, regulations and decisions. Thus, it both complements and
reinforces predictability. The difficulty with ensuring transparency is that only the
generator of information may know about it, and may limit access to it. Hence, it may
be useful to strengthen the citizen’s right for information with a degree of legal
enforceability, for similar reasons. Broadly restrictive laws that permit public officials
to deny information to citizens need to provide for independent review of claims that
such denial is justified in the greater public interest.

Transparency in government decision making and public policy implementation

reduces uncertainty and can help inhibit corruption among public official. To this end,
rules and procedures that are simple, straightforward, and easy to apply are preferable
to those that provide discretionary powers to government officials or that are
susceptible to different interpretations.

In relation to the above-mentioned indicators/elements of good governance the Key

Dimensions and specific areas of actions are identified by ADB as provided on
 Table 2
Basic Elements of Good Governance

Basic Elements of Good Key Dimensions Specific Areas of Action

Governance
1. Accountability means Establishing criteria to Public Sector
making public officials measure performance of Management Public
answerable for public officials Enterprise Management
government behavior and Institutionalizing Public Financial
responsive to the entity mechanisms to ensure Management Civil
from which they derive that standards are met Service Reform
authority

2. Participation refers to Undertaking development Participation of

enhancing people’s for and by the people beneficiaries and affected
access to and influence groups Interface between
on public policy government and the
processes private sector
Decentralization of public
and service delivery
functions (empowerment
of Local Governments)
Cooperation with Non-
Government
Organizations
3. Predictability refers to Establishing and aw and development
the existence of laws, sustaining appropriate Legal Frameworks for
regulations and policies legal and institutional Private Sector
to regulate society and arrangements Observing Development
the fair and consistent and upholding the rule of
application of these law Maintaining
consistency of public
policies
4. Transparency refers to Ensuring access to Disclosure of Information
the availability of accurate and timely
Information to the general information about the
public and clear economy and government
government rules, policies
regulations, and decisions

Source: Asian Development Bank (2005) Country Governance Assessment

Institute On Governance Five Principles of Good Governance

The Five Good Governance Principles (See the reader volume for the discussions)
The UNDP Principles and related UNDP text on which they are based The Institute
on Governance has identified five principles of governance, using as basis the
UNDPs indicators of good governance.

1. Legitimacy and Voice

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

Consensus orientation – good governance mediates differing interests to reach a

broad consensus on what is in the best interest of the group and, where possible,
on policies and procedures.

2. Direction

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

3. Performance

Responsiveness – institutions and processes try to serve all stakeholders.

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

4. Accountability

Accountability – decision-makers in government, the private sector and civil

society organizations are accountable to the public, as well as to institutional
stakeholders. This accountability differs depending on the organizations and
whether the decision is internal or external.

Transparency – transparency is built on the free flow of information. Processes,

institutions and information are directly accessible to those concerned with them,
and enough information is provided to understand and monitor them.

5. Fairness
 Equity – all men and women have opportunities to improve or maintain their well
-being. Rule of Law – legal frameworks should be fair and enforced impartially,
particularly the laws on human rights.
As reflected on the discussions above, the different institutions and organizations
have their own indicators or criteria of good governance which they can apply in
their own organizations or as useful tool of government as measures in good
governance.

Evaluation
Critical Thinking Assessment
Essay
1.) Give your own definition of good governance.
2.) Describe each characteristic of good governance. You may cite examples of an entity that
shows some if not all elements of good governance and discuss why?
 Product-based assessment on the Collage

Lesson 4
Issues & Challenges on Governance

Specific Objectives
At the end of the lesson, the students should be able to:
1.) Describe the processes/factors pushing for governance and the capacities needed for good
governance;
2.) Highlight some of the key issues facing policy makers as they seek to advance the growth and
adoption of good governance in their domestic environment;
3.) Identify the key issues and questions where collaboration and cooperation are needed;
4.) Cite the different problems, challenges and issues encountered by the different actors in
governance e.g. the issue on corruption and the efforts to fight it at the supranational level.
5.) Discuss the trends, efforts and challenges for good governance; and
6.) Identify the lessons learned and recommend solutions to realize good governance.
PEDAGOGICAL ACTIVITIES
Panel Discussion
The students are required to formulate their own ideas/perspectives on the issues on governance.
After which, question and answer portion is allotted to give light to issues regarding the topic
and the teacher gives his/her synthesis at the end of lesson.
Survey/ Interview
Interview any stakeholder in governance and ask the issues and challenges that they encounter in
any particular governance efforts like policy formulation and implementation, advocacy,
technical assistance etc. The data and information will be used in the FGD to be conducted inside
the classroom.
Meta-Planning /Technology of Participation (TOP Method)
The students will be given the following focused questions:
1. What are the issues and challenges that confronts the different key players of governance
today?
2. What recommendations can you give to address these problems, issues and challenges?
The students will write, in bold letters their answers on a meta-card with a maximum of 8 words.
After which the group leader collects each meta-cards from the members and, together they will
cluster the answer and give corresponding labels.

Lecture Discussion
The teacher requests the posting of results on the blackboard. Then he/she reads the sentences
formulated and makes pertinent comments. Other Suggested Exercises and Activities The
following activities are lifted form The Social Artist's Field Handbook: Book One of Dr. Jean
Houston & Jan Sanders (2004). The teacher may opt to use this exercise inside the class to
facilitate creative and collaborative learning.
The teacher is advised to read about the trim tab factor and its parts namely: chaos theory, trim
tab, tipping point & keystone specie. This is to understand what each part means and in so doing,
be able to apply to principles in real situation.

The Trim Tab Factor

Chaos Theory
 9
In 1977, Ilya Prigogine won the Nobel Prize for his articulation of the Chaos Theory which
simply stated, is that, as a structure takes in more chaos and information, eventually a new
order of synthesis can, and will, emerge. One needs to watch for the bifurcation point in an
open system, often a place of quiet, a still point, or a vortex in which a higher level of
synthesis can emerge. This is a choice moment. It would be like knowing the moment was
right for “doing development differently”

Chaotic situations make us uncomfortable. They involve the unknown; they can be dangerous;
only the naïve, the idealistic, and the inexperienced believe all experiences and experiments
have a happy ending. We all want to be in an ordered society. Therefore, embracing chaos
requires conscious shift in our relationship to instability. Embracing chaos does not mean
abandonment to a willingness to support and promote all unknown factors or reckless
conditions. The Chaos theory requires a critical and balanced discernment of the social
situation in order to recognize when chaotic conditions are actually in the process of giving
rise to an emerging social order. Like plants emerging from the soil, a new social era does not
spring forth spontaneously, suddenly, without having established a foundation over a period of
time. Being able to sense the “still point”, to see the seeds, the emerging social trends, is, in
itself, a social art. The system transition point makes conditions optimal for “trim tab projects”

The Trim Tab

The Trim Tab Factor metaphor emerged from the fact that on the back of the rudder of a huge
ship there is much smaller rudder called trim tab. By moving the trim tab rudder even slightly,
the larger rudder is gradually moved, which in turn changes the direction of the massive ship.
This metaphor was applied by Bukminster Fuller to the challenge of turning massive
civilizations in a more positive direction. The social artist can use this metaphor persuasively
when trying to help organizations change.

“Under certain conditions, when a system is far from the equilibrium, creative individuals can
have an enormous impact, “says Margaret Wheatley. The initiatives, the projects of creative
individuals, in chaotic circumstances, have the leveraged effect of a ship’s trim tab, in bringing
forth the emerging social era. These initiatives may be in any area of society, culturally or
financially unfeasible. They typically involve a disenfranchised segment of the population.
The Grameen bank is a high-profile example of a trim tab project; begun in 1976 in
Bangladesh by Muhammad Yunus, it loans funds to over two million customers, 94% of them
women. In the 21st century, we see innovative initiatives involving women, youth, community,
education, culture and ecology.

The Tipping Point This is an image from biology and physics. In his bestseller, The Tipping
Point, Malcolm Gladwell points to the epidemic nature of social problems, from teenage
delinquency to traffic jams. He demonstrates that they are capable of spontaneous and often
very large and surprising reversals in direction. You can input a lot of effort over a lot of years

9
The activities above were introduced by Dr. Jean Houston, founder and program director of the
International Institute of Social Artistry during the trainor’s training on Decentralizing the Millennium
Development Goals Through Innovative Leadership: Using the Social Artistry”
in behalf of something and nothing much happens. Then you have some activity or
intervention at the right moment and swooping changes occur, affecting many other systems.
This happens in bacterial diseases which reach a point of overwhelming the immune system in
one last exponential multiplication or in a wave as it tips over to turn a ripple on the surface of
the water into a thundering wall that crashes onto the beach. The tipping point is the moment
of transformation from one form to another entity. Although the drama seems spontaneous,
such as a seed emerging through the ground, these transformations are actually the predictable
results of previous inputs, perhaps directed positively by trim tab projects.

Keystone Species

The Keystone Species are the anchors of the new society. Certain organizations or activities
are necessary for the existence of many other activities or organizations. A “keystone species”
is a species whose very presence contributes to a diversity of life forms and its extinction
would consequently lead to the extinction of many other forms of life. In the semi-fragile
prairie ecosystem, a colony of prairie dogs is a keystone species which support some two
hundred other species. In meeting the MDG for example, supporting strategic organizations
and activities can provide a stable environment for many associated initiatives which depend
upon them to thrive.

1. What is the current chaos around governance?

2. What is the keystone species?
3. What tipping point can we foresee?
4. What Trim Tab initiative would be most catalytic to realize the vision on good governance?
5. What is the role of each sector in the Trim Tab?
6. What is my role in the Trim Tab?

VALUES TO CONSIDER IN SELECTING A TRIM TAB PROJECT:

1. Fosters Multi-Sectoral Partnerships
2. Fosters Multi-Cultural Partnerships
3. Use Social Artistry Leadership
4. Use a Decentralized Approaches Involving Sub-National Levels of Government
5. Demonstrates or supports the National Action Plan

Lesson Proper
FACTORS/PROCESSES PUSHING FOR GOVERNANCE
The International Monetary Fund (IMF) identified several factors/processes pushing for
governance, good governance, in particular. These are:
1. the quest for growth and development
2. the environmental movement
3. globalization
4. consolidation

1. The Quest for Growth & Development

This is the key factor pushing for governance. Since the Industrial Revolution, the market had
the principle role in growth, with the state needed only to nurture the climate that would allow it
to grow. However, the quarter century after World War II swung the pendulum to the state. In the
West, John Maynard Keynes gave theoretical justification for the state to manipulate price
signals and fight unemployment and business downswings. Meanwhile, the socialist states
installed and consolidated central planning systems.

In the Third World, the state also reigned supreme as the principal planner, energizer, promoter
and director of the accelerated development effort” (Lewis, 1964:26). In the attempt to assume a
central role in planning for the whole economy and society but also to create its own enterprises.
However, at its best, the state had to saddle these economic institutions with social functions,
making it difficult to compete on equal terms in the economy. At the extreme, elite control of the
enterprises or of the state itself made them subject to rent seeking and corruption, leading to
losses that were shouldered not by those responsible for them, but all taxpayers in a country. In
many states where the taxation system was regressive, the losses were borne primarily by the
poor.

Thus, a quarter century of the interventionist’s state saw a widespread dissatisfaction about it
from all fronts. In the First World, the trigger was the burgeoning welfare bill, in the Second
World, the failure of state planning symbolized by the collapse of the Soviet Union, and in the
Third World, the inability of states, even when achieving some economic prosperity, to check
growth of inequality and poverty in their territories. Governmental rent seeking, inefficiency and
corruption led the demands for privatization, which pushed the state away from its central role.
However, the private sector by itself could not consider the distributional questions that led to the
rethinking of development as economic growth in the first place.
The inability of economic gains to produce acceptable levels or redistribution, poverty reduction
and political freedoms woke up civil society. But they could criticize government and set up
alternative delivery systems but could not provide nationwide coverage. Similarly, they decried
the private sweatshops but could not set up the industries to take their place. Clearly, no one
sector could manage society by itself but each had a role to play in making it move forward.

2. The Environmental Movement

The concept of development has changed from the exclusive focus on economic growth of the
1950s to the inclusion of distributional goals like the reduction of poverty and inequality during
the UN Development Decades, to the current battle cry for “sustainable human development”.
Although SHD as a term is espoused primarily by the United Nations, its incorporation of
concerns for people and nature not only for the present but also for later generations is now
widely accepted by state, market and civil society worldwide. People-centeredness as an aspect
of development recognized that growth alone may affect human lives adversely. Therefore, the
concern for people must be central and not just be a by-product or a trickling down of economic
achievement. The incorporation of nature into the equation owes much to the environmental
movement which brought home the point that everyone is indeed only one planet, and the
depletion of resources in one area is felt in a real way in all areas. There is no dichotomy
between people and nature, however, because the preservation of the environment is itself a
pledge to care for generations of people yet unborn who must also be allowed to enjoy and care
for the biodiversity, beauty and wealth of the planet as a proper habitat for all creation.

The environmental movement has provided to governance an urgency to deal with issues in a
holistic manner, to include not only the sector at hand and the obvious stakeholders, but also
other affected by them in other areas and in future times 10 . It has forced a redefinition of the
public interest with nature itself as a recognized stakeholder. It has pressured private firms to
consider ecological effects of their products-even goods as useful and popular as cars have come
under close scrutiny for their lead emissions, for their greedy use of non-replaceable fuels, for
the noise and traffic they cause that debase the quality of these aspects, and firms both for profit
and non-profit to race for alternative, ecologically acceptable solutions. The state has also been
pressed to consider new regulatory laws and deregulation of the economy. If nothing else, the
ecological movement has underscored the point that no one sector can manage the demands of
society- and the environment- all by itself.

10
The Environmental Movement (a term that sometimes includes the conservation and green movements) is a
diverse scientific, social, and political movement. In general terms, environmentalists advocate the sustainable
management of resources, and the restoration and protection of the natural environment through changes in
public policy and individual behavior. In its recognition of humanity as a participant in (not enemy of) ecosystems,
the movement is centered on ecological and human health.
3. Globalization
The global context*11

The transformation from command to market-oriented economies, the emergence of democratic

political regimes in the former Soviet Union, the rapid development and global proliferation of
new technologies, the pervasive spread of telecommunications systems, the growing importance
of knowledge-based industries and skills and the continuing integration of the world economy
through trade and investment - all these have created the foundation for a new age of sustainable
human development. But all carry risks as well. Is it to be a breakthrough or a breakdown?

Changes in the world's economic, political and social systems have indeed brought
unprecedented improvements in human living conditions in both developed and developing
countries. Consider the profound breakthroughs in communications, transport, agriculture,
medicine, genetic engineering, computerization, environmentally friendly energy systems,
political structures, peace settlements. The list goes on. But these changes also bring new
uncertainties and challenges as the world steps into the 21st century. Signs of breakdown are
everywhere: disintegration of families; destruction of indigenous societies; degradation and
annihilation of plant and animal life; pollution of rivers, oceans and the atmosphere; crime,
alienation and substance abuse; higher unemployment; and a widening gap in incomes and
capabilities. Not a pretty picture.

The trend towards globalization deserves special attention. It is manifest in the growth of
regional blocs that cooperate in such areas as trade and legal frameworks, in the power of
intergovernmental bodies such as the World Trade Organization and in the spread of
transnational corporations. Globalization has profound implications for governance the final
impact of which we cannot yet determine. First is the increasing marginalization of certain
population groups. Those who do not have access to the technological/information revolution are
in danger of becoming part of a structural underclass. Second is the erosion of state sovereignty
as transnational bodies increasingly mediate national concerns and press for universal laws.
Third is the increased globalization of social and economic problems, such as crime, narcotics,
infectious diseases and the migration of labor. Finally, international capital and trade are
decreasingly accountable to sovereign states.

Governance can no longer be considered a closed system. The state's task is to find a balance
between taking advantage of globalization and providing a secure and stable social and economic
domestic environment, particularly for the most vulnerable. Globalization is also placing

11
* The discussion on Globalization is elaborated in the World Economic Outlook, International Monetary Fund,
Washington D.C., May 2000 and in www.imf.org/external/np/exr/ib/2000/041200.htm
governments under greater scrutiny, leading to improved state conduct and more responsible
economic policies. Because each domain of governance - state, private sector, civil society - has
strengths and weaknesses, the pursuit of good governance requires greater interaction among the
three to define the right balance among them for sustainable people-centered development.
Given that change is continuous, the ability for the three domains to continuously interact and
adjust must be built-in, thus allowing for long-term stability. UNDP's Initiatives for Change
recognizes that the relationships among government, civil society and the private sector:

..are key determinants in whether a nation is able to create and sustain equitable
opportunities for all of its people. If a government does not function efficiently and
effectively, scarce resources will be wasted. If it does not have legitimacy in the eyes of
the people, it will not be able to achieve its goals or theirs. If it is unable to build
national consensus around these objectives, no external assistance can help bring them
about. If it is unable to foster a strong social fabric, the society risks disintegration and
chaos. Equally important, if people are not empowered to take responsibility for their
own development within an enabling framework provided by government, development
will not be sustainable.

Developing countries must ensure that everyone can participate in economic and social
development and take advantage of globalization. They must build a political system that
encourages government, political, business and civic leaders to articulate and pursue
objectives that are centered around people and a system that promotes public consensus
on these objectives.

The term "globalization" has acquired considerable emotive force. Some view it as a
process that is beneficial—a key to future world economic development—and also
inevitable and irreversible. Others regard it with hostility, even fear, believing that it
increases inequality within and between nations, threatens employment and living
standards and thwarts social progress. This brief offers an overview of some aspects of
globalization and aims to identify ways in which countries can tap the gains of this
process, while remaining realistic about its potential and its risks.

Globalization offers extensive opportunities for truly worldwide development but it is not
progressing evenly. Some countries are becoming integrated into the global economy
more quickly than others. Countries that have been able to integrate are seeing faster
growth and reduced poverty. Outward-oriented policies brought dynamism and greater
prosperity to much of East Asia, transforming it from one of the poorest areas of the
world 40 years ago. And as living standards rose, it became possible to make progress on
democracy and economic issues such as the environment and work standards.
 Undersecretary Luis C. Liwanag of DBM highlighted that one of the greatest challenges
that is confronted in any development efforts today is globalization 12 . Globalization has
been criticized for having a lopsided inclination towards rich and developed countries. It
has also been said that globalization impinges on nation-states sovereignty and territory
since the dominant players weaken the power and influence of individual nation-states,
particularly the Third World Countries and those that are not linked to the regional
trading blocs. With globalization, we are bounded by foreign economic policies and by
agreements between member nations.

Economic "globalization" is a historical process, the result of human innovation and

technological progress. It refers to the increasing integration of economies around the
world, particularly through trade and financial flows. The term sometimes also refers
to the movement of people (labor) and knowledge (technology) across international
borders. There are also broader cultural, political and environmental dimensions of
globalization that are not covered here.

At its most basic, there is nothing mysterious about globalization. The term has come into
common usage since the 1980s, reflecting technological advances that have made it
easier and quicker to complete international transactions - both trade and financial flows.
It refers to an extension beyond national borders of the same market forces that have
operated for centuries at all levels of human economic activity - village markets, urban
industries, or financial centers.

Markets promote efficiency through competition and the division of labor—the

specialization that allows people and economies to focus on what they do best. Global
markets offer greater opportunity for people to tap into more and larger markets around
the world. It means that they can have access to more capital flows, technology, cheaper
imports, and larger export markets. But markets do not necessarily ensure that the
benefits of increased efficiency are shared by all. Countries must be prepared to embrace
the policies needed, and in the case of the poorest countries may need the support of the
international community as they do so.

As globalization has progressed, living conditions (particularly when measured by

broader indicators of well-being) have improved significantly in virtually all countries. 13
This was presented by Undersecretary Luis Liwanag in his paper presentation entitled
“The Role of Public Administration in Governance” on the National Conference on
Public Administration and the Millennium Development Goals in October 2004.
However, the strongest gains have been made by the advanced countries and only some
of the developing countries. That the income gap between high-income and low-income

12
This was presented by Undersecretary Luis Liwanag in his presentation entitled “The Role of Public
Administration in Governance” on the National Conference on Public Administration and the Millenium
Development Goals in October 2004.
13
Sources: www.imf.org/external/np/exr/ib/2000/041200.htm
 countries has grown wider is a matter for concern. And the number of the world’s citizens
in abject poverty is deeply disturbing. But it is wrong to jump to the conclusion that
globalization has caused the divergence, or that nothing can be done to improve the
situation. To the contrary: low-income countries have not been able to integrate with the
global economy as quickly as others, partly because of their chosen policies and partly
because of factors outside their control. No country, least of all the poorest, can afford to
remain isolated from the world economy. Every country should seek to reduce poverty.
The international community should endeavor—by strengthening the international
financial system, through trade, and through aid—to help the poorest countries integrate
into the world economy, grow more rapidly, and reduce poverty. That is the way to ensure
all people in all countries have access to the benefits of globalization.

4. Consolidating Peace

Another force pressing for governance is the need to consolidate peace in wartorn
nations. This issue is rarely recognized as among the processes pushing for governance.
However, this unique perspective was brought to the force dramatically by Hage
Geingob, Prime Minister of Namibia, in his remarks to the World Cog. Countries that
have undergone a civil war, secession movements or the creation of a new state out of the
break-up of national territories have a specially strong imperative to get everyone
involved in the process of building a nation or affecting a national reconciliation. In these
situations, the coming together of the state, market and civil society to manage societal
affairs is not more rhetoric but a national urgency. It requires bringing together former
adversaries beyond the discussion table to the fields of service in the cities and farms
including those which were battlegrounds. This is not only a lesson learned in Namibia.

In a recent study in Mali, Uganda, Thailand, Guatemala and the Philippines, as countries
emerging from internal conflict, all found governance particularly, decentralizing
governance-was necessary to make concrete the commitments of all protagonists for
peace. It entailed capacity building not only for state agencies in dealing with former
rebels, but also leadership and political skills training for those former combatants so that
they may take up social responsibilities side by side with their military and civilian
counterparts.

It required the private sector to regard them with new eyes, as potential producers and
consumers and therefore part of the market also (UNDP, 2000:25-34) They were
acknowledged as members of civil society even as other organizations of that sector also
recognized their role in affecting changes in governance for all and not only for former
adversaries. As Prime Minister Geingob stated, the tasks of nation building must be seen
 by all as their responsibility and the resulting peace and development their common
ownership.

KEY ISSUES and CHALLENGES IN GOVERNANCE

The Philippine Experience
1. Policy Issues, Concerns, and Challenges
Most people agree that the constitutional and legal frameworks in the Philippines provide the
foundations for good governance. The policy environment allows people’s participation and
public scrutiny and criticism of government operations and outputs. Further, the country has
adequate laws, rules, and regulations to establish order and move forward. While
underdevelopment can easily be attributed to a lack of institutional capacity and professional
competencies to implement policies and enforce laws, certain lessons learned and issues related
to public policy making deserve mention.
The Philippine public policy-making process bears the following features:
(i) policy decisions and programs are arrived at through institutional mechanisms
provided for in the Constitution of the Republic of the Philippines and other laws;
(ii) policy-making process is then characterized as precedent bound, based on laws and
forged by such structures as a bicameral legislative body and the executive branch of
the Government;
(iii) legislative branch is composed of the Senate and the House of Representatives, while
the president heads the executive branch of the Government and is the prime initiator
and implementer of policies and programs; and
(iv) the decisions of the legislative and executive branches are subject to judicial review
by the Supreme Court and inferior courts on questions of constitutionality and
statutory construction.

Different sets of forces each influence the different stages of public policy making, namely,
decisions on
(i) including items in the agenda,
(ii) developing any particular agenda item,
(iii) passing legislation, and
(iv) implementing new laws. Different constituencies exert their influences at different
stages of policy development and execution. Many policies have nonetheless missed
out in giving importance to meaningful public consultations, constructive debate and
criticism, and needed consensus building and development of a sense of ownership of
different stakeholders. Without these elements, and with extensive graft and
 corruption in the country (which undermines and subverts the rule of law), many
policies fail to command respect and compliance.

It should also be made clear that policy initiatives for governance reforms could be undertaken
by the Government even without legislation. In these cases, one might consider whether
legislation is useful or not. The value of legislation is that it binds public institutions to certain
decreed directions. If one wants to assure the future 10 An excerpt from Country Governance
Assessment, (2005) 58 sustenance of any initiative currently carried out by the Government,
legislation may be considered. However, the Government tends to be too legalistic and rule
bound in addressing most of its problems.

Legislation is complicated, not under the complete control of any person or group, and may have
unpredictable results. Embarking on a campaign to get something legislated cannot be a decision
taken lightly or casually. In addition, successful legislation generally occurs when the problems
deemed important meet the solutions deemed highly probable by political personalities or groups
in positions of power. Problems, policies, and politicians have to intersect for proper action to
occur.

Legislation as an instrument for achieving desirable societal goals and institutionalizing reforms
is advisable when the underlying assumptions of policies have any or all of the following
characteristics:
(i) policies can only be optimally effective when adopted by the whole Government and
supported by stakeholders;
(ii) policies can yield best results only when implemented over the life of several
administrations;
(iii) policies can be accomplished only with adequate and judicious use of resources;
(iv) policies can be accomplished by the Government’s applying cost-effective measures and
using available technology and resources;
(v) policies, when deliberated and agreed, would create a framework for many people and
groups to assume broader responsibilities on an institutional basis.

A policy needs to be very clear and specific about the:

(i) nature and magnitude of the problem being addressed;
(ii) basic mechanism for responding to the problem;
(iii) standards and provisions for making the mechanism work;
(iv) system of responsibilities and accountabilities for coordination, implementation,
control, and review of results; and (v) organizational and budgetary implications.
 These elements are often deficient in many public policies. It is common to have
layers of rules and regulations to clarify policy provisions, not to mention sets of
procedures to inform and guide implementers and stakeholders.

Some policy initiatives may not be ready to be pursued because the data and analysis
necessary to make a decision may be unavailable. In these cases, research is probably
more appropriate than formulating a new policy or draft legislation. Some policies are
haphazardly and hastily developed and scarcely take into account deliberate and
careful planning and effective use of objective and accurate information. Public
policy making in the Philippines boldly underscores the need to improve its capacities
in undertaking knowledge-based policy analysis and development. Access to timely
and correct information about public policies also precludes overall efficiency,
effectiveness, and productivity. Those who are affected may sometimes be unaware of
or improperly informed about their rights, duties, and responsibilities provided for in
relevant policies.

2. Problems in the Bureaucracy

Bureaucracy is a distinctive arrangement used by human beings to organize their

activities. The invention of Western bureaucracy several centuries ago helped solve the
problem for leaders of governing human systems that grew larger and more complicated
with each passing year. The great virtue and probably defining characteristic of
bureaucracy, according to the one of the founders of sociology, German Max Weber
(1864-1920), is as “an institutional method for applying general rules to specific cases,
thereby making the actions of government fair and predictable” However, in the
governance process, there are two problems in a bureaucratic type of government:
inefficiency and arbitrariness.

For nearly half a century, the Philippines was caught in an endless cycle of reform
exercises that hardly produced tangible and lasting results. Structural issues— such as
(i) duplicated functions and overlapped jurisdictions,
(ii) outdated and slow government procedures,
(iii) various loopholes in administrative procedures, and
(iv) limited capacity for policy analysis and strategic long-range planning that caused
delays and higher costs in handling business—made maintaining objectivity,
accountability, and transparency in decision making and government operations
difficult and gave rise to a host of other problems, including poor implementation
and coordination. (ADB, 2005).

As reflected in the Country Governance Assessment, (2004) Administrative reform

efforts in the Philippines did not fully succeed because of the following:
 (1.) lack of acceptance of and commitment to the need for reform by political authorities
and different affected entities;
(2.) lack of stakeholder appreciation and agreement concerning administrative reform
being a long, strategic, and continuous process;
(3.) lack of understanding that reform objectives are specific, measurable, realistic, and
time bound;
(4.) lack of good reform implementation strategies and adequate resources to carry them
out;
(5.) lack of an established central agency tasked with formulating, coordinating, and
monitoring reforms and providing corrective measures;
(6.) lack of reform procedures and regulations that are fairly and consistently applied;
(7.) lack of meaningful stakeholder participation in the entire reform process;
(8.) lack of strong and sustained support of political leaders;
(9.) lack of an established and enforced system of accountabilities; and
(10.) lack of safety nets for groups and individuals who may be disenfranchised by
interventions.

In the Common country Assessment of the Philippines (2004), an inefficient bureaucracy

is one of the major problems and an area for development cooperation 14. Past Philippine
administrations have carried out reorganization and reengineering schemes for the
bureaucracy, in an effort to improve efficiency and reduce corruption.

Studies about Philippine civil service system point to several deficiencies include: (1.)
Weak mechanisms for planning, agenda setting and policy-making; (2) Failure to
implement and maintain an appropriate performance management and measurement
system; (3) Overlapping and duplicating government functions and activities; (4.)
Overemphasis on rules and procedures rather than direct resource management towards
the realization of intended outcomes and impacts; (5.) A highly politicized bureaucracy
(6.) Lack of required managerial and technical expertise

2.1. Corruption

14
The Common Country Assessment (CCA) is an in-depth analysis of the development problems in the Philippines,
undertaken through a participatory process of consultations among United Nations agencies, its development
partners both in the government and civil society, and with other donor agencies in the country. It builds upon the
programme of reform launched by the UN Secretary-General in 1997, preparing the UN for the challenges of the
21st century and emphasizing its mandate in developing standards and goals arising from UN conventions and
global conferences. In particular, the CCA was driven by the principles and goals of the Millennium Declaration,
especially the Millennium Development Goals (MDGs). It also builds on the development objectives of the
Government of the Philippines, articulated in its Medium Term Development Plan as well as commitments made in
the context of international conventions, conferences and protocols
Corruption damages the development process in many ways. It undermines social
confidence in the willingness and capacity of public institutions to fulfill their obligations
to the people and it reinforces existing power relationships that are themselves typically
part of the development problem. Losses due to corruption deepen poverty as they
deprive the disadvantaged sectors of much needed programmes and environmental
stewardship. Incidences of bribery and graft are often front-page news, leading the public
to perceive them as the norm rather than the exception in government transactions,
further reducing the incentive or willingness to increase taxpayer compliance.

The Government has recently introduced affirmative actions toward addressing this
problem such as the passage of the Procurement Act, the implementation of lifestyle
check among government officials, and the reactivation of the Inter-Agency Anti-
Corruption Committee (IAGCC) to synchronize the various anti-corruption initiatives of
the national government. Despite these efforts, large scale and petty corruption is
pervasive throughout various levels of the Philippine government. The draft report of the
“Consultations on the UN Conference on Financing for Development cited that out of a
total national budget of Php 781 billion in 2001, PhP100 billion, or 13% was at risk of
being lost to corruption; 70% involved in public works contracts while 30% involved the
purchase of supplies and equipment. The Office of the Ombudsman estimated that a total
of USD48 billion was lost to graft and corruption over the past 20 years, and that only
60% of the national budget was actually spent on government programmes and projects.

Numerous laws addressing graft and corruption exist in the Philippines, and these dates
back to 1955. At present, the main references are the Revised Penal Code of 1960,
referred to as the Anti-Graft and Corrupt Practices Act, and Article XI of the 1987
Constitution of the Republic of the Philippines. Box 1 presents a summary list of related
laws, presidential decrees and proclamations, and other regulations on corruption
prevention.

Box 1: List of Laws Related to Graft and Corruption

1946–1971

• Republic Act (RA) 1379 (1955). This act declared forfeiture in favor of the state any
property found to have been unlawfully acquired by any public officer or employee,
and provided for the proceedings.
• RA 3019 (1960). This act provided for the repression of certain acts of public officers
and private persons alike, which constitute graft or corrupt practices or which may lead
thereto, also known as Anti-Graft and Corruption Practices Act.
• RA 6028 (1969). This act provided for the promotion of higher standards of
efficiency and justice in the administration of laws as well as to better secure the right
of the people to petition the government for redress of grievances, creating the office of
the citizen’s counselor.

1972–1986

• Presidential Decree (PD) 6 (1972). This decree amended certain rules on discipline of
government officials and employees.
• PD 46 (1972). This decree made it punishable for public officials and employees to
receive and for private persons to give gifts on any occasion, including Christmas.
• PD 677 (1975). This decree amended Section 7 of RA 3019 (as amended).
• PD 749 (1975). This decree granted immunity from prosecution to givers of bribes
and other gifts and to their accomplices in bribery and other graft cases against public
officers.
• PD 807 (1975). This decree provided for the organization of the Civil Service
Commission, in accordance with provisions of the Constitution of the Republic of the
Philippines (repealed under President Aquino’s administration).
• PD 1606 (1978). This decree revised PD 1486 (creating a special court to be known
as Sandiganbayan—the main antigraft court that adjudicates criminal cases brought to
it by the Office of the Ombudsman (OMB); it deals only with cases filed against high-
ranking government officials.

1987–Present

• 1987 Constitution of the Republic of the Philippines. Article XI, Accountability of

Public Officers; Article II, Section 27 and Section 28 policy of the State to maintain
honesty and integrity in the public service and take positive and effective measures
against graft and corruption; and Article III, Section 7, provides for the right of people
to have access to public information.
• 1987 Administrative Code (Executive Order [EO] No. 292). This code instituted the
administrative code of the Philippines.
• EO 243 (1987). This order created OMB and restated its composition, powers,
functions, and other salient features in the 1987 Constitution of the Republic of the
Philippines.
• RA 6713 (1989). This act established a Code of Conduct and Ethical Standards for
Public Officials and Employees.
• RA 6770 (1989). This act provided for the functional and structural organization of
OMB and delineated its powers and functions.
• RA 7055 (1991). This act strengthened civilian supremacy over the military by
returning to the civil courts the jurisdiction over certain offenses involving members of
the armed forces, other persons subject to military law, and members of the Philippine
National Police.
• RA 7080 (1991). This act defined and penalized the crime of plunder.
• RA 8249 (1997). This act further defined the jurisdiction of the Sandiganbayan,
amending PD 1606 (as amended).
• Proclamation 189 (1999). This proclamation declared war against graft and
corruption and authorized the Philippine Jaycee Senate, through the Graft Free
Philippines Foundation, Inc., to institutionalize public awareness of clean, efficient,
and honest governance.
• EO 317 (2000). This order prescribed a code of conduct for relatives and close
personal friends of presidents, vice-presidents, and members of the Cabinet
• EO 12 (2001). This order created the Presidential Anti-Graft Commission and
provided for its powers, duties, and functions and for other purposes to investigate
complaints or hear administrative cases filed against presidential appointees.
• EO 25 (2001). This order established The Governance Advisory Council to encourage
more active involvement of the business sector in curbing graft and corruption.
• Code of Corporate Governance (2002). This code further provided to actively
promote corporate governance reforms aimed to raise investor confidence, 63 develop
capital market, and help achieve high sustained growth for the corporate sector and the
economy.
• Code of Judicial Conduct (1989). This code provided for the appropriate conduct of
judges in performing their duties; otherwise known as the Code of Judicial Conduct.
• RA 9160 (2001). This act defined the crime of money laundering and provided for the
penalties of such act.
• RA 9184 (2002). This act provided for the modernization, standardization, and
regulation of procurement activities of the Government, also known as the Government
Procurement Reform Act.
• EO 38 (2001). This order reorganized and extended the life of the Special Task Force
created under EO 156 dated 7 October 1999 entitled "Creating a Special Task Force to
Review, Investigate and Gather Evidence Necessary to Successfully Prosecute
Irregularities Committed at the Bureau of Internal Revenue, Bureau of Customs and
Other Government Offices or Agencies Under or Attached to the Department of
Finance.”
• EO 40 (2001). This order consolidated procurement rules and procedures for all
national government agencies, government-owned or -controlled corporations, and
government financial institutions, and required the use of the Government electronic
procurement system. • EO 72 (2002). This order rationalized the agencies under or
attached to the Office of the President.
• EO 109 (2002). This order streamlined the rules and procedures on the review and
approval of all contracts of departments, bureaus, offices, and agencies of the
Government including government-owned or controlled corporations and their
subsidiaries.
• EO No. 114 (2002). This order restructured the Bureau of Internal Revenue toward a
Taxpayers’ Focused Organization.
• EO No. 251 (2003) This order required the Bureau of Internal Revenue to furnish
OMB with income tax returns filed.
• RA 9194 (2003). This act amended RA 9160 (Anti-Money Laundering Act). Source:
http://www.tag.org.ph/phillaw
 Corruption is becoming global. Hence, anti corruption efforts also require a global action.
It is in this premise that the United Nation Convention Against AntiCorruption (UNCAC)
is being pushed for ratification by UN member states 15. Dimitri Vlassis (2006) in his
discussions on UNCAC highlighted four elements of anti-corruption which include:

Box 2 United Nations Convention on Anti-Corruption

I. Prevention Corruption can be prosecuted after the fact, but first and
foremost, it requires prevention.

An entire chapter of the Convention is dedicated to prevention, with

measures directed at both the public and private sectors. These include
model preventive policies, such as the establishment of anticorruption
bodies and enhanced transparency in the financing of election campaigns
and political parties. States must endeavor to ensure that their public
services are subject to safeguards that promote efficiency, transparency and
recruitment based on merit. Once recruited, public servants should be
subject to codes of conduct, requirements for financial and other
disclosures, and appropriate disciplinary measures. Transparency and
accountability in matters of public finance must also be promoted, and
specific requirements are established for the prevention of corruption, in the
particularly critical areas of the public sector, such as the judiciary and
public procurement. Those who use public services must expect a high
standard of conduct from their public servants. Preventing public corruption
also requires an effort from all members of society at large. For these
reasons, the Convention calls on countries to promote actively the
involvement of nongovernmental and community-based organizations, as
well as other elements of civil society, and to raise public awareness of
corruption and what can be done about it. Article 5 of the Convention
enjoins each State Party to establish and promote effective practices aimed
at the prevention of corruption.

2.Criminalization

The Convention requires countries to establish criminal and other offences to

cover a wide range of acts of corruption, if these are not already crimes under

15
Dimitri Vlassis from The United Nations Office of Drugs & Crime with headquarters in Vienna conducted a
Trainor’s Training on UNCAC at the UP National College of Public Administration and Governance on August 31-
September 1, 2006 with the end in view of ratifying the UNCAC in the Philippines. UNCAC is the first global
instrument to fight corruption. In the Philippines however, UNCAC has not yet been ratified. See the Reader
Volume of Governance & Development for the full text of the UNCAC
 domestic law. In some cases, States are legally obliged to establish offences; in
other cases, in order to take into account differences in domestic law, they are
required to consider doing so. The Convention goes beyond previous
instruments of this kind, criminalizing not only basic forms of corruption such
as bribery and the embezzlement of public funds, but also trading in influence
and the concealment and laundering of the proceeds of corruption. Offences
committed in support of corruption, including money-laundering and
obstructing justice, are also dealt with. Convention offences also deal with the
problematic areas of private-sector corruption.

3. International cooperation

Countries agreed to cooperate with one another in every aspect of the fight
against corruption, including prevention, investigation, and the prosecution of
offenders. Countries are bound by the Convention to render specific forms of
mutual legal assistance in gathering and transferring evidence for use in court,
to extradite offenders. Countries are also required to undertake measures which
will support the tracing, freezing, seizure and confiscation of the proceeds of
corruption.

4. Asset recovery

In a major breakthrough, countries agreed on asset-recovery, which is stated

explicitly as a fundamental principle of the Convention. This is a particularly
important issue for many developing countries where high-level corruption has
plundered the national wealth, and where resources are badly needed for
reconstruction and the rehabilitation of societies under new governments.
Reaching agreement on this chapter has involved intensive negotiations, as the
needs of countries seeking the illicit assets had to be reconciled with the legal
and procedural safeguards of the countries whose assistance is sought.

Several provisions specify how cooperation and assistance will be rendered. In

particular, in the case of embezzlement of public funds, the confiscated
property would be returned to the state requesting it; in the case of proceeds of
any other offence covered by the Convention, the property would be returned
providing the proof of ownership or recognition of the damage caused to a
requesting state; in all other cases, priority consideration would be given to the
return of confiscated property to the requesting state, to the return of such
property to the prior legitimate owners or to compensation of the victims.

Effective asset-recovery provisions will support the efforts of countries to

redress the worst effects of corruption while sending at the same time, a
message to corrupt officials that there will be no place to hide their illicit assets.
Accordingly, article 51 provides for the return of assets to countries of origin as
a fundamental principle of this Convention. Article 43 obliges state parties to
extend the widest possible cooperation to each other in the investigation and
 prosecution of offences defined in the Convention. With regard to asset
recovery in particular, the article provides inter alia that "In matters of
international cooperation, whenever dual criminality is considered a
requirement, it shall be deemed fulfilled irrespective of whether the laws of the
requested State Party place the offence within the same category of offence or
denominate the offence by the same terminology as the requesting State Party,
if the conduct underlying the offence for which assistance is sought is a
criminal offence under the laws of both States Parties.

The Convention also covers many critical issues related to corruption, and this
is evident in some of its provisions:

Article 5 stresses the importance of critical issues of transparency and

accountability in national legal systems.

Article 9 explicitly focuses on public procurement and calls upon public

authorities to “take the necessary steps to establish appropriate systems of
procurement, based on transparency, competition and objective criteria in
decision-making, that are effective, inter alia, in preventing corruption”.

Article 10 highlights the issue of secrecy in public administration and calls for
actions to secure greater freedom of information.

Article 11 calls upon Governments to safeguard the integrity and independence

of the judiciary by preventing opportunities for bribery.

Article 12 expressly raises issues of corporate governance by calling for

strengthened regulatory and legal actions to curb private-sector corruption.

Article 14 hones in on anti-money laundering matters to boost prevention,

strengthen reporting and tighten regulation of financial institutions.

Articles 15 and 16 bluntly decry the bribery of national and foreign government
officials and call for actions to stop such practice.

Article 33 underscores the need to protect people who report acts of corruption.

Article 43 stresses the need for international cooperation to curb corruption and
calls for strengthened actions.

Source: http://www.unodc.org/unodc/en/crime_convention_corruption.html

9. Issue on Public Fiscal Management

 Another issue on good governance is on public fiscal management. Prior to government
reform programmes, there were weaknesses and constraints in fiscal management,
especially in the budgeting process. Some of these constraints are still lingering.

Recognizing the impact that the fiscal condition has on macroeconomic stability, the
government should continue to give priority to raising revenues and improving the
efficiency of the bureaucracy so that more and better-quality public service can be
delivered.

Following the onset of the Asian financial crisis, the Philippines government’s deficit
deteriorated quickly, mainly due to slippages in revenue collection. The major causes of
the decline include the following:
1. Tax evasion and weakness in the tax structure.
2. The private corporate and banking sectors which are major contributors to the national
coffers were weighed down by nonperforming assets.

Box 3. Tax revenues

Tax revenues as a share of GDP, fell from 13.9 % in 2000 to 13.5% in 2001. About
PhP150 billion is lost to tax evasion, PhP92 billion of which constitutes uncollected
income tax. In succeeding years, these translated into higher debt service payments,
which along with the non-passage of important tax measures, created a vicious cycle of
higher deficit and debt. Recognizing the major causes of declining revenue collection,
the government began in 2002 to implement reforms in both the Bureau of Internal
Revenue and Bureau of Customs. On the expenditure side, expenditure reduction
programs were also put in place, such as the Government electronic Procurement
System. Moreover, the passage of Dept Cap Act is expected to ease the problem or
rising interest payments.

Source: UNDP (2004) A Common View, A Common Journey, A Common Country

Assessment of the Philippines. http://www.undp.org.ph/?link=6

4 Deficiencies in the Political and Electoral System

Public confidence in election outcomes is low because of widely alleged irregularities in

the Philippine electoral processes. The modernization of the electoral system in the
country today is an attempt to enhance public confidence in election outcomes and
address traditional election anomalies such as cheating, intimidation and bribery. The
government has initiated concrete efforts to institutionalize electoral reforms through the
 passage of laws on Election Modernization (see appendix for the full text of the Election
Modernization Act or RA 8436), Party-List System and the Absentee Voting for Overseas
Filipinos1613. A democratic and effective political and electoral system is important to
ensure that a development agenda, primarily addressing the needs of poor and
disadvantaged, is promoted and sustained beyond administrations. Civil society
organizations are currently working with their government counterparts of pending
reform bills in Congress that also seek to address issues on political dynasties, the
continued practice of party turn-coatism and the diminution of the electoral process into
mere contests of personalities.

EVALUATION

Critical Thinking Assessment

The students are going to critique and analyze the different issues in governance
1. Aside from what is discussed, what do you think are other issues and challenges
confronting
governance? Why do you think these issues occur?

2. What are current government initiatives and reforms are employed to combat these issues
and challenges? How effective are these reforms?

3. What can you suggest to further improve the performance of government in a governance
processes?

Product-Based /Performance Based Assessment on the output of the FGD the

presentation of results and on the exercises on Social Artistry. Portfolio Assessment on
the Concept Paper
References:
1. Eastern Regional Organization for Public Administration (EROPA) (2000), From Government
to Governance, Reflections on the 1999 World Conferences on Governance.
2. Asian Development Bank, (2005), Governance: Sound Development Management.
3. United Nations Development Program (1997), Governance & Sustainable Human
Development. A UNDP Policy Document.

16
Computerization of May 2004 elections was not implemented because of the court ruling.
4. United Nations Development Programme 1997a Reconceptualizing Governance. Discussion
Paper 2. New York: Management Development and Governance Division, Bureau of Policy and
Programme Support, UNDP, January.
5. Asian Development Bank (2005), Country Governance Assessment.
6. UNDP (2004) A Common View, A Common Journey, A Common Country Assessment of the
Philippines.
7. Ewalt, Jo Ann G. (2001). Theories of Governance & New Public Management: Links to
Understanding Welfare Policy Implementation. A Second Draft. A Paper Presented at the Annual
Conference of the American Society for Public Administration.
8. United Nations Development Program & Economic & Social Commission for Asia & the
Pacific, (2003) Promoting the Millennium Development Goals in Asia and the Pacific: Meeting
the Challenges of Poverty Reduction; New York.
9. Legaspi, Perla E. (2005). Overview of Governance Framework. A Working Draft on a
Handbook on LGU-SPA Partnership; UP NCPAG.
10. Laura Edgar, et al (2006) Partnerships: Putting Good Governance Principles in Practice.
Institute on Governance (IOG)
11. Ma. Oliva Z. Domingo, Third Sector Governance: Meanings, Issues, and Challenges in the
Philippines, National College of Public Administration and Governance, University of the
Philippines.
12. Cariño, Ledivina V. (ed.) 2002 Between the State and the Market: The Nonprofit Sector and
Civil Society in the Philippines. Quezon City: Center for Leadership, Citizenship and
Democracy, National College of Public Administration and Governance, University of the
Philippines, with the assistance of the Ford Foundation.
13. Vlassis, Dimitri (2006) United Nations Convention against Corruptio 17n, United Nations
Office on Drugs and Crime Division for Treaty Affair. A Paper Presented During the Trainors’
Training on UNCAC at the University of the Philippines, National College of Public
Administration & Governance.
14. Associations of Schools of Public Administration in the Philippines, (2004). Proceedings of
the National Conference on Public Administration and the Millennium Development Goals:
Challenges and Reforms for Effective Teaching and Capacity Building for Service Delivery.
15. http://magnet.undp.org/policy/
16. http://www.adb.org/Governance/gov_practices.asp.
17. http://www.unescap.org/huset/gg/governance.htm
18. .http://www.iog.ca/boardgovernance/html/gov

17
19. http://www.birmingham.gov.uk
20. http://www.adb.org/Governance/gov_practices.asp.
21. www.imf.org/external/np/exr/ib/2000/041200.htm