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7. Governance and Economic Growth
- LANGAA RPCIG
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Chapter Seven Governance and Economic Growth Max Memfih Ntangsi Introduction As the UN Secretary General—Kofi Annan put it, “Good governance is perhaps the single most important factor in eradicating poverty and promoting development.” Around the world, more people are recognizing that governance matters for development— that institutions, rules and political processes play a big role in whether economies grow, whether children go to school, whether development moves forward or backward. So, promoting development is not just a social, economic and technological challenge: it is also an institutional and political challenge. Accompanying this new consensus is a growing conviction that many persistent development problems reflect failures of governance. Studies in a range of countries and regions hold weak governance responsible for persistent poverty and lagging development. The governance crisis is evident in widespread corruption, inefficient public institutions and a host of other failures. These studies have also shown what poor governance means for ordinary citizens—schools without teachers, courts without justice, local bureaucrats demanding bribes at every turn. What does it mean to promote good governance? There is no single answer. But much of the recent debate has focused on what makes institutions and rules more effective, including transparency, participation, responsiveness, accountability and the rule of law. All are important for human development— especially since ineffective institutions usually cause the most harm to poor and vulnerable people. But just as sustainable development is about much more than growth in national incomes, governance for human development is about much more than effective institutions and rules. For three reasons, it must also be concerned with whether institutions and rules are fair—and whether all people have a say in how they operate: 148 Cameroon: The Stakes and Challenges of Governance and Development • Participating in the rules and institutions that shape one’s community is a basic human right and part of sustainable development. • More inclusive governance can be more effective. When local people are consulted about the location of a new health clinic, for example, there is a better chance it will be built in the right place. • More participatory governance also can be more equitable. Much is known about the economic and social policies that help eradicate poverty and promote more inclusive growth. But few countries pursue such policies vigorously, often because the potential beneficiaries lack political power and their interests are not fully represented in policy decisions. Governance for sustainable economic growth and development is partly about having efficient institutions and rules that promote development by making markets work and ensuring that public services live up to their name. But it is also about protecting human rights, promoting wider participation in the institutions and rules that affect people’s lives and achieving more equitable economic and social outcomes. Thus governance for sustainable development is concerned not just with efficient, equitable outcomes but also with fair processes. Governance for sustainable development must be democratic in substance and in form—by the people and for the people. Good governance— what for? From the sustainable development perspective, good governance is democratic governance. Democratic governance means that: • People’s human rights and fundamental freedoms are respected, allowing them to live with dignity. • People have a say in decisions that affect their lives. • People can hold decision-makers accountable. • Inclusive and fair rules, institutions and practices govern social interactions. • Women are equal partners with men in private and public spheres of life and decision- making. [107.21.176.63] Project MUSE (2024-03-28 11:34 GMT) 149 Ntangsi: Governance and Economic Growth • People are free from discrimination based on race, ethnicity, class, gender or any other attribute. • The needs of future generations are reflected in current policies. • Economic and social policies are responsive to people’s needs and aspirations. • Economic and social policies aim at eradicating poverty and expanding the choices that all people have in their lives. Literature Review This chapter draws on the seminal contributions of North (1990), and Olson (1996), which stress the role of institutions for economic development and some of its results are also related to Olson’s (1982), on interest groups as an impediment to growth. Both authors acknowledge the importance of the double feedback relationship between institutions and economic performance in their informal analyses, which is the point made in this paper as well. While the motivation for this her is provided by the recent empirical evidence briefly summarized below, the specifics are related to two branches of the literature and, in a sense, build on their...