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Good governance and aid effectiveness: the World Bank and conditionality  [2001]

C. Santiso

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Abstract
This article assesses the Bank's approach for promoting good governance in developing countries. It argues that the Bank's use of traditional approaches to strengthen good governance in developing countries is misguided.The paper outlines the concept of good governance as defined by the World Bank and others. It looks at the technocratic application of the concept by the World Bank and the weaknesses in this approach. The paper then examines the relations between governance and economic development, looks at conditionality in aid and its effectiveness. It recommends that politics is brought back into governance and that aid is reformed accordingly.The paper outlines the following weaknesses in the Bank's approach to governance and conditional aid:the Bank interprets the concept restrictively, arguing that whether a government is democratic or not falls outside its mandate. As a result, it focuses on the economic dimensions of good governance, which has been equated with 'sound development management and disregards political elementsby ignoring domestic politics, conditionality has had perverse effects as it undermines the domestic democratic processes by supplanting public policy-making the practice of selectivity where aid is directed according to conditionality, has not been applied consistently and can be seen to reflect political agendas on behalf of donors, contradict poverty alleviation objectives, and justify lower spending on aid budgets Key
points and observations of the paper include:the quality of governance is ultimately attributable to its democratic content. Neither democracy nor good governance is sustainable without the other. Consequently, democracy and good governance need to converge, both conceptually and practically, in the study and practice of public policy-making. for the Bank to substantially improve good governance in developing countries, it will need to explicitly address issues of power, politics and democracy - to bring politics back in. bringing politics back into governance requires: strengthening accountability; enhancing the rule of law; promoting participation and moving towards democratic governance reform of governance systems in recipient countries should be matched by corresponding reform in the governance of aid and, in particular, the aid delivery systemaid conditionality is not the most appropriate approach to strengthen good governance in developing countriesa more radical approach is needed in which donors cede control to the recipient country, within the framework of agreed-upon objectives
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Other subjects

  • IFIs
  • development aid
  • policies
  • Finance policy.International Financial Institutions
  • Agriculture and food.International cooperation for development
  • government
  • world
  • Governance.Theories of good government
  • first aid
  • aids
  • poverty
  • conditionality
  • Finance policy
  • aid agendas
  • Governance
  • developed countries
  • democracy
  • institutions
  • trade
  • developing countries
  • environmental policies
  • Agriculture and food
  • good governance
  • Aid and debt
  • aid
  • democratisation
  • Finance policy.International Financial Institutions.IFIs World Bank and IMF
  • governance