Governance and human development are closely intertwined as sustainable human development is almost impossible without good governance. No doubt, income plays a fundamental role, as argued by Nobel laureate Amartya Sen, in facilitating the access of individuals to opportunities and capabilities. However, the relationship between income and capabilities is neither automatic nor constant, meaning good governance is a must to translate income/growth (if we can achieve it at all in a setting of bad institutions) into human development. In this context, reform of institutions to promote good governance is highly significant to pull people out of poverty and deprivation.
A majority of our population is faced with deprivations of acute nature. According to a UNDP estimate, about 51 percent of our population is living in multidimensional poverty and as many as 54 percent of the people are living in intense deprivation. The capabilities approach to human development places high reliance on good governance to reduce such deprivations. The report of the commission (that included two prominent economists of our times i.e. Joseph Stiglitz of Columbia and Amartya Sen currently at Harvard) on the ‘Measurement of Economic Performance and Social Progress’, appointed by French President Nicholas Sarkozy, has advocated a new approach, based on the multidimensionality of well being, for measuring and achieving human development.
Only two points of the report need to be emphasised here to make the point. First, we need to go beyond the GDP as a measure of human welfare as well being is multidimensional, the report says. The multidimensionality of well being should inter alia include elements like material living standards (income, wealth and consumption), health, education, social connections and relationships, environment and insecurity (both economic and physical) that shape people’s well being.
Second, the role of the state cannot be downplayed in human development as the state plays an important role in the provision of services in today’s complex economies. The state is responsible for the provision of public services like education, law and order, justice, and infrastructure etc. But the state is always faced with a scarcity of resources. Performance of the state can be enhanced only if service delivery is made efficient in terms of cost efficiency, reach and quality. It requires that the state not only allocate sufficient resources for the provision of such services but, at the same time, uses such resources efficiently. It would only be possible if the institutions are strong, government is committed in controlling corruption and effective accountability mechanisms are in place.
The state has also got a crucial role in enforcing and defining the rules and policies designed to reduce social exclusion and discrimination. If governance is poor, the intended objectives of such rules — how grandiose they are — will not be achieved. For example, education is one of the most important dimensions of development from the capabilities perspective of development. In our case, the state of affairs of public sector education is not that ideal mainly due to weak governance.
How does weak governance contribute towards this unsavoury situation? The vicious circle starts from the inability of the state to raise sufficient revenue due to weak governance. Capacity of the state to raise taxes is now taken as a good proxy for governance in empirical literature. If a state fails to collect due taxes, then it implies that governance is weak. Low revenue collection means that our needs outstrip our resources, hence low allocations for social sectors like education. Budget allocation for education is then spent mainly on two broad expenditure heads: first, for building new infrastructure (schools and colleges) and maintenance of old institutions and second operational expenditure including salaries of teachers and other staff.
The story of ghost schools is not that old. It is very likely that such schools exist even today especially in far flung areas due to weak accountability and corruption, both indicators of poor governance. Merely scaling up public investment in the education sector will not yield high returns unless efforts are not made to improve governance at each and every level of the government. The rapid deterioration of infrastructure, negligence in the provision of basic necessities such as clean water, toilets etc is not due to resource constraints only rather poor governance is equally responsible for this pathetic state of affairs. The same applies to other public service institutions that are directly responsible for human development, where even given resources are not put to their optimum use due to poor governance.
Poor governance threatens the physical safety of the people as they can become easy prey for criminals and highhandedness of state institutions. Corruption, violence and weak governance in society impact the poor more and impose heavy costs on them. Insensitivity of law, enforcing agencies, poor administration of justice due to mechanical and labyrinthine procedures of the courts, weak enforcement of property rights resulting in violence/fight over land grabbing by the land mafia, poor law and order, lack of meritocracy and rule of law all are big stumbling blocks to human development. All these symptoms owe their genesis to bad governance and weak institutions. Poor governance thus becomes a big hurdle in the realisation of the true potential of the people.
While addressing a conference on governance, Mr Kofi Annan, the former UN Secretary General, once said, “Good governance and sustainable development are indivisible. Without good governance — without rule of law, predictable administration, legitimate power and responsive regulation — no amount of funding, no amount of charity will set us on the path to prosperity.” Mr Annan’s remarks are very true in our case. Good governance is the most fundamental prerequisite for the socio-economic development of the people. It is only through better institutional mechanisms and good governance that we can put the development process on the right track.
It is, therefore, required that improving governance be our top most agenda both at the micro as well as macro level. At the micro-level, all the processes, procedures and laws of public service delivery institutions should be examined to make them efficient and pro-development. Supremacy of the rule of law, introduction of strong accountability mechanisms and tackling corruption must be the top priority areas at the macro-level for improving governance and gearing it towards human development.
The writer is a graduate from Columbia University, USA in Economic Policy Management and studied economic governance in the UK. He can be reached at [email protected]