Concept of Governance: An Overview

Tariq Mehraj*
Dr. Anjum Ara Shamim****
Abstract

Governance means the Process of decision making and the process by which decisions are implemented or not
implemented. Governance is a active concept. It encompasses fast changing political, social and economic milieu
together with the international environment and conditions of operational governance. Modern concept of
governance is participatory, responsive, consensus-oriented, transparent, accountable, effective and efficient,
equitable and inclusive and follows the rule of law. Governance is related with efficient and effective administration
in a democratic framework an administration considered to be citizen friendly, transparent, citizen caring, responsive
and respecting human rights at large. In the era of globalization, there are many streams of discourses doing the
rounds within realm of political economy and political sociology at the national and international levels.
Democracy, development and participatory governance are one such stream. Governance, reforms and
development are another stream.

Key Words: Governance, Corporate Governance, New Public Management, Hierarchy Model,
Rational Goal Model, Open Systems Model and Self-governance Model

Introduction

This section of the paper presents the governance realm. It discusses why it is necessary to
understand the concept of governance in a general sense and how governance has become a
prominent area of discussion in past as well as present times. The paper also tries to define
contextual uses of governance, highlight models of governance adopted by different countries and
key features of some of these models. The paper further explains how governance has been
interpretations by International organisations like World Bank, Organisation for Economic
Cooperation and Development (OECD) etc. and their obligations to guidance the global Countries
for the implementation of governance in the administration setup for the well being of the society.
In present times, Governance has becomes a prominent area of discussion. It not only occupies
centre state, in the development discourse but is also considered as the vital element to be
incorporated in the development strategy.

Concept of Governance

The concept of Governance has been in use at least since the fourteenth century. First it was used
in France during that period that implied seat of government. It had begun range of meanings from
the act or manner of governing its office or power, which made its synonymous with government,
to being virtuous or wise in one’s general behaviour. Governance refers to a process of the act or
function of exercising (usually legitimate) authority to regulate affairs of men in given territory,
generally a State. In effect, it is the conduct of business of a policy or society. Again, because of a

*
Research Scholar, Department of Political Science, University of Kashmir.
****
Associate Professor, Department of Political Science, University of Kashmir.

1|Page
generally implied orientation of people in favour of a democracy, defined as a government of the
people, by the people and so for the people, the “good” and “welfare” or “interest” of people is
assumed to be the necessary and sufficient condition of governance (not to speak of good
governance) and its legitimacy.(Arora, 2007: 137). In earlier period the term governance was used
in a border sense of government, which is not suitable in present times. Governance means more
than maintaining law and order. In other words, we can say that it is a participative system in
which those who are called upon to govern on behalf of the people are motivated with a will to
giving their best, serving and doing good to the people, solving their day to day problems and
making their lives more liveable, satisfying and enjoyable. Governance is the exercise of political,
economic and administrative authority to manage a nations affairs It embraces all the modes good and bad that
societies uses to distribute power and administer public resources. Governance is the manner in which power is
exercised in the management of a country’s social and economic resources for development. (Frey, 2008)

Origin of Governance

Kautilya in his articles Arthashastra elaborated the traits of the King of a good governance state
as, “in the happiness of his subjects, lies his happiness, in their welfare, whatever pleases himself,
he does not consider as good, but whatever pleases his subjects he considers as good
(Sharmasastry, 1929). Plato is credited with developing the concept of the Philosopher King as the
ideal ruler. Aristotle was perhaps the first political theorist to deal with the term governance when
he classified political organisations by indicating the manner in which they were ruled - a kind of
numerical court of rule by one (dictatorship) a few (autocracy) of may be democracy.
(Vayunandan, 2003: 16). Kautilya’s state administration principles, enunciated about 2300 years
ago, bear striking resemblance to modern day Welfare State model in respect of ideology, ideals,
functions, assignments, duties, socio-administrative organisations, etc. It is actually surprising that
even in those days, king or ruler’s duties and obligations towards well being and interests of State,
society, nation citizens are clearly laid down as were the detailed guidelines for the governance of
the kingdom in its varied field, like economic and financial administration, trade and commerce,
agriculture and manufacture, mining, transport, village development, land use, taxation,
punishments for negligence of duties assigned to superintendents of State and other employees as
also private citizens (for development work). Kautilya was interested both in the material welfare
of the people but also in their moral welfare. Another interesting feature was that Kautilya’s
framework of governance which also included programmes for advancement of backward and
vulnerable sections of the society. Kautiliya’s system of governance was quite modern in concept
and contemporary in operational guidelines. (Arora, et al, 2007:138-39).

Interpretations of International Organisations

The concept of governance during late eighties and early nineties, has received added importance
in the hands of multilateral and bilateral aid-giving agencies that used it as a pre-conditions for
providing aid particularly to the developing counties. In this context, in 1989, the World Bank
gave the lead followed by OECD, UNDP and the UNESCO.

2|Page
World Bank

The International organisation World Bank was the first body to use the term and defined it in the
following words “the manner in which power is exercised in the management of a country’s
economic and social resources by government (World Bank, 1990:5-7). Governance, in general
has three distinct aspects. a) the form of a political regime (parliamentary or presidential, military
or civilian, and authoritarian or democratic. ( Furio, 2017:17). b) the process by which authority is
exercised in the management of a country’s economic and social resources and c) the capacity of
governments to design formulate, and implement policies and discharge governmental functions
(World Bank, et al 1994:58). The terms usually describe conditions in a country as a whole.

Organisation for Economic Cooperation and Development (OECD

The concept of governance by Organisation for Economic Cooperation and Development (OECD)
denotes the use of political authority and exercise of control in a society in relation to the
management of its resources for social and economic development. ( Keping, 2018:1-8) The
organisation lays down the key components of governance as follows:

 Legitimacy of government;
 Accountability of political and official elements of government;
 Competence of governments to make policy and deliver services, and
 Respect for human rights and the rule of law (Srivastava , 2009:2)

UNESCO

In 1997 UNESCO defines governance as the process whereby citizen’s desires and interests are
articulated for the positive social and economic development of the entire society and in the light
of perceived common good. Governance means more than government. It refers to a political
process that includes the whole society and contributes to the making of citizens, active
contributors to the social contract that binds them together (Pradeep, Vayundandan, 2010:99).
Their sense of political efficacy is one of the indicators of democratic governance.

Governance: Contextual Uses

Governance since ancient times has been conceptualised as an ideal state or Rama Rajya. This
notion endures even now, as good governance is seen to bring in happiness and welfare of the
people. It is also associated with efficient and effective administration in a democratic framework.
As such, administration should be development oriented and committed to the people.

Governance as the Minimal State

In this sense, governance redefines the extent and form of public interference and the use of
markets and quasi markets to deliver “public” services. The extent of any change is a matter of
dispute. Indisputably, as regards United Kingdom, the size of government was reduced by

3|Page
privatisation and cuts in the size of the civil service. However, public expenditure remained
almost constant as a proportion of Gross Domestic Product (GDP), public employment cut down
only slightly in local government and the National Health Service, and regulation replaced
ownership as the preferred form of public intervention with the government creating ten major
regulatory bodies.(Dalingwater, 2017:2-3)

Governance as Corporate Governance

In this use, governance refers to the system by which organisations are directed and controlled.
(Cadbury Report, 1992). Thus the governance role is not concerned with running the business of
the company, per se, but with giving overall directions to the enterprise, with overseeing and
controlling the executive actions of management and with satisfying legitimate expectations for
accountability and regulation by the interest beyond the corporate boundaries. All companies need
to be governed as well as managed (Tricker, 1984)

Governance as New Public Management (NPM)

In its third use, governance is related to the NPM, It initially, had two meanings. Managerialism
i.e., introducing private sector management methods to the public sector and second sense, it
refers to new institutional economics, i.e., Introducing incentive structures (such as marketing
competition) into public service provision. Manageralism was the dominant strand in Britain
before 1988 and after that new institutional economics become more prominent. New Public
Management and entrepreneurial government share a concern with competition, markets,
customers and outcomes. Governance calls for ore steering, providing impetus to other forces,
rather than rowing. The emphasis has thus been placed on ‘enabling’ rather than ‘providing’
(Larbi, 1999:5-10)

Models of Governance

Like the various definitions and contextual uses of governance, there are a few models of
governance, which can be adopted by different countries. The key features of some of these
models are discussed.

Self governance Model Open System Model

Continuity Order Innovative Change

Hierarchy Model Rational Goal Model

Centralisation, Vertical Integration

4|Page
In the above figure, the models of governance represent two dimensions of difference viz., the
vertical axis and the horizontal axis. The vertical axis represents the degree to which power is
centralised or decentralised. High centralisation means that there will be structural power
integration of governance arrangements whereas high decentralisation means strong elements of
differentiation with the governance system. The horizontal axis, on the other hand, represents the
orientation towards change. Governance arrangements may be oriented towards the creations of
continuity, order, stability and sustainability for bringing about innovation in order to respond to
new economic pressures or shifting public expectations. When these two axes-vertical and
horizontal, intersect, the following four models of governance are produced (Newman, 2001:34-40)

The Hierarchy Model

This model is oriented towards predictability, control and accountability. It is characterised by

bureaucratic power and vertical patterns of relationships flowing up and down hierarchies. This
model corresponds to the much discredited form of governance in which the State exerts direct
control over policy development and implementation through bureaucratic hierarchies. Change is
very slow in this model, which is brought about by bringing about modifications in the legislation,
rewriting the rules or guidelines, or producing new standards and procedures, all cascading down
the vertical hierarchies of the governance system. A positive feature of this model is
accountability, which tends to be high. The model is process-oriented and focused towards
continuity rather than change. The other key features of this model are minimum risk, security
order and standardisation and bureaucratic in nature. Policy formulation and implementation are
functionally differentiated and formalised (Helen, 2017:9-10).

The Rational Goal Model

The model focuses on maximum output in a shorter period. Power, in this model, is dispersed
across a wide range of agencies. Change is a basic feature of this model, which is brought about
by altering incentives, with rewards (or at least the absence or penalties) attatched to the delivery
of targets and policy goals. Despite the devolution of power and responsibility, one sees a
centralised approach in this mode. The goals and targets are cascaded from the government and
the performance is monitored, inspected and audited very strictly. The basic characteristic of this
model are a strong means ends orientation and a pragmatic and instrumental approach. It also
incorporates many of the characteristics of new public systems management. It emphasises on
efficiency, economic rationalism and managerial authority. Accountability for outputs is high, but
accountability for detailed expenditure and the probity of decision making would be lower than in
the hierarchy model (Taylor , 1911)

The Open Systems Model

In this model, emphasis is on network forms of interaction and iterative processes of adaptation.
In terms of governance theory, this approach corresponds most closely to the ‘network’ model of
governance described by Rhodes, Stoker, Kooiman and others. Differentiation is promoted

5|Page
through the decentralisation of power, enabling experimentation and innovation. This model
encompasses, multiple inputs and reflexive processes of development in which decisions can be
adjusted in the course of new information. The system both influences and is influenced by the
environment. It is fluid, fast and highly responsive. The boundary between policy and
implementation becomes more fluid allowing feedback and learning during the policy cycle.
Accountability in the model is low but the sustainability is high. Change is accomplished by
autopoeisis though self organisation and self steering rather than as a result of external
intervention (Kickert , 1993)

The Self-governance Model

In the model the focus is on building sustainability for fostering relationships of interdependence
and reciprocity. It acknowledges the role of civil society in governance, highlighting the
relationship between State and citizen rather than limiting notions of governance to the actions of
the State. Governments in many countries, including the present labour government in the United
Kingdom may seek to work in ‘partnership’ with citizens, for example, to draw them in a co-
producers of health and welfare services, or as partners in the development of sustainable
solutions to social problems. In order to extend their legitimacy, the government may invite the
public to participate in decision making as citizens or as the users of services. The approach
encompasses models of democratic innovations, which include participative and direct
democracy, and associational democracy in which civil society takes on functions previously
perfumed by the State. (Hirst, 1994)

Conclusion

Governance chiefly focuses on the process of governing involving interactions between various
formal and informal institutions as well as influencing the policies and decisions that concern
public lives. The success of governance depends on the reinvention of the government,
reinvigoration of non-government sectors, with a social motive. There is a need to have political
will, normative concerns and organisational flexibility. Because, it is imperative to pay attention
to the mechanisms and modalities followed by governments to determine public policies and
equally important, to critically examine whether the policies are being efficiently and honestly
implemented by the government agencies and organisations responsible for performing the
assigned tasks. It also needs to be seen whether, and to what extent, the governments have
established meaningful linkages with various elements of civil society, which can support the
concern for good governance. Governance needs to be transformed to make it the key instrument
towards effective implementation of public policies. This requires a multi pronged strategy to
strengthen the capacities of all the actors involved in the governance process. Governance as
sustainable human development needs to be given a wider connotation, so as to bring within its
fold, not just good government, but also other formal and informal institutions, public-private
interface, legal and regulatory reforms, decentralisation of economic functions, and empowerment
of communities. The State, the private sector and the NGOs especially the community based
organisations should cooperate and coordinate with each other to make good governance possible.

6|Page
References

Arora R.K., Indian Administration, Sumit Enterprises, New Delhi, 2007, p.137
Cadbury Adrian, The Report of the Committee on the Financial Aspects of Corporate
Governance, Gee & Co., London, 1992.
Dalingwater Louise, Civil Service Reform and the Legacy of Thatcherism, 2017, p.2-3
Furio Cerutti, Conceptualizing Politics: An Introduction to Political Philosophy.
Routledge, 2017, p. 17
Helen & Colin M. Gunter, Mills, Consultants and Consultancy: the case of Education,
Spinger International publication, 2017, p.9-10
Hirst P., Associative Democracy, Polity Press, Cambridge, 1994.
Klaus Frey, Development, good governance, and local democracy, 2008
Keping Yu, Governance and Governance: A New Framework for Political Analysis,
Fudan Journal of the Humanities and Social Science, 2018, p.1-8
Kickert W., “Autopoeisis”, Organisational Studies, Vol.14., 1993
Larbi George A., The New Public Management Approach and Crisis State, United Nations
Research Institute for Social Development, Paper No.112, September 1999, p.5-10
Newman Janet, Modernising Governance New Labour Policy and Society, Sage,
London, 2001.
Newman Janet Modernising Governance: New Labour Policy and Society, Sage, London,
2001, pp.34-40
Pradeep Sahni, Administrative Theory, PHI Learning Private Limited, New Delhi, 2010, p.99
Etakula
Vayunandan
Sharmasastry R., Kautilya’s Arthashastra, Weslevan Mission Press, Mysore, 1929
Srivastava Meetika, Good Governance-Concept, Meaning and Features: A Detailed
Study, 2009, p-2
Taylor Frederick, The Principles of Scientific Management, New York: Harper and Brothers, 1911
Tricker R.I., International Corporate Governance, Prentice Hall, Englewood Cliffs,
New Jersey, 1984
Vayunandan E., Good Governance: Initiatives in India, Prentice Hall of India, New Delhi,
2003, p.16
World A Hand Book of World Development Report 1990: Poverty, New York:
Development Oxford University Press. 1990.
Report

7|Page