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Chapter 1 Introduction: Governance and development Jomo Kwame Sundaram and Anis Chowdhury
The idea of governance began to influence policy debates during the period of liberalizing market reforms in the 1980s. Margaret Thatcher and Ronald Reagan, in the United Kingdom and United States, respectively, sought to reorganize society and government around the principles and values of markets and private property. It was generally presumed then that such reforms would end problems of economic inefficiency, corruption and arbitrary rule in developing countries. In this context, governance was advanced as an alternative conception of authority expressed through institutions that would insulate markets from rent-seeking ‘distributional coalitions’ (Olson 1982). Nobel Laureate Douglass North’s (1981) discussion of the security of property rights from threats by the monarch or the state has also influenced the governance agenda.1 This emphasizes the role of institutions in providing checks and balances on the power of various organs of the state to ensure a stable, predictable and non-arbitrary state – a fundamental condition for spurring economic growth and prosperity. Thus, governance became a major concern of the Washington Consensus on development. Good governance should address market failures and ensure institutional reforms capable of making markets work better. The presumption of a benign, potentially developmental post-colonial state was replaced with the idea of a necessarily predatory government whose politicians and administrators pursue their self-interest, seeking rents and other privileges. In this context, the question of who would drive the reform process became a major issue, as neither the state nor the political processes could be counted upon. Thus, reform has to be led by enlightened leaders operating ‘outside’ politics, for example, from civil society to advance the general welfare interests of society against self-serving bureaucrats and other vested interests.
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