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Can good governance be regarded as one of the key ingredients for poverty reduction and sustainable development? To what extent has this ingredient been present in the development of countries such as Botswana and Brazil?

Can good governance be regarded as one of the key ingredients for poverty reduction and sustainable development? To what extent has this ingredient been present in the development of countries such as Botswana and Brazil? 

Opinions and assessments are subjective. Is opinion on whether a public setting is good or not subjective, too? Some might argue that Hitler’s Germany was under good governance because, in spite of extermination camps and infamous genocides of Jews, the state had low inflation and high unemployment during the Third Reich. Some might say that Finland is the best place to reside because it is the happiest country in the world, according to the World Happiness Report, neglecting the fact that it is the 26th country with the lowest GDP, according to the UN. Therefore, international organisations ascertained the unassailability of the virtues of good governance. Thus, to define good governance the UN has introduced 8 standards and reforms.


 Good governance is the fuel for growth for developing economies, or is it? Governance is, undoubtedly, an imperative requirement for fragile economies to retain themselves. Certainly, a competent, transparent and effective government will always be better than a corrupt one. Although taking pragmatic examples of Latin America and Africa into account, the international bodies, for example, the UN and IMF, surmised the pros of good governance. If good governance was the only requirement, the developing economies should have been developed by now.


The concept of good governance originated from the 1980’s Latin America Debt Crisis, also known as ‘The Lost Decade’. Latin American countries were perceived as the potentially rising economies in the 1960s and thus ended up borrowing a huge amount of money from International Aids. The world economic recession of the 1970s hit Latin America the most. The economies doomed resulting in high inflation and high unemployment. Thus, making Latin America home to drug trafficking, sex trafficking and homicides. It was then that the International Bodies brainstormed the existing economic policies and came up with reforms. The IMF made it mandatory for all the governments to fulfil the good governance reforms seeking financial aid since it has always been easier to target the governments. The international bodies, then, eluded solving the economic issues and celebrated that they had established a direct equation between governance and economic growth.


 Although, after two decades, the flaws in this system became quite apparent when the countries underperformed economically and socially. Every state has its own economic and public setting and the reforms of the UN were generalised, thus, country-specific problems were neither addressed nor tackled. Ultimately, the purpose of good governance was defeated when these countries delivered only the expectation of these donors as they sought only international aid. Critically analysing these reforms, they are federal and focus on decentralization of power. Thus, enacting these set standards resulted in an unwanted rise in local influence and defiance in some states causing instability. Sub-saharan Africa, even today, spends its resources and capital dealing with civil wars. The reforms are so far-fetched and omnipresent for any developing country that they often tend to distract or defer it from implementing a more effective solution. 


Merilee Grindle, a thinker, proposed the term “Good enough governance” that says only a minimal quality of management and public administration is required for the development. Countries like Bangladesh grew in spite of corruption, and China came up to become a super-power though it does not give property rights to its people. For the longest time, think tanks and policymakers prioritized bringing transparency and integrity without focussing on the problem-specific solutions. Taking Indian context into account, the population is one of the primary problems in the country. It is a fact that population decreases with increase in literacy rate and economic standards. Thus, the government’s approach should be towards education and not directly bring reforms in child policy. Therefore, it is important to improve the factors that affect the problem and not implement the result itself.


 Good governance is the result of a well-functioning government and not the solution to it. It is better late than never that the world finally fathoms the fact that development and effective solutions require the key goals of good governance. Thus, aiming at effective solutions rather than the goals of good governance would result in better solutions. As a result of implementing these standards for international funding, the countries that should have been sovereign ended up appealing these international aid bodies.


Some interesting examples to evaluate good governance and its relevance in development are Botswana and Brazil. Botswana was amongst the poorest countries when it got independence in 1966 and today it is at par with economies like Costa Rica and Mexico. It is the least corrupt country in Africa. The primary factor in its fast development was the discovery of diamonds in 1967. Botswana is the largest producer of diamonds, in terms of value. Nevertheless, former Botswana President, Fetus Mogae, had said in 2005 that natural resources cannot develop a country run by a government without candour. Thus, thinkers also give credit to robust economic policies and political stability of the country. 


In terms of governance, Botswana is, relatively, an easy state to manage since society is not very pluralistic. Almost 80-90% of the population belongs to the Tswana ethnic group. Even after exploiting its natural resources, Botswana has successfully managed to dodge the dutch disease, though not completely as still there is a high unemployment rate. 


Botswana has been lucky enough to be blessed with diamonds. The population growth rate of the nation was so high that if it depended only on agriculture and manufacturing for development, it would have failed like its neighbours, Zimbabwe, for example. Therefore, the key ingredient in the development of Botswana was diamond rather than good governance. It is pretty evident from the crisis that the country had faced in 1981-82 when the demand for diamonds fell. Due to the fall in demand for diamonds, the growth rate of Botswana fell too, from 12% to 9%. Thus, the economic policies couldn’t save the country from the quicksand of recession when the diamonds had given up. 


Being fastidious about Botswana, poverty and malnourishment still prevail in the country. Botswana has one of the highest percentages of HIV/AIDS victims and a low mortality rate. If Botswana was well-governed, these problems should have vanished with economic growth. Therefore, extolling governance for Botswana’s development might slight diamonds.


Another example is Brazil, a name amongst the Fragile Five of the world (Turkey, Brazil, India, South Africa, Indonesia). Brazil sets an example that economies might not grow because of good governance but, certainly, can fail due to it. The Brazilian economy has had a roller-coaster ride. The growth rate was 7.5% in 2010 which slid to -3.6% in 2016. Currently, the state also suffers from stagflation. Since 2002, for more than a decade, Brazilian elected left party as the ruling one. President Lula, who was recently jailed, was elected president in 2002. He brought the economy into the race by increasing government spending and the state managed to repay its debt to the IMF ahead of time. The country withstood the recession of 2008. The economy felt so promising that investors claimed Brazil to be the strongest economy in BRICS. Nonetheless, it all came full circle when President Rousseff was elected in 2011. She followed and implement the same policies as her former until the economy doomed and the fundamental flaws in the policies became apparent. Even President Rousseff increased public spending by increasing the minimum wage and pushed the nationalised banks to lend more money. All these resulted in a rise in inflation. Later, she went on to reduce the price of gasoline. Due to this, the government oil company suffered losses. In an already retrograding economy, instead of opening up, the government started intervening more, hampering the sovereignty of other businesses too. 


After the economy was eaten up by weak policies, the cherry on the top was the fall of oil prices in 2015. Oil is the largest export of Brazil. Finally, after the problems became uncontrollable, President Rousseff was impeached in 2016 and President Bolsonaro was elected, who is a far-right leader. After handing over their future to conservatism, Brazil has not seen much difference in their state except the worst deforestation of the decade in July 2019. High unemployment and debt still prevail in the state. Thus, bad policymaking, governance and corrupt institutions have brought an uncalled economic storm.


Considering these two examples meticulously and global scenarios on the surface, a conclusion can be drawn that developing economies require problem-specific solutions but fragile economies need to implement the reforms of good governance primarily. Politically troubled countries will always need a moral hinge to revive which make these standards vital for dooming nations. Else,  countries which have overcome their fundamental issues need to understand that international solutions might not be the correct ones to address a local problem. Navigating to the cause of the problems is more important than directly finding a solution to the problem.


Samruddhi Pathak is a student of OP. Jindal University

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