Since the 1990s, some donor countries have made part of their aid conditional on a set of policies, including economic liberalization, political liberalization and democratization. This triptych, which can be assembled under the heading of ‘good governance’, has also been promoted by multilateral financial institutions.
Today, because of the economic crisis, forceful criticism of this gamut of conditions is again being expressed in both North and South.
The disproportionate impact of the crisis on developing countries seems to call into question the legitimacy of the policies that have encouraged these countries to liberalize their economies.
In fact, the current definition of good governance, which suggests that these different components, political and economic, are intimately interconnected, discredits the concept itself. The faults of the international economic system, after calling into question the encouragement of economic liberalization, also risk weakening the recommendations on political liberalization and democratization.
Now that the worst of the crisis appears to be over, is it not time to reconsider the complex and subtle relations of these different policies and redefine the links between democratization, political liberalization and economic liberalization? It would be useful for development actors to consider an updated definition of the concept of good governance. This idea leads to some essential questions on the future of development aid coming up again: which comes first, good governance or ODA? Is good governance a prior condition for aid or is it the expected result of effective ODA?
Ideas for Development put these questions to Jean-Michel Severino and here is his response:
For some, major improvements in democracy, human rights, corruption, governance at large, are a prerequisite for the engagement of ODA [official development aid] in a country. And yet, one may see that all over history improvements and development have been the process through which democracy, human rights, corruption, governance at large have improved and citizens have taken more part into the development of their country. That is why remaining engaged and having ODA playing a positive role in promoting those basic dimensions of development, and at the same time allowing economic progress fuel into those improvements, is absolutely necessary. Yet, there are and there will be extreme cases in which no progress can be achieved whatsoever and where governments or local political situations do not allow this engagement on this very basis of human rights and governance, and in those cases of course, one should abstain if only not to be taken as a kind of token, as a kind of coverage for all the misbehaviours of governance or political stakeholders. Once more, this will remain the minority of cases, and economic and social progress will be the instruments through which global governance will be improved over time.
Finally, we should stress that the work of Nicolas Meisel and Jacques Ould Aoudia shed new light on the subject; see La «bonne gouvernance » est-elle une bonne stratégie de développement ? (Is Good Governance a Good Development Strategy?) (Working document, AFD No 58, January 2008).