Governance is the overall complex system or framework of processes, functions, structures, rules, laws and norms born out of the relationships, interactions, power dynamics and communication within an organized group of individuals. It sets the boundaries of acceptable conduct and practices of different actors of the group and controls their decision-making powers through the creation and enforcement of rules and regulations. Furthermore, it also manages, allocates and mobilizes relevant resources and capacities of different members and sets the overall direction of the group in order to effectively address its specific collective needs, problems and challenges.
The concept of governance can be applied to social, political or economic entities (groups of individuals engaged in some purposeful activity) such as a state and its government (public administration), a governed territory, a society, a community, a social group (like a tribe or a family), a formal or informal organization, a corporation, a non-governmental organization, a non-profit organization, a project team, a market, a network or even on the global stage. "Governance" can also pertain to a specific sector of activities such as land, environment, health, internet, security, etc. The degree of formality in governance depends on the internal rules of a given entity and its external interactions with similar entities. As such, governance may take many forms, driven by many different motivations and with many different results.
Smaller groups may rely on informal leadership structures, whereas effective governance of a larger group typically relies on a well-functioning governing body, which is a specific group of people entrusted with the authority and responsibilities to make decisions about the rules, enforcing them and overseeing the smooth operation of the group within the broader framework of governance. The most formal type of a governing body is a government, which has the responsibility and authority to make binding decisions for a specific geopolitical system (like a country) through established rules and guidelines. A government may operate as a democracy where citizens vote on who should govern towards the goal of public good. Beyond governments, other entities can also have governing bodies. These can be legal entities or organizations, such as corporations, companies or non-profit organizations governed by small boards of directors pursuing more specific aims. They can also be socio-political groups including hierarchical political structures, tribes, religious subgroups, or even families. In the case of a state, governance expresses a growing awareness of the ways in which diffuse forms of power and authority can secure order even in the absence of state activity. A variety of external actors without decision-making power can influence this system of state governance. These include lobbies, think-tanks, political parties, non-government organizations, community and media. Governance is also shaped by external factors such as globalization, social movements or technological progress.
Many institutions of higher education - such as the Balsillie School of International Affairs, Munk School of Global Affairs, Sciences Po Paris, Graduate Institute Geneva, Hertie School, and the London School of Economics, among others - offer governance as an academic subjects. Many social scientists prefer to use the term "governance" when discussing the process of governing, because it covers the whole range of institutions and involved relationships.
Definitions The World Bank defines governance as:
The Worldwide Governance Indicators project of the World Bank defines governance as:
This considers the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies and the respect of citizens and the state of the institutions that govern economic and social interactions among them.
An alternate definition sees governance as:
According to the United Nations Development Programme's Regional Project on Local Governance for Latin America:
Origin of the word
Like government, the word governance derives, ultimately, from the Greek verb kubernaein [kubernáo] (meaning to steer, the metaphorical sense first being attested in Plato). Its occasional use in English to refer to the specific activity of ruling a country can be traced to early-modern England, when the phrase "governance of the realm" appears in works by William Tyndale"When the king's grace came first to the right of the crown, and unto the governance of the realm young and unexpert..." and in royal correspondence from James V of Scotland to Henry VIII of England."We have put all our confidence, has als actyflie with ye help of our derrest Modir takin on Ws ye governance of our Realme": The first usage in connection with institutional structures (as distinct from individual rule) appears in Charles Plummer's The Governance of England (an 1885 translation from a 15th-century Latin manuscript by John Fortescue, also known as The Difference between an Absolute and a Limited Monarchy). This usage of "governance" to refer to the arrangements of governing became orthodox including in Sidney Low's seminal text of the same title in 1904 and among some later British constitutional historians.
However, the use of the term governance in its current broader sense, encompassing the activities of a wide range of public and private institutions, - "4. The manner in which something is governed or regulated; method of management, system of regulation" - attested in this sense since 1402. acquired general currency only as recently as the 1990s, when it was re-minted by economists and political scientists and disseminated by institutions such as the UN, the IMF and the World Bank.Étymologie du terme "gouvernance" , document prepared by the European Commission. - "Le mot anglais governance a été remis à l'honneur dans les années 1990 par des économistes et politologues anglo-saxons et par certaines institutions internationales (ONU, Banque mondiale et FMI, notamment), de nouveau pour désigner 'l'art ou la manière de gouverner', mais avec deux préoccupations supplémentaires; d'une part, bien marquer la distinction avec le gouvernement en tant qu'institution; d'autre part, sous un vocable peu usité et donc peu connoté, promouvoir un nouveau mode de gestion des affaires publiques fondé sur la participation de la société civile à tous les niveaux (national, mais aussi local, régional et international)." Since then, the term has gained increasing usage.Usage frequency graph
Types Governance often refers to a particular level of governance associated with a type of organization (including public governance, global governance, non-profit governance, corporate governance, and project governance), a particular 'field' of governance associated with a type of activity or outcome (including environmental governance, internet governance, and information technology governance), or a particular 'model' of governance, often derived as an empirical or normative theory (including regulatory governance, participatory governance, multilevel governance, metagovernance, and collaborative governance).
Governance can also define normative or practical agendas. Normative concepts of fair governance or good governance are common among political, public sector, voluntary, and private sector organizations.
Governance as process In its most abstract sense, governance is a theoretical concept referring to the actions and processes by which stable practices and organizations arise and persist. These actions and processes may operate in formal and informal organizations of any size; and they may function for any purpose, good or evil, for profit or not. Conceiving of governance in this way, one can apply the concept to states, to corporations, to non-profits, to NGOs, to partnerships and other associations, to business relationships (especially complex outsourcing relationships), to project teams, and to any number of humans engaged in some purposeful activity.
Most theories of governance as process arose out of neoclassical economics.Manski, C. F. (2000). Economic analysis of social interactions. Journal of Economic Perspectives, 14(3), 115-136. These theories build deductive models, based on the assumptions of modern economics, to show how rational actors may come to establish and sustain formal organizations, including firms and states, and informal organizations, such as networks and practices for governing the commons. Many of these theories draw on transaction cost economics.
As a normative concept
Fair governance
When discussing governance in particular organizations, the quality of governance within the organization is often compared to a standard of good governance. In the case of a business or of a non-profit organization, for example, good governance relates to consistent management, cohesive policies, guidance, processes and decision-rights for a given area of responsibility, and proper oversight and accountability. "Good governance" implies that mechanisms function in a way that allows the executives (the "agents") to respect the rights and interests of the stakeholders (the "principals"), in a spirit of democracy.
Good governance
Good governance is an indeterminate term used in international development literature to describe various normative accounts of how public institutions ought to conduct public affairs and manage public resources. These normative accounts are often justified on the grounds that they are thought to be conducive to economic ends, such as the eradication of poverty and successful economic development. Different organisations have defined governance and good governance differently.
Effective governance The effectiveness of governments is not a straightforward and consentient type of governance. Measurement and conceptualization of effectiveness is controversial and often used interchangeably with good governance.Andrews M. (2008) The good governance agenda: Beyond indicators without theory, Oxford Development Studies, 36(4). https://doi.org/10.1080/13600810802455120 However, during the period of 1996–2018, an effort was made by the World Bank to create a comparable measure of the performance of governments; the Worldwide Governance Indicators (WGI). The WGI is constituted by over 30 databases which are rescaled and categorized into six categories; among these is government effectiveness. According to this category, effective governance is composed by five aspects: the quality of public services, the quality of the civil service, the degree of the government's independence from political pressures, the quality of policy formulation and implementation, and the credibility of the government's commitment to such policies.WB (World Bank) (2019). "Worldwide Governance Indicators", https://info.worldbank.org/governance/wgi/Home/Documents In short, effective governance is about quality of service, the independence of government and the quality of policies and implementation.
Adding to these components, one might argue that responsiveness to citizen's needs is high in an effective government. Acting according to these needs, effectiveness is achieved by transparent, decentralized and neutral structures, that are consistent and disciplined. Therefore, efficient financial management, high-quality and committed personnel and formalized and standardized ways of processes is needed. For the latter, governments became much more efficient with the arise of bureaucracies. Nevertheless, governments in a rapidly changing environment need to be able to adapt quickly, so being bounded by rigid structures of functioning could work as a detriment.