Governance and Poverty

Issue: Whether the concept of governance explains the contemporary development problem of poverty

Introduction

The United Nations Millennium Campaign and Global Call to Action Against Poverty (GCAP) projected over 67 million people around the world to join in the Stand Up and Take Action against Poverty and for the Millennium Development Goals in over 2,000 events across more than 100 countries from October 17-19 this year (Stand Against Poverty website, 2008). The figure represents about one percent of the world’s population and signifies the growing demand for leaders to make good on their promises to eradicate extreme poverty and achieve the Millennium Development Goals by 2015 (Stand Against Poverty website, 2008).

“The unprecedented mobilisation is being held at a time when hundreds of billions of dollars are being found to bail out wealthy bankers and financial institutions, while the emergency summit on the MDGs held at the United Nations last week was only able to generate US$16 billion in commitments to ending poverty” (Afrique en Ligne website, 2008).

This blatant display of a lopsided and far-from-judicious set of priorities among world leaders draws a basic insight as to how states and the organizations of such are currently operating through its institutions, rules and systems that in the end inform decisions, policies, or commitments towards addressing the global issue of poverty.

"Governance", the way institutions, rules and systems of the state operate at central and local level and how the state relates to ordinary people, has become a central theme in poverty reduction (ITAD website, 2008).

Linking Governance to Poverty

The issue of poverty has reached global proportions in what is ironically an era of abundance and progress. It has always been a twin concept of what is termed development which remains to be a durable preoccupation among theoretical discussions and empirical studies. The resolution however remains elusive and as complex as its dynamics.

Some definitions of poverty are approached in differing perspectives. One approach takes on an economic view to poverty that establishes a ‘poverty line’, below which a person is considered to be in poverty as well as the Gross National Product (GNP) per capita of a country (LeMare, 2001:10). Another approach views the various dimensions of poverty and the problems which poor people face that go beyond low income (LeMare, 2001:12). Yet another approach is one that sees poverty as “relative to the lives of other people who live in the country and in the ways that poorer groups can be excluded from active participation in the society” (LeMare, 2001:13). This is exemplified in the dual character of developed countries where one can still observe large, prosperous cities with a considerable number of shanties jutting aside tall, corporate buildings representing wealth in its material form.

The gross disparities observed around the world, taking into consideration all three definitions of poverty proffered, inevitably lead us to question the relevance of and invoke the role of the state in its benevolent concept. Where is the state that is supposedly assigned the encompassing power to provide for benefits and opportunities to its entire people? What is happening to all the state institutions that supposedly ensure that access to opportunities for development (read: a high quality of life) are achieved thereby freeing people from poverty? Has governance with the state as the main actor become irrelevant and rhetorical in this day and age?

Addressing the Washington DC Press in 2001, Former World Bank Senior Vice President and Chief Economist Nicholas Stern stated that “globalization often has been a very powerful force for poverty reduction, but too many countries and people have been left out, important reasons for this exclusion are weak governance and policies in the non-integrating countries, tariffs and other barriers that poor countries and poor people face in accessing rich country markets, and declining development assistance”.

Based on Stern’s statement, it is interesting to note how the World Bank recognizes the important role of governance among poor countries in achieving development. One, it posits that globalization positively plays a major role in poverty reduction among poor countries. Two, it presupposes that a country may more likely be unable to address poverty issues unless it is fully integrated into the prevailing international economic order that which is free market and the abolition of economic barriers among countries. This suggests that protectionist policies make for weak governance. Three, the declining rate of development assistance being poured into poor countries imply that much opportunity has been lost for these poor countries to extricate themselves from such poor conditions. Firstly, the problem with the preceding positions is that it sits within the context of globalization and therefore excludes the idea that there can never be any form of development outside such context. Secondly, globalization is in itself a hegemonic system which denotes that the dominant players in such a system, the rich countries in this context, do not permit other economic systems to grow. Therefore, it is a given that rich countries will protect its own interest and proliferate itself at the expense of these poor countries through, for example, the global manipulation of trade and the market system as a whole. In addition, while it is stated that globalization may have been a powerful force for poverty reduction, what is not stated here is that globalization may have also perpetuated poverty in the first place with its hegemonic nature. Thirdly, it presumes that without external assistance poor countries will have lesser ways of resolving poverty. It therefore excludes the capacity of poor countries to find alternatives on its own to alleviate their condition. Governance, therefore, as formulated by World Bank still becomes an instrument to propagate its own hegemonic interests and ensures that the status quo is maintained.

World Bank defines governance as ‘the manner in which power is exercised in the management of a country’s economic and social resources for development’. It employs some measurements of ‘good’ governance, to wit: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption.

Here, World Bank qualifies and operationalizes the concept of governance with measurements of ‘good’ governance. The recommended measurements of ‘good’ governance do seem to represent liberating ideals from the more often muddled politico-cultural and socio-economic dynamics prevailing among poor countries but time and again scenarios have surfaced in various domestic contexts that challenge the very essence of such measures of ‘good’ governance and more importantly, the intention of those that define these measures. Oftentimes, the World Bank and its concurrent international institutions such as the IMF or the rich countries for that matter turn a blind eye towards these happenings especially when it is not in their interest.

Voice and accountability recognizes the role of the governed or constituents in charting their own development. Yet, voicelessness of poor countries is present in the way representatives of poor countries sign up to lopsided ‘fair’ trade agreements that usually benefit more the rich countries than the poor ones. Oftentimes, the accountability of such representatives seems to lean more towards the external patrons rather than to those that they are representing.

Political stability and absence of violence is imperative in ensuring that state institutions are functioning well to secure social justice and the fundamental rights of its people. A good number of states ironically however resort to violence and violation of human rights whenever its regime or hold on power is being challenged while all too often, the rich countries invoke sovereignty among nations and non-interference when the governments of such states in question are those that are in favor of their liberal policies or have professed loyalty to such.

Government effectiveness is indeed a relevant measure in that it is here where state decisions translated into policies are evaluated in real terms vis-à-vis its core obligations to its people. But here the question may be raised as to whether the formulated state policies are indeed responsive to the needs of its people or such policies are mere implementation of the Structural Adjustment Programmes (SAPs) as in the Poverty Reduction Strategies designed by the IMF, for example, which tend to impose more Western concepts of development that again serve a purpose in the whole global configuration.

Regulatory quality implies the state as an enabling structure and thus emphasizes its role in providing fair access as well as mechanisms to obtain the targeted goals of the country vis-à-vis development. Many countries however have succumbed to trade liberalization, deregulation, and privatization to the detriment of the interests of the poor who have to bear the brunt of rising prices of commodities, electric and water bills and other effects brought about by such policies advised by no less than the IMF-World Bank.

Rule of law is vital in guaranteeing that the common good is protected and promoted in all aspects. The legal and administrative machinery of the state has to be properly resourced so as to effectively implement policies for the public good. Again, we have seen how governments in poor countries have used the law and the bureaucracy to proliferate its self interest and the interest of its patrons.

Control of corruption is essential because a corrupt system results to an unproductive economy. This measure has indeed been found to be necessary not only by those in the poor countries but also among international institutions and donors who have poured in a considerable chunk of aid to control corruption. But it may also be useful to note that a corrupt system impinges on the return of investments of these donors hence, altruism may not at all be the primary force for such generosity.

Other than the World Bank’s analysis of the link between governance and poverty, a different approach may be considered which is founded on the concept of ‘development as freedom’ attributable to Amartya Sen in which ‘the process of development consists of the removal of various unfreedoms’ (Sen 1999 in Mundle, 2001:3). Here Sen basically speaks of freedoms as both constitutive and instrumental to achieving development. In his Keynote Address to the International Centre for Governance and Development in 2001, Sudipto Mundle of the Asian Development Bank examines the nexus between governance and poverty using Sen’s concept of ‘development as freedom’.

Departing from a more common governance-poverty link which attributes high growth to sound macroeconomic policies and pro-market interventions by the State which essentially sharply reduced poverty among East and Southeast Asian countries, a wider context in the governance-poverty nexus is development as freedom. This starts with freedom from illiteracy and the freedom to live healthy normal lives where high priority is accorded to social sectors in general in the allocation of public expenditure such as in the education and health sectors, a free and lively press as a precondition to making the government perform as demonstrated by the prompt measures by government to prevent ill-effects of disasters so no negative media may ever jeopardize their political career, and a functioning legal system which has, ideally, the task of effecting the expansion of freedoms as in a land redistribution law is instituted to address rural poverty and peasant unrest, among others (Mundle, 2001:8-19).

Whether there are commonalities or differences in the ideas and examples linking governance and poverty cited by both the World Bank and Mundle, the key message that may be drawn from these relations is that poverty reduction lies ultimately in the hands of society, the people, who should exercise their agency and mobilize themselves to demand from states and governments to deliver ---to perform its core functions it owes to the people. This requires standing up, being counted, and voicing out the demands for genuine commitments to poverty reduction.

Reading List

Book

LeMare, A. (2001) “Poverty and Development”, Preparing for Development, Supplementary Material U213/TU871, pp. 10-13.

World Wide Web page

Stand Against Poverty. (2008) More than One Percent of Global Population Expected To “Stand Up and Take Action” Against Poverty, [Online], Available: http://www.standagainstpoverty.org/en/node/816 date accessed 19 Oct 2008.

Afrique en Ligne (2008) Campaigners to world leaders; End poverty now!, [Online], Available: http://www.afriquenligne.fr/campaigners-to-world-leaders;-end-poverty-now!-2008101713948.html date accessed 19 Oct 2008.

ITAD 2008 [Online], Available: http://www.itad.com/neweb/povgov/povgov.aspx date accessed 19 Oct 2008.

Stern, N. (2001) Globalization, Growth and Poverty: Building an Inclusive World Economy, [Online], Available: http://econ.worldbank.org/WBSITE/EXTERNAL/EXTDEC/EXTRESEARCH/EXTPROGRAMS/EXTMACROECO/0,,contentMDK:20290021~pagePK:64168182~piPK:64168060~theSitePK:477872,00.html, date accessed 20 Oct 2008

Mundle, S. (2001) “Keynote Address

Governance and Poverty: Some Selected Issues”, International Centre for Governance and Development University of Saskatchewan, [Online], Available: http://www.icgd.usask.ca/keynote.pdf , accessed 15 Oct 2008

Course Material

Hout, W. (2008) The State and Governance in Development: Nation-building and State-building, Session 3 Lecture Powerpoint Presentation: Global Politics of Development 1111, 2008-9