Governance during Social Transformations: Challenges for Africa

In recent years African countries have faced a barrage of policy advice backed with financial support from development partners urging them to implement ‘good governance’ reforms. Good governance has come to mean support for improving the enforcement of property rights, the rule of law, fighting corruption and improving accountability. These reforms have enjoyed broad support because many of these goals are desirable in themselves, and in addition, an underlying set of institutional theories suggest that these reforms will make markets more efficient by reducing the transaction costs of enforcing contracts and providing efficient public goods. The reforms have faced two sorts of problems in Africa and elsewhere. First, in conditions of significant underdevelopment, the implementation of these reforms has been rather limited. This is because the enforcement of formal rights and institutions presupposes economic and political conditions that are associated with advanced economies. The economic assumption is that tax revenues are available for the enforcement of a general structure of rights, which is an expensive proposition. An even more important political assumption is that the rights that are to be enforced are sufficiently aligned with the interests of dominant economic and political organizations for their effective enforcement to be feasible. In reality neither of these assumptions holds in the typical developing country and so very limited improvements in governance defined in this have proved feasible. It is therefore not very surprising that good governance reforms have had a very limited effect on growth and development in countries following these policies.