Why Effective Governance is the Only Way to Sustained Economic Growth

Effective Governance is a key reason why Nations Grow or Fail

Nations and societies grow for a variety of reasons and strong and stable institutions are one of the them. When countries have a well functioning bureaucracy, competent law enforcement agencies, and a capable judiciary, it follows from this that the country would grow economically. This is because the issues of property rights, enforcement of contracts, and abiding by the law as well as having a business friendly bureaucracy imply that businesses and companies would find it easy to do business in that country. Of course, this does not mean that having these attributes in place alone guarantees economic growth as there are other factors live availability of resources, productivity of the workforce, and efficiencies in economic work. Further, countries that do not have these attributes register growth too though not at the pace that the countries with these attributes manage. There is the example of China, which has a business friendly bureaucracy but does not have enforcement of the contracts and associated aspects, which means that it can grow more if it takes care of these factors.

How to not become a Failed State

The next aspect about governance is the provision of basic services to its citizenry. Unless the citizens have access to clean and potable water and unless they have round the clock electricity as well as have access to cheap and affordable transportation among other things, they would be unable to be efficient economic actors or agents, which means that, their productivity would take a hit. In other words, unless the basic issues are sorted out, citizens will not be able to work in the optimum level desired for economic growth. This is the case with India where the collapse in governance has meant that the country is stagnating and being caught in a morass from which it would take years to emerge. Further, when there is no governance, there tends to be an encouragement of shady and dubious business practices because there is nobody to regulate or monitor the activities of the companies and individuals. This is the reason why many countries are classified as failed states because even the semblance of governance that is needed for sustenance is absent. As has been pointed out by many experts, fixing failed states is an arduous and time-consuming task and hence, it is better for countries to not fall into this category.

Effective and Inclusive Governance

The third aspect about effective governance is that it is inclusive and encompasses all sections of society in its ambit instead of catering to a particular segment of society. In case the government caters only to the wealthy and powerful and not to all sections of society, the risk is that the country might witness social unrest and social strife. This is the case with many countries in the Middle East and Northern Africa where the unevenness of development meant that large numbers of unemployed and disaffected youth took to the streets to voice their protest and give vent to their rage. The point here is that governance, government must not be seen as pandering to the rich and powerful only, and instead, all round and inclusive growth and governance must be the objective. In other words, all must be equal before the law and before the government as only then will there be sustained well being of all citizens. The fourth aspect about effective governance is that it enables social mobility and social progress as by actualizing good governance, the countries would empower and enable individuals to rise above the class into which they were born and become upwardly mobile thanks to the opportunities that the government has created for them.

Closing Thoughts

Finally, institutions take time to be built and developed and hence, there must be a mechanism in place that nurtures the tools of effective governance and efficient government to enable these institutions to become strong and stable over a period of time.


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Political Science