Why the Concern with

Governance Now?

Mizanur Rahman (MR)

 Governance Philosophy

►incorporating private actors, private

philosophy
►operate through networks
►play a coordinating role bringing together
public private resources.
►Leaving legal power to transnational
organization and subnational organizations,
 Concern with Governance Now…

➢ Governance has become a catchword in 1990s.

➢ Politician and political sciences and its subfields embraced the idea
of governance as a new way of thinking about state capabilities
and state society relationships.

➢ British Economic and Research Council (ESRC) launched research

programme on “Local Governance”.

➢ IMF, World Bank and UN initiated a large scale campaign for

‘good governance’ in 3rd world country as a new reform objectives.
 Governance --

➢ Recent EU- focused research largely been shaped by governance

theories or multilevel governance owing to the negotiated nature
of relationship between local, regional, national and
transnational institutions.
➢ A rapidly growing interest in ‘global governance’ in ‘international
relation’ .
➢ In political economy, public-private exchange has become
conceived of as ‘governance’ and
➢ Numerous studies drawing on extensive research projects
investigated the role of government in coordinating sectors of
economy.
 Why the Concern with Governance Now?

→ The Financial Crisis

→ Globalization

→ Ideological Shift Towards Market

→ Failure of the State

→ Emergence of New Public Management

→ Social Change and Increasing Complexities

→ The New Sources of Governance.

 1. The Financial Crisis
➢ State capability declined in 1990s (compared to
1960s in Western world).
▪ Western countries faced budget deficit and debt beyond
political control.
▪ Economic growth slowing down, negative growth.
▪ Interest on state debt become expenditure sector like any
core sector such as education, defense.
▪ Currency devaluation. (Pierre & Peters, 2000, p.52)

Two important causes of Financial Crisis that highlight

governments’ difficulties with governing their economy

i. Increase in public expenditure. (inflation, restructuring)

ii. Stalling State Revenue (tax rate at its peak, added VAT as
a new strategy in 50/60s). (Pierre & Peters, 2000, pp.52-54)
 1.The Financial Crisis (contd.)

Economic crisis has encouraged the development of new

instrument of governance. Governance become attractive
philosophy due to 3 reasons:
1. Under budgetary constraints, govt. tried to maintain their service
level by involving private actors and organized interest in public
service delivery.
2. Increasing popularity of governance due to its participative nature:
Inclusion of private actors and management philosophy.
3. Public service delivery and production were under attack and
termed as ‘slow bureaucracy’ - incorporating private sector
management thinking and diversifying public service delivery.
 1.The Financial Crisis (contd.)

Economic crisis forced the state to become less self-

reliant and more inclined to operate through networks
and other forms of public-private joint action.

Unable to provide the financial and organizational

resources, necessary to sustain the pervious level of
public services, the stat now seeks to play a
coordinating role bringing together public private
resources.
 The Financial Crisis

• There is much more emphasis on the consumer choice and

diversification.
• The overall transformation of public sector since 90s is the
combined effect of development towards good governance,
a redesign of public service and administrative reform to
accompany those changes.
 Globalization (contd.)

Globalization : It’s a free flow of – man ,money

and materials .

Globalization is the process of international integration arising from

the interchange of world views, products, ideas, and other aspects
of culture.
Advances.in transportation and telecommunications infrastructure,
including the rise of the telegraph and its posterity the Internet, are
major factors in globalization, generating further interdependence of
economic and cultural activities.
Globalization
 Globalization (contd.)
Globalization has two inter-related dimensions:
a) Economic and b) Political

Economic globalization has been propelled by a series of political

decisions aiming at deregulating/unleashing the economy. (US and
UK promote this.)

Globalization of private capital.

 Globalization (contd.)
Linkages between Governance and Globalization:
1. Globalization clearly encouraged the development of
transnational institutions in search for new techniques and
strategies to create a political counterweight to private capital,
volatile currency and financial market (Ex: EU, WTO).
2. Globalization introduced uncertainty in domestic policy making
and for the civil service which makes institutions more dependent
on domestic and international expertise. Transnational institutions
are acted as a key sources of expertise.
(Pierre & Peters, 2000, p.59)
 Globalization (contd.)
Linkages between Governance and Globalization:
3. Decreasing efficiency of traditional domestic instrument of control
like law, regulation etc. Corporate actors are less attached to a given
locality. Govt. tend to be more careful in using legal enforcement
toward corporate players.
Increasing mobility of corporate players… relocate in different
countries.. Hence government has to deal them carefully.
In addition, the need to develop closer but informal links with private
industry to maintain/increase international competitiveness of the
domestic industry.

(Pierre & Peters, 2000, p.60)

 3. Ideological Shift toward Market
▪ Ronald Reagan reject state and politics as a vehicle for
change in market. Government is not the solution of the
problems but rather as a problem itself.
▪ According to Reagan, federal bureaucracy was
overregulated, its obstructing economic growth.
▪ Thatcher shared Reagan’s belief that economic prosperity
was hampered by too much political control and
regulation.
▪ The political goal was ‘unleashing market’
 3. Ideological Shift toward Market

▪ The ideological shift towards individual and

market posed a major challenge to the state.
The state somehow had to redefine its role.

▪ Therefore, state accepted and adopted the

concept of governance as a strategy to link the
contemporary state to the contemporary
society.
 4. Failure of the State

▪ State performance from 1980 to 1990 was assessed

as disappointing.
▪ The fiscal crisis of the state and a growing popular
frustration with ‘Big Government’ had put state in
problematic situation, it was seen as big and
expensive which is incapable of delivering
appropriate service.
▪ There was a clear notion that state somehow failed.
▪ (Though all failure not real, due to over expectation.)
 4. Failure of the State

▪ The new governance in many ways a logical

response to this critique of the state; they
emphasis on :
▪ Public-private sharing of functions and joint
mobilization of resources. Emphasis on the new
governance on market-based concept.
 5. Emergence of New Public Management (Contd.)

▪ Managerial revolution under heading of NPM.

Emergence of NMP propelled the governance in two
ways:
1. It asks for a market based reform of the public
sector, following the private managerial philosophy of
‘letting the manager manage’.
Politician are left with goal setting role which
corresponds closely with new governance thinking.
Service production and delivery should be conducted
market like fashion and at arm’s length from the
political elite.
▪
 5. Emergence of New Public Management

2. NPM advocates less input control, more

emphasis on evaluation and performance. This
requires different organizational model and interactions
compared previous model of Public Administration.
Criteria used in evaluation normally are derived from
private sector organization more than from bureaucratic
theory.

NPM dismantle government role as service provider.

Governance focus on state role to coordinate and
facilitate…
 6.Social Change and Increasing Complexities

▪ Changing nature of most salient issues in contemporary

politics in Western Europe and the United States. It seems
politics have reached the third wave in terms of policy area
dominated by public policy.
▪ First Wave: Developing institutional framework for
political debate and consolidation of democracy. Ex –
Parliamentary reform
▪ Second Wave: Political elites mainly concerned with
distributive and re-distributive policy (tax wave, health
policy, social policy.)
▪ Third Wave: contemporary social change. It includes:
enhanced participation, environmental protection,
gender.
 6.Social Change and Increasing Complexities

Some issues can deal at national level like gender.

The issue like environment is attacked by both
domestically and globally.

This new sort of complexities requires new source

of expertise which makes governance more
dependent on external source of knowledge.
 6.Social Change and Increasing Complexities

▪ Interested societal groups move too close to

government that gives them to access to policy
making and civil service.

▪ Some critique says that they moved too close to

the state.
 7. New Sources of Governance

▪ New source of regional and international (global)

governance.
▪ Growing strength of regional organization like EU, the
international organizations such as the WTO and IMF in
post war period.
▪ These emerging intuitions propelled social scientists to
look more conceptually at ‘how regional and
international institutions relate to states and subnational
government’… Much of this analysis cast in terms of
Governance, or multilevel governance.
 8. Political Accountability

▪ There is a tension between new forms of political

coordination & steering and instruments for political
accountability.
▪ Democratic theory – “power and accountability must
rest with the same actors for some form of electoral
control to be real”.
▪ Governance some extent confuses that by inviting
non-accountable actor in political process, which may
arise confusion, even there is intention to maintain
accountability, the complexity will make it hard to
understand for general people.
 8. Political Accountability

▪ This dilemma is not so novel; in corporatist model,

many organizations influence over public policy for
which they are not accountable to.
▪ In modern societies, government is still responsible,
but less capacity to act politically.
▪ New Public Management (NPM) has better option to
ensure accountability like consumer choice.
 Conclusion

▪ State no longer has a monopoly over the expertise,

nor over the economic or institutional resources.
▪ Nevertheless, State remain key vehicle for pursue of
collective interests.
▪ We are witnessing a transformation of the state to
adapt with the changing environment, new governance
does not mean the decline of the state.
▪ In particular, state remains as goal-setting structure, if
not always as an implementation structure.
 Suggested Reading

“Why the Concern with Governance Now?” in Pierre, J., &

Peters, G. B. (2000). Governance, politics and the state.
London: Palgrave Macmillan . (Ch:3, pp. 50-69)