Indeed Governance today is not only the most sought after word in the development discourse, but it is also one of the most frequently used words in the vocabulary of almost every one right from politicians to international aid agencies to civil society organizations. In the huge popularity of this term however lies its misdoing also because, there is no settled meaning of the term as yet. For example, the meanings range from following liberal economic policies and hence strengthening and reforming market institutions to building capacities of public institutions to perform or encouraging democratic participation by strengthening civil society institutions etc. Moreover, some associate governance with reducing the role of the state in economic activities and delivery of services short of acting as the steer. Others associate governance with democratic participation with a special concern for the weak and vulnerable in the society. Given such diversity in the meanings of the term, the indisputable fact is that it is the buzzword in the functioning of any modern state globally. This makes us naturally inclined to understand the conceptual underpinnings of this term and also to understand, how it is different from a closely related term called as government. Do both the terms convey the same meaning? Or is it possible to have governance without government? Or for that matter, does it really mean a move towards a minimum government?

What’s Government? In its simplest yet broadest sense, to govern means to rule or control others. In this sense, the term government can therefore be taken to include any mechanism through which ordered rule is maintained in a society. An ordered rule is maintained in a society just because, the government has an ability to make collective decisions and the capacity to enforce them, This ability is derived from a government’s power or authority backed by legitimacy as it reflects the collective interests of the society. Being so, it does carry a coercive element to enforce its decisions.

Having said that a form of government can thus be identified in almost all social institutions right from families, schools, businesses, trade unions and so on, but the larger question remains: is there any governance in all such social institutions?

While trying to answer this question, we will again come to the conclusion that governance is certainly something more and beyond what we commonly understand as government and certainly carry some attributes which are not being subsumed under the rubric of government.

Notwithstanding the various manifestations and forms of government, let’s focus on the concept of government as it has traditionally been known and understood as referring to “all those formal and institutional processes which operate at the national level to maintain order and facilitate collective action.”

Reflected in this are the core functions of the government such as making of laws, (legislation) implementation of laws i.e. execution and interpretation of laws called as adjudication as we generally associate these functions to our respective governments called as central government and the state government. No doubt, similar government processes do operate at supranational and local levels thereby creating a kind of world government around us under the aegis of United Nations and local governments at the gross root level identified in our country as Panchyati Raj or Municipal government.

From the above discussion, what we can safely conclude that government indicates nothing more than the exercise of control within a society through the making and enforcement of collective decisions. What it does not indicate is, how these decisions are made and how these decisions are being implemented?

In order to look for the answers to this benign, yet crucial question, we have to look beyond the traditional notion of the government and bring into focus that lesser known phenomenon of governance which has attracted the attention of world community especially in the context of developmental discourse.

What’s Governance? Again in its broader yet simpler terms, governance refers to the various ways through which social life is coordinated in a society. In this sense, the terms governance is definitely a broader term than government. Why because, government can just be only one of the actors to be involved in governance while other actors can be many keeping in view the context in which governance is being talked about who can be instrumental in coordinating the social life. These actors may range from academia to voluntary sector to farmer unions to media and industry etc. In other words, as said earlier and reiterated here again, it is clear that in governance parlance, government is not the sole actor when it comes to decision making, but partakes of all those actors who are outside the government mainly identified as the civil society organizations although, it is also said that it is  possible to have governance even without government.

Having said that, the principal modes of governance and hence, the various ways through which social life is coordinated in a society include, Markets, Hierarchies and Networks.

Market in this context refers to the private sector i.e. industry which now only assumes a greater significance under the phenomenon of governance for delivering goods and services both promptly and qualitatively, but also coordinate social life through a price mechanism which is structured by the forces of supply and demand. Besides this it is also instrumental in generating wealth and providing employment.

Hierarchies on the other hand, include bureaucracy and other traditional forms of government organization; coordinating the social life by acting as one of the actors in governance for making policies and seeing them implemented by operating through ‘top-down’ authority systems. Governance sees that these traditional top-down authority structures should be imbued with proactive-ness and an entrepreneurial spirit so that organizational goals can be achieved.  And,

Networks refer to flat organizational forms through which social life is coordinated by creating informal relationships between essentially equal agents or social agencies, thereby creating a kind of networked state and hence, a networked society. In the context of governance, these networks are being considered to be of great significance for generating a social capital because more and stronger these networks are in a society, the greater social and political benefits they generate for the people. This eventually ensures that the civil society and quality of life will have a higher potential to flourish and hence having a direct bearing on promoting a healthy democracy. Notably, these so calledsocial networks have been thought of as being the enablers of greater political participation in various ways such as mobilization, group pressure or monitoring thereby making a democracy more participatory in nature. In governance parlance, these have proved to be more effective than the traditional structures of the government which is being characterized just a hierarchy or a collection of hierarchies. This very nature of the government is considered to be redundant in the face of an increasing complexity. In short, governance seeks to focus more on the importance of these social networks (civil society) than the government itself insofar as their role and participation in the policy making is concerned. Besides, it does focus on the ‘market’ (as discussed later) as its another essential component for its tried and tested role in the coordination of social life in a given society.

Having said that, the most familiar definition of the term governance can now be well understood as the “process of decision making and the processes by which decisions are implemented.”  

HOW DID THE GOVERNMENTS RESPOND?

Under all the above circumstances, the governments across the world increasingly started adapting themselves in the following ways:-

Firstly, the Governments started redefining their role and rather narrowed it down to the extent that instead of its (as it used to be so at one point of time) being a ‘rower’ (i.e. of administering and delivering services), the governments started confining itself to “steering” (i.e. setting targets & laying down strategic objectives as the main policy maker). This is why the literal meaning of the term governance is: “to steer or to pilot” or be at the helm of affairs. Notably, this role shift on the part of the government acknowledges the inefficiency and unresponsiveness of the traditional public administration as compared to Private business bodies or so called third sector bodies such as charities & NGO’s etc.

In the USA especially when such ideas were born and most enthusiastically embraced, this shift in responsibility for ‘rowing’ has been described as well as hailed as ‘reinventing government’ notably, during the regime of Ronald Reagan.

Secondly,there has been seen a significant blurring of the distinction between govt.& markets and thus between public & private realms. This transition has had happened in a variety of ways such as:

• Contracting out of ‘Public Services’ to private players (as glaringly see in India as well). This simply implies a phenomenon of full scale privatization.
• There is tremendous growth in the arena of public-private partnership (PPP) ventures including as well the introduction of internal markets in public service delivery, and
• Introduction into the public sector as well as Government bodies, of the private sector management styles & structures through the so called NPM[1] tool (New Public Management).

Thirdly, there has been a shift from hierarchies to networks within the processes of govt. thereby, seeing the emergence of a ‘Network State’ alongside the ‘network society’ and the ‘network corporation’. For instance, under governance phenomenon, the tasks of developing & even implementing policy have increasingly been transferred from hierarchical departments to ‘policy networks’ as these networks have proved to be particularly effective in facilitating the exchange of and coordinating social life in a context of increasing complexity.

In this sense therefore, governance refers to the various ways thing which ‘social life’ in a society is coordinated. By the coordination of social life, we mean that what institutional mechanisms we have created to provide goods and services to the people of the country and that too at cheaper and affordable costs. Similarly, which business management techniques we have introduced in order to ensure efficiency in the delivery of such goods and services and what regulatory bodies we have put in place to regulate the large scale private enterprise which have now occupied the space and role hitherto been performed by public or government entities. And finally, how much attention is being paid to these marginalized, downtrodden and vulnerable sections of the society (including minorities) as well as those non-state actors (represented by civil society) so that their voice could be heard, accommodated and is given due weightage at all levels of decision making (policy formulation).

In short, we can say that ‘Governance’ is a process or for that matter, a complex of processes that are used for coordinating the social life of a country. In this broader sense, the principal modes of governance include markets, hierarchies and networks. Insofar as markets are concerned, governance is typified by a blurring of distinction between the state and the society as it partakes of an arrangement wherein private bodies and institutions work closely with public bodies. Hierarchies portrays the involvement of a number of levels or layers (hierarchies) that may range from global (supra national) at the one end of the spectrum down to national, provincial, regional and local at the other end. In this way, the processes through which international affairs are coordinated are increasingly referred to as “global governance”.

As noted earlier, although government may be involved in governance as it is the principal organ of decision making everywhere but then, it may not be wrong to say that it is even possible to have ‘governance’ without government.

It is not only about domestic governance, today we all live in an era of “Global governance”: 

Just as the states in modern context have donned in the mantle of a modern welfare State, so do the modern international system in which the independent and sovereign states interact in the comity of nations under the aegis of a supranational authority. (The UN & its various agencies) thereby, creating a kind of ‘Word Government’. Under this world government, all of human kind is united under one common political authority such that any human problem of a particular nation state today is considered as the global problem and sustained a collective efforts are geared to redress or eradicate the same. This integration of the entire global community under the umbrella of some supra national authority is referred to as ‘Global Governance’. In short, global governance refers to a broad, dynamic and a complex process of interactive decision making at the global level, involving formal and informal mechanisms, as well as governmental and non-governmental bodies. In fact, ‘global governance’ is characterized by the phenomena such as ‘Polycentrism’ under which different institutional frameworks and decision making mechanisms operate in different issues areas. It also involves what they call as ‘Inter-governmentalism’ under which States and national governments retain considerable influence within the global governance system. Lastly, it does involve a mixed actor participation in the decision making which include the involvement of NGO’s and TNC’s who have blurred the divide between public and private entities.

In other words, we can say that the global governance is a process of interactive-decision making that allows still sovereign States to engage in sustained cooperation and, at times, undertake collective action. In this regard, it can undoubtedly be said that the growth in the number and importance of international organizations (such, UN, Security Council, WTO, WHO, UNICEF etc), can certainly be taken as a key factor in the emergence of a system of ‘global governance’ even to the extent that the term ‘global governance’ is sometimes, in effect, used as a collective term to describe the sum total of international organizations currently in existence. Although, the fact remains that the two (Global governance & International Organizations) are not synonymous, as ‘Global governance’ has a mixed actor involvement – featuring, in addition to states & IO’s, also the entities such as NGO’s, TNC’s and other institutions of global civil society such as transnational social movements.

Nevertheless, the most significant component of the global governance is the evolution of a wider concept of ‘Global Economic Governance’ which today has a greater bearing on a country’s economic policy making. This is because; economics is the most obvious area of ‘interdependence’ amongst states today and it is an area where the failure of international cooperation can cause the clearest damage.

In this context, following three International organizations have been playing a significant role:

1.   IMF: - The IMF is mandated to ‘oversee’ the global rules governing money in general, but in particular to maintain currency stability through a system of fixed exchange rates. Since 1971, IMF has embraced a neo-liberal economic model under which it requires centuries to carryout stringent market based reforms as a condition precedent for receiving aid or IMF assistance. Today, IMF has grown from its original membership of just 29 to 188. It is headquartered at Washington.

2.   The World Bank (WB):-Formerly known as IBRD (international bank for reconstruction and development), is mandated to reduce the element of risk in foreign lending, thereby underpinning economic stability. Since the 1980’s, the bank has geared its lending to ‘structural adjustments’, the reorientation of economies around market principles and their integration into the global economy. It is also headquartered at Washington.

3.   The WTO: It was established in 1995, replacing its predecessor, GATT. WTO was created in consequence of the so called ‘Uruguay round’ of negotiations (held between1986-95) such that it (WTO) has wider powers than those possessed by its predecessor, GATT. In fact, WTO’s mission is to liberalize world trade and create an ‘open’ global trading system.

Incidentally, the ‘Doha round’ which started in 2001, broke down in the year 2006 because of disagreements between developed and developing states. WTO has 157 countries as its members by the end of 2012 with around 27 countries having already applied for joining it. It is headquartered at Geneva.

Fig: Multilevel Governance in Action Pictorially 

What impact does global governance have on national or domestic governance?

The very fact that the shift from government to ‘governance’ is reflected not only in the more ‘complex ways’ through which social life is now coordinated within modern societies, say for example, through a wider role for markets i.e. growth of private Sector and networks besides weakening of public- private divide, but it is also evident in the stretching the government across a number of levels.

 In other words, it is meant that the so called ‘government’ today can no longer be thought of as a specially national activity which takes place within discrete societies, it has instead to be a more inclusive activity stretching it as far and as down as possible. This new thinking is what that has today led to the phenomenon of multi-level governance in which global governance occupies the topmost slot.

Under this new phenomenon, the policy making responsibility has both been ‘sucked up’ and ‘drawn down’ thereby, creating a complex process of interactions. The so called ‘sucking up’ of policy making responsibility has occurred though the advent of political globalization and the growing importance of regional & global governance, say in example, the UN & its other agencies today are making policies for the countries to adhere to the guidelines for the promotion of international peace and security as well as creating a climate for the respect and protection of human rights etc.

On the other hand, the ‘drawing down’ of policy making responsibility reflects in a process what we call as ‘decentralization’. Decentralization is defined as the expansion of local autonomy through the transfer of power and responsibilities away from national bodies. This new trend may also be referred to as localization, having been inspired mostly by the growth of cultural and ethnic politics and hence the slogan: “Think globally, act locally”has today become a watchword of developmental discourse. Nevertheless, this phenomenon of localization has had profound implications for the process of governance by making the policy process yes more fragmented and decentralized.

In the Indian context thus, the introduction of local self government by 73^rd and 74^th amendments can nonetheless be taken as a good governance initiative to translate the democracy at the grass root level. Similarly, this localization trend has also given birth to a host of ethnic, culturally distinct and linguistic homogenous groups whose interest articulation through various schemes and national policies has given a new dimension to the processes of policy making and hence governance in the country…