1 Summary Governance Class 01 ## SIGNIFICANCE OF GOVERNANCE (5:00 PM): - Governance forms a significant portion of the General Studies Paper 2. - Governance also overlaps with the General Studies Paper 4 Ethics. - Apart from exam relevance, power will be instrumental in being a good civil servant and citizen. ## Administration: - "Administration" is derived from the Latin words  **Ad & Ministrare.** - The literal meaning is " to serve" the interests of the concerned organization. - Administrators are those people who are expected to serve the interests of the objectives of the organization. - From the perspective of the government, administrators are expected to serve the interests of the country and its citizens. - They are expected to maximize the welfare of the people. - Both government officials and citizens are involved in the administration. - The efficiency and orientation of the administration are directly related to the development of the nation. ## GOVERNANCE (5:30 PM): - The natural orientation of anything is to move towards **Entropy-**destruction. - Governance is an instrument that can help promote negative entropy- sustainability of civilizations for a longer period of time. - **For example**, there are many countries in the world that are poor and backward despite being rich in natural resources because of their inefficient governance system. - These countries are mainly in Latin America, Sub-Saharan Africa & South Asia. - At the same time, there are also other countries that have achieved rapid economic growth and development in a short period of time due to efficient administrative systems. - These countries are mainly in Western Europe, North America, etc. and Japan. - Governance is the process and the institutions through which decisions are made and authority in a country is exercised. - Governance is the method through which power is exercised in the management of a country's economic, social, and human resources so that they are utilized for development. - Governance is the exercise of economic, political, and administrative authority to manage a country's affairs at all levels. - It comprises the mechanisms, processes, and institutions through which citizens and groups articulate their interests, exercise their rights, meet their obligations, and mitigate their differences. - | | | --- | | **Comparison between Indian and British Systems:** - As Britain has a much older and more mature democratic system, we can see some evident differences. - It is customary that the British Prime Minister faces questioning in the parliament every day in the House of Commons. - British CAG is both the Comptroller and Auditor General in the true sense. - No money can be spent from the British Consolidated Fund without the authorization of the British CAG. - British CAG also audits all the expenditures done by the British Consolidated Fund. - In India, the CAG can only do post-mortem operations by auditing the expenditures done by the Consolidated Fund of India. - Indian CAG's authorization is not necessary for any expenditure out of the Consolidated Fund of India. | - In simple terms, governance means making decisions and ensuring their effective implementation. ## From a broader perspective, governance includes the following: - Creation of institutions like legislatures, executive, judiciary, civil services, local self-governance, and so on. - These institutions are expected to be related to the utilization of resources, including human, natural, financial, and technological resources. - Governance also includes effective implementation of these decisions because a developing country like India always faces a problem of scarcity of resources. - Optimum utilization of resources is a prerequisite for rapid economic development. ## BAD GOVERNANCE (6:00 PM): - Some common/important indicators are : - I. Corruption. - II. Absence of Rule of Law. - III. Red Tapism. - IV. Absence of quality-service delivery mechanisms. - V. High levels of secrecy in government functions. - VI. Concentration of power at the top of the administrative system. - VII. Absence of accountability. - VIII. Absolute monopoly of the state over allocation of resources. - IX. Dictatorial decision-making process. - X. Complete absence of citizen participation in governance. - Citizen participation in representative democracies is only restricted to voting in elections. - XI. Inability to resolve conflicts without resorting to violence, like we are seeing in Manipur. - XII. Failure of regulatory authorities to prevent systematic corruption and crony capitalism. - | | | --- | | **Red Tapism:** - Red Tapism refers to the inordinate delay in the functioning of government departments. - It is commonly seen that public officials in the garb of following rules, keep shifting responsibilities from one office to another. - This costs much time for both common people and industries. - Red tapism reduces both the public respect for government offices and the ease of doing business. | - XIII. Delay in justice delivery. - | | | --- | | **World Bank:** - World Bank (WB) provides developmental loans for poor and developing countries. - These loans have very low-interest rates and long repayment periods. - These loans are extended without collateral, only on the sovereign guarantee. - A sovereign guarantee can be understood as the goodwill any country enjoys. - The **International Monetary Fund**on the other hand gives only short-term loans for Balance Of Payment Crises. - IMF's assistance comes with many strict conditionalities. | ## GOOD GOVERNANCE (6:30 PM): - World Bank has very less options if the borrower country cannot pay back its loans. - But if the country wants to seek loans again from the World Bank, the World Bank can attach certain conditions. - These conditions are based on the **Washingon Consensus,**and the WB came up with the **8 features of Good Governance:** - I. Transparency - II. Accountability. - III. Participation of Citizens. - IV. Consensus Oriented. - V. Rule of Law. - VI. Economy & Efficiency. - VII. Inclusiveness and Equity. - VIII. Responsiveness. ## ORIGINS OF GOOD GOVERNANCE (7:00 PM): - After the Second World War, many countries gained independence. - Because of centuries of colonization, the economic conditions of these newly independent countries were critical. - **For example-**India was characterized by high levels of poverty, unemployment, illiteracy, backwardness, absence of infrastructure and industrialization. - All such countries were in need of rapid economic growth and development. - It is a well-known fact that rapid growth and development are possible only with investment. - Two important multilateral institutions came up in the form of the WB and the IMF. - WB had come into existence to provide long-term financial assistance to member countries for industrialization and infrastructure development purposes. - Latin American, Sub-Saharan, and South Asian countries have taken loans from WB which had a gestation period of 30-40 years. - Since most of these countries went into the hands of dictators, the financial assistance was misused for their personal comfort. - By the 1980s, these countries failed to repay the loans. - Since it was a sovereign debt (loans given on the basis of the sovereignty of a nation without any collateral), WB could not recover it. - These countries demanded that fresh loans should be given to them so that they could repay the old debt. - WB had agreed to provide fresh loans but with certain conditionalities. - These conditionalities in the 1980s were popularly known as the **Washington Consensus.** - Countries were asked to cut down their fiscal deficits, devalue their currencies, open up their economies to the rest world( Globalization), privatize their loss-making PSUs(Privatization), and dismantle their excessive rules & regulations (Liberalization). - Within the political and administrative systems, they were asked to implement many governance reforms. - All these reforms combined together are popularly known as the concept of Good Governance. - Governance is a neutral term that talks about the process of making decisions and implementing them. - Good Governance is a qualitative term that emphasizes certain parameters and standards to be followed while making decisions and implementing them. - The objective of good governance is to maximize welfare for the maximum number of people and for the longest periods of time. - The WB has identified 8 important features of good governance. - | | | --- | | We can easily forgive a child who is afraid of the dark; the real tragedy of life is when men are afraid of the light. **GS paper IV, 2015.** **Approach:** - The second part of the statement dealt with transparency, especially in the government system. - The answer must focus on the need for government transparency, and why government tries to avoid transparency. - We can mention acts like the Official Secrets Act of 1923. - We can focus on the RTI act, and ARC Report's opinion on transparency and RTI. - Second ARC refers to RTI as '**the master key to Good Governance** - We must also explore the relationship between transparency and accountability. | ## TRANSPARENCY: (7:30 PM): - High levels of secrecy are one of the features of bad governance. - It can allow those who are in positions of power to indulge in corruption, nepotism & favoritism, and misuse of their authority. - WB has rightly identified that transparency in administration is necessary to realize good governance. - Transparency will create awareness among the citizens regarding the functioning of their governments. - It can ultimately lead to a demand for participation & accountability. - India passed the Right to Information (RTI) Act in 2005 to ensure transparency in governance. ## Accountability: - It means making the concerned person legally responsible for his actions. - India has inherited colonial administrative systems where the Britishers deliberately made sure that bureaucracy was not made accountable for its actions. - It gave scope for inefficiency and corruption. - As part of the rights-based approach to governance, many governance reforms have been implemented to ensure the accountability of the administrators. - They include the Citizen's Charter, E-Governance, Social-audit, etc. ## Participation of Citizens: - In a democracy, citizen participation must not be restricted only to election times. - Citizens must be involved in governance processes through both inputs and feedback mechanisms. - Citizen participation nudges public officials and politicians to be transparent. ## THE TOPIC FOR THE NEXT CLASS IS Continuation of the principle of good governance.