Transparent donors and development dogma

In recent years, the donor-led chorus on good governance (i.e. reduced corruption) has been gathering unprecedented momentum. "Transparency" and "accountability", the twin mantras of this new orthodoxy, are being relentlessly pushed in developing countries as the ultimate remedies for all their socio-economic ills. Adhering to the "good governance" gospel, developing countries are repeatedly told, could get them a place in the hallowed halls of the "civilised, democratic" Western world. Not unexpectedly, this new gospel has come with fantastic paraphernalia: global anti-corruption fora, good governance conferences, special governance policy units and fancy measurement indexes. On the surface, all the major interpretations of "governance" reflected in the ideologies and mandates of international aid agencies appear to critique mainstream international development policy. For neo-liberal and other proponents, the new emphasis on "good government" marks a decisive shift in development policy from unfettered market competition, on the one hand, and complete command and control, on the other, to "facilitative, enabling, participatory, incentive-based" policies. But all that glitters is not gold. Deeper insights and country experience with "governance reform packages" point to a thin disguising of the old wine of neo-liberal development prescriptions in the new bottle of governance. To decipher the real meaning, scope and impact of this new dogma on the course of political and socio-economic development in developing countries, however, one must delve into its intellectual origins.

From adjustment to governance By the late 1970s, the apparent failure of the statist models of industrial development in the Third World and the concomitant success of the "export oriented" Asian economies had bolstered a dominant neo-liberal consensus which squarely apportioned the responsibility for Third World underdevelopment on misguided and excessive government intervention in the economy. Hence the state had to be rolled back as it promoted rent-seeking opportunities by creating distortions in the market. The blanket solution: Structural Adjustment Loans (SALs) for "getting the prices right" through wholesale privatisation, trade liberalisation and deregulation. A decade of stabilisation and structural adjustment programmes under the auspices of the IMF and the World Bank, however, turned out to be an unmitigated disaster. Far from removing the so-called "market distortions", these policies worsened poverty and income distribution in many developing countries.