# Introduction

<mark>There is a strong academic and policy consensus that governance matters for development.</mark><sup>2</sup> <mark>Empirical evidence shows that development trajectories are largely shaped by the presence – or absence – of: an effective state monopoly on the use of violence; stable and predictable rules and institutions that regulate economic relations, enforce contracts and regulations, and promote economic investments; as well as open and inclusive political institutions that ensure the representation of plural economic interests and create political incentives to level the economic playing field (North 1990, Rodrik et al. 2004, Acemoglu and Robinson 2012). Figures 1 to 3 illustrate the positive correlation between governance determinants (political stability, rule of law, and voice and accountability) and growth in Sub-Saharan Africa (SSA). They also hint, however, at the many conundrums of institutional and economic development, including the uneasy relation between natural resources, governance and growth as well as the wide variations in economic performance of countries situated in the ‘messy middle’ of the governance spectrum.</mark> What is the quality of governance on the African continent and how does it shape development? What can be learned from the governance trajectory of African countries since the beginning of the 21<sup>st</sup> century? The first decade of the millennium saw promising growth and poverty reduction in much of the continent. Violence and fatalities dropped significantly as major conflicts in Liberia, Sierra Leone and the Great Lakes region were brought if not under full control at least to new states of stability. Anecdotal evidence and country case studies point to (sometimes unexpected) governance wins: a post-conflict country such as Rwanda has managed to reform its public administration to improve service delivery especially for health; and some countries, such as Botswana, have managed to safeguard their stability for decades and have built on this conducive environment to push forward selected financial management and regulatory reforms. In addition, the continent has witnessed a large number of peaceful electoral transitions to opposition parties, including in places such as Nigeria with legacies of authoritarian rule and civil conflict, even if the elections themselves pointed toward the existence of ballot rigging, intimidation and fraud.

Yet SSA has also been the stage of a stream of governance reform failures and policy reversals, and many countries continue to suffer from the consequences of poor governance. Since around 2015, a series of crises with mostly external origins – plunging commodity markets, the spread of insecurity and religious extremism, the COVID-19 pandemic, a rise in authoritarian forms of populism and a major shift in the geopolitical landscape – have revealed the underlying weakness of democratic institutions and state capacity in much of the continent. Based on a possible overly optimistic vision in 2000 (due to the current context at that time), many African countries, relying on the commodity super cycle between the late 1990s and 2008 have not undertaken the necessary governance reforms and have started to suffer from

> 2 This paper adopts the definition of governance offered by the World Development Report 2017 (Governance and the Law): “the process through which state and nonstate actors interact to design and implement policies within a given set of formal and informal rules that shape and are shaped by power.” This definition emphasizes the role that power, norms and incentives play in shaping the way formal government organizations and agencies work in practice. Although inclusive, representative institutions are an intrinsic good, governance here is also assessed with respect to the ability of institutions to make decisions and implement policies that deliver pro-poor development.

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