# 2 Conceptualizing and measuring governance quality in a comparative context

Governance is a fuzzy yet fashionable buzzword and its use in the literature has exploded in recent years. Dixit (2008) notes that there were only 4 citations in EconLit in the period 1970-1979 compared to 15455 in the most recent period of 2000-2007 and currently Google lists more than 152000 pages of this literature. According to American Heritage, Random House and Merriam Webster dictionaries, governance is equated with government and is defined as the ”exercise of authority and control” or ”a method or system of government and management” or ”the act, process or power of governing”. Huther and Shah (1998) defined governance as ”a multi-faceted concept encompassing all aspects of the exercise of authority through formal and informal institutions in the management of the resource endowment of a state. The quality of governance is thus determined by the impact of this exercise of power on the quality of life enjoyed by its citizens” (p.2). The World Bank Governance and Anti-corruption (GAC) Strategy (World Bank, 2007) defines it as ”the manner in which public officials and institutions acquire and exercise the authority to shape public policy and provide goods and services” (p.3).

For our current purpose, none of the above definitions with the sole exception by Huther and Shah, is helpful in serving as an operational guide to carry out a comparative review of quality of governance across countries or even of one country over time. This is because of their singular focus on the processes/institutions which do not lend themselves to easy or fair comparability across countries and sometimes not even within one country without conducting deeper analytical studies. There can be little disagreement that same processes and institutions can lead to divergent governance outcomes just as dissimilar processes could yield similar outcomes in two different countries. For example, anti-corruption agencies in countries with fair governance helps curtail corruption but in countries with poor governance prove either to be ineffective or worse a tool for corrupt practices and victimization (Shah, 2007). As another example, budget secrecy prior to its presentation to the parliament is just as important under parliamentary form of government as in Canada, UK, India, New Zealand, as open and participatory budget determination process is to presidential form of government as in the USA. There can be little disagreement that both types of processes have the potential to advance public interest but may succeed or fail in different country circumstances. During the past two decades, we have also seen that single party dominant political systems in China, Malaysia and Singapore have shown dramatic results in improving governance outcomes whereas pluralistic party systems have also shown positive results in other countries such as Brazil and India. Similarly monarchy has shown positive results in UK but unwelcome results in Nepal. Even similar electoral processes do not always lead to representative democracy and may instead yield aristocracy (elite capture) in some countries and corrupt oligarchies in others. In fact, Aristotle’s main argument for elections was based upon the premise that these would produce aristocracy, a form of government he considered superior to median voter rule (see Azfar, 2008). Andrews (2008) argues that such ”good governance picture of effective government ... constitutes a threat, promoting isomorphism, institutional dualism and ”flailing 3