Good governance in sustainable development: the impact of institutions

Abstract

The possibilities for good governance depends on institutional structures and the economic resources available for ensuring governance. In some cases centralised governance structures are inefficient. In other cases, decentralised structures turn out to be inadequate. In India decentralisation of power to village level has not improved the efficiency of rural development. Decentralisation of power, it is said, by facilitating the empowerment of people in local communities can contribute to more sustainable development. On the other hand, in India, the delegation of power to the states in some cases has resulted in the destruction of the environment. Thus centralised and decentralised governance structure have both merits and demerits. Preservation of the environment which is essential for sustainable development cannot be achieved unless the pressure on forest and natural resources is reduced. This cannot happen in the absence of appropriate property rights of local communities and of rural women. In West Bengal as well as in the central Himalayan region in India it has been found that the disappearance of community control and restrictions on the user rights of villagers reduced the incentive and ability of villagers to use forest sustainability. On the other hand, in Russia, pristine forests are being degraded because of lack of resources of the weak central government. Good governance also depends on appropriate institutions. Corruption, bureaucratic inefficiency, inefficient and corrupt law enforcement agencies undermine the capacity of institutions to facilitate good governance for sustainable development. Corruption and rent seeking activities can grow even in an economy which has tried to apply outward oriented economic policies if an appropriate institutional environment does not exist. A state which assumes predatory or semi‐predatory status can systematically incapacitate all institutions for good governance and effective implementation of policies. Thus formulation of policies cannot ensure effective implementation in the absence of good governance which in turn cannot be achieved in the absence of appropriate institutions. Hence, sustainable development requires good policies and effective provision of institutions conducive to good governance.