World Bank on Governance: A Critique

Author(s): S. Guhan
Source: Economic and Political Weekly, Vol. 33, No. 4 (Jan. 24-30, 1998), pp. 185-187+189-190
Published by: Economic and Political Weekly
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World

Bank

on

Governance

A Critique
S Guhan
The WorldBank - given its visibility, resources, prestige and leverage - is, in course of time, capable of distorting
the word 'governance' to make it acquire the kind of ideology-laden, question-begging connotation which it has
injected into it. If this goes uncontested, debate on governance will be marginalised by being confined to the
narrow and warped terms set for it by the World Bank. This has already happened with 'economic reforms' and
'structural adjustment', two other mantras in the World Bank's vocabulary.
ISSUES relating to politics, the state and
governmenthave attractedthe attentionof
the best minds, over space and time,
throughouthistory. Separatedby centuries
and continents, Aristotle, Confucius and
Kautilyahave theorised on them. Ancient
Indian epics, like the Mahabharata and
Ramayana, while describing a variety of
actualkingdoms, have thrown light on the
relationshipbetween society and polity on
which they rested.' The modern western
tradition has witnessed an unbroken
continuity of outstanding political
philosophersfrom Thomas Hobbes in the
16thcenturyto JohnRawls in the 20th. Such
being the case, it seems necessary to relate

relategovernanceto pluralistdemocracy(or
the formand values of politicalgovernance)
and, on the other,to pro-marketapproaches
to economic development(or the objectives
and content of economic governance).
GOVERNANCE

ACCORDING TO WORLD BANK

While it is problematicto speculateon the

strength, sustainability and sweep of this
convergence(or 'mega-trends'as they have
been called), whatis importantis to evaluate
the currentcoinage of 'governance'in terms
of its motivation,content and implications.4
For this purpose, it will be both topical as
well as importantto concentrateon theWorld
Bank's (WB) approachto governance for
- to an extent feasible and appropriate - the
the WB has been the principalprotagonist
currentinterestin 'governance' to this vast in the currentdebate on the subject with its
canvas. Is it only an ephemeral whirlpool initiative being paralleled or followed by
in a flowing river, a passing cloud in the othermultilateralfinancinginstitutions(the
firmament,or a less transientphenomenon? IMF, the African, Inter-American and
What factors have contributedto it? Who EuropeanDevelopmentBanks),the OECD,
are the initiators of the debate? What are and bilateraldonor agencies (e g, the ODA
their motivations and how have these in the UK).5
In the backgroundof its frustrationswith
determined the scope of it? And, what
content is carried by this relatively new implementationproblemsduringthe 1980s
in a number of African countries - involving
fangled word 'governance'?2
structural
In the 1980s, a numberof factors in the projectloansand,moreparticularly,
objectivesituation- worldwide- haveindeed adjustmentlending- the WB first raisedthe
drawnsharpattentionto various aspects of issue of governance in the context of Subgovernance: replacement of authoritarian SaharanAfrica,defining governance,rather
governmentsin the Soviet Unionandeastern laconically,as "theexerciseof politicalpower
Europe,their collapse altogetherin partsof to managea nation's affairs".6Clearly,this
Africaonaccountofexternalorcivil conflicts, debut of the WB into the discourse on
the proliferation of ethnic strife, the governance does not take us far since its
movementsfordemocracyandhumanrights definition is not only neutral between
in China and south-east Asia and for forms of government of fundamental
competitive democracy in Latin America importance to the nature of governance
and Africa.3 Concurrently, other issues, (viz, democraticor authoritarian)but even
more specifically related to the economic between 'good' and 'bad' governancesince
aspects of governance, have come to the both would, in their own ways, qualify as
fore:thesuperiorperformanceof pro-market the exercise of political power to manage a
economies in contrastto commandsystems, nation'saffairs.TheWB hasitself,therefore,
widespread inefficiencies in state-owned beencompelled,incourseof time,to elaborate
enterprises, fiscal crises provoked by on its definition.On the latest occasion, this
unsustainablelevels of public expenditures, has been done in its World Development
and endemic corruption in low-income Report 1997 (WDR) on 'The State in a
developingcountrieswhich could ill afford Changing World', while other and earlier
to countenance it. These streams have pronouncements,in its official documents
converged to form a triad of issues with and by its authoritativespokesmen,are also
governanceat the apex. On one hand, they germane for understandingwhat the WB
Economic and Political Weekly

January 24, 1998

wishes to convey through its notions of

governance.
Three main elements in the WB's
conception of governance can be
distinguished.First,aneconomic role forthe
state: this has been conceived as including
'five fundamental tasks', viz, (a) a legal
foundation, (b) maintaining a nondistortionarypolicyenvironmentwithmacroeconomic stability, (c) investment in basic
social services and infrastructure, (d)
protectingthe vulnerableand (e) protecting
the environment.7Second, a set of specific
policies (or 'policy reforms') required to
move toward such a state: these have been
spelled out in the so-called 'Washington
Consensus' and include, as the principal
ingredients, fiscal consolidation, reduction
and re-directionof public expenditures,the
reform and reduction of taxes, the
maintenanceof competitiveexchange rates,
financial,tradeandinvestmentliberalisation,
overallderegulation,andthe privatisationof
stateenterprises.X
Third,otherandessentially
non-economic aspects of governancewhich
the WB ha; not been able to ignore or leave
out from any reasonably meaningful
conception of it: these include electoral
democracy; transparency, accountability,
participation and responsiveness in the
processes of government;the assuranceof
safety and security to citizens; the nonarbitraryrule of law; effective enforcement
of contracts;the protectionof humanrights;
and even the reduction of military
expenditures.9
Before reacting to the substance of the
WB's notions of governance, it is in order
to register the point that its credentialsfor
advising citizens and governments of the
world on the subject would appear to be
limitedfromboththeoreticalandinstitutional
perspectives.Inits veryessence, governance
is a political issue while the WB is not an
academy of political philosophers;in fact,
it is forbiddenunderitscharterto takepolitical
considerationsintoaccountin itsoperations.1'
Accordingly, all that can be grantedto the
WB is that it has a legitimate stake and
concern in the capacity of its borrower
governments to efficiently implement (or
185

'govern') the projects and programmes

assisted by it. Following from this, its locus
standi to advise governmentson aspects of
governance,andto reasonablypersuadethem
to accept its advice, derives from and is
limited to the lender-borrower nexus.
Nevertheless, all those interested in
promoting an awareness of the need for
better governance could welcome the
initiativethatthe WB has been takingto do
so through its research and technical
assistance inputs for governanceimprovement programmes." No one can
dispute that improved economic
administrationis valuableeven if it is largely
limited to WB-assisted investments and is
only a partof any comprehensiveapproach
to governance. Furthermore, I would
unreservedlywelcome the WB's emphasis
on curbing corruption as part of good
governance and would not resent any
reasonableleverage it mightexercise in this
regard.
Leavingasidecredentialsandcompetence,
it is to a critiqueof the scope, substanceand
implications of the WB's conceptions of
governance that we may, therefore, turn.
Sucha critiquecould be madefromdifferent
perspectives and take different forms; and,
any critiquewill, necessarily,have to select
andemphasisesome concernsin preference
to others. My own problemswith the WB
on the subject of governance are basically
the following.
NOTNECESSARILY
AN
AN OPENECONOMY,
OPENPOLITY
Firstly, it is clear that essentially the WB
is notconcernedwiththeformof government.
The political components in its concept ot
governance - such as participation,
transparency,accountability,human rights
and so on - featurein its literatureas 'tagons' which are desirable insofar as they
could contributeto economic efficiency but
not strictlynecessaryas integralcomponents
of the notion. Liberal democracy, in this
view, could be of instrumentalvalue but
need not be of foundational or intrinsic
importance. It follows then, at the very
outset, that the WB's position would be
wholly unacceptableto those who believe
that an open, liberal democracyis the nonnegotiablebedrockof whatgood governance
must mean. No doubt, such a view could be
characterisedas doctrinal since it rests on
the axiomatic value of a free society. As
such, it can be endorsed or rejected but
cannotbe usefullychallengedon instrumental
grounds.However,thebelieverin theabstract
value of democracy can be permittedsome
satisfactionif even functionalconsiderations
were to confirm, or at least not undermine,
his faith.
It is useful, therefore,to recall reflections
and evidence on two topics relatedto form

186

versusefficiency in governance:one relates

to 'benevolent
(read,
despotism'
'developmental authoritarianism')and the
otherto the relationshipbetweendemocracy
and development.
On the former,
Montesquieubelieved that

is strongly connected with human

toconclude
development.Butit is premature
that this is a one-way causal relationship,
since we have not excludedthe possibility
that the level of humandevelopmentmay
be conducive to democracy. The second
positiveconclusionis thatdemocracyis not
an obstacle to economic growth or a fair
income distribution.

...despotismcouldbe benevolentbutthatit
remaineddespotism,and thereforehateful,
none the less. Althoughhe loved liberty
The other expert opinion comes from
with passion,he had no illusionsas to the
T N Srinivasan.15On the basis of an extenthe
the
risks,
sacrifices, agonisingchoices,
thedelicateanddifficultequilibria,thesocial sive review of the literatureon democracy
and political elasticity, the delays, the and development, he concludes:
compromises,the acceptanceof give and
While argumentshave been made for and
takethatlibertyinvolves.Hisfaithinliberty,
against the instrumentalrole of political
in what would now be called the 'open
democracy in promoting economic
society', was founded perhaps on the
development,neithertheorynor empirical
belief...thatprivateinterestsdid ultimately
evidence supported the arguments that
harmonise,that...mencould be rogues or
democracieswill notbeabletoraisedomestic
fraudsindividuallybut decentor honestin
savingsandtaxes to the extentrequiredfor
the mass.'2
rapidgrowthand to avoid diversionof tax
revenues to wasteful consumption, etc.
Equally strong were the views of John
Theoryandempiricalevidencealso did not
Stuart Mill on the subject:
support the hypothesis that authoritarian
It has long been a commonsaying, that if
regimes,regardlessof theircharacter,will
a good despot can be ensured, despotic
promotedevelopmentandavoidwaste. The
monarchy would be the best form of
only conclusion that one can derive from
government. I look upon this as a radical
theoryand evidence is that,first, a market
andmostperniciousmisconceptionof what
economy, by and large, is the most
is: which until it can be
formof economicmanagement
good governmenit
appropriate
from the perspectiveof development;and
got rid of, will fatally vitiate all our
second,while democracyis to be treasured
speculationson government.'3
for its own sake as a bastionof liberty,and
noted
furthermore
that
for
should
be
(It
a marketeconomy might make it possible
Montesquieu and Mill despotism was
to sustaindemocracyover extendedperiods
anathemaeven if it remained benevolent.
of time, authoritarianism
is not necessarily
Theirrejectionof it is considerablyvalidated
inconsistentwith the use of marketsfor
by the fact that, in the real world, the
economic managementand for promoting
benevolenceof despotscanbe deceptiveand
development.
is rarely sustained.)
In sum, then, apartfrom democracybeing
an intrinsicvalue, it could have a mutuallyDEMOCRACY
ANDDEVELOPMENT
interaction with human
The second issue relevantto the topic of reinforcing it has not
development;
proved to be an
forms of government is the relationship obstacle to
fair income distribution
growth,
between democracyanddevelopment:is an or
prudent fiscal management; nor have
initial measure of development necessary authoritarian
necessarilyscored
for the establishmentof democracy? Does better on governments
of these counts. Besides, an
any
democracy promote or inhibit economic importantfact of historyshouldbe takeninto
development or is it neutral in its effect? account, namely, that while authoritarian
Inrecentyears, anextensive literaturehas
have co-existed with market
been generated on these issues. We shall regimes
economies, democracyhas not been able to
confine ourselves to quoting from it the
with command systems - which
conclusionsof two recentandcarefulsurveys. go alongthat
suggests
sustainingdemocracycouldbe
On the basis of a detailed statistical
a good way to insurethe stabilityof market
exploration,SvanteErssonandJan-ErikLane economies as well.'6
come to the following set of findings.14 Their
Coming back to the WB, the criticismof
positivefindingis thattheinteractionbetween it is not that it has been in disfavour of
democracy and the quality of life is stable democracy- in fact, its tilt has been towards
over time. The negative findings are that
- but thaton such a centralissue
it has not been possible to establish a stable democracy
as the constitutiveformof governance,it has
relationbetween democracy and economic not
chosen, in clearandringingtones,to take
growth or between democracy and degree a stand against authoritarianregimes and
of income equality. On this basis, they
squarelyin favourofdemocraticones. While
conclude:
the WB's supportfor an open economy has
The first positive conclusionthat we may been loud and long, its endorsementof an
drawis thatdemocracytendsto go together open polity has been muted at best and
withhumandevelopment.Thus,democracy ambiguous at worst.'7

Economic and Political Weekly

January24, 1998

disinterestedreligious or academicGuru.Its
preceptorialpracticesbeginwithpropaganda,
extend to persuasion, and end up with
Be that as it may, let us proceed to the
leverage. The firstconsists of the persistent
contentof governance accordingto the WB.
propagationof its ideology throughwidely
accessible and disseminated documents,
CharlesLindblom begins his classic study
of 'Politics and Markets' by saying that
notably the WDR. Persuasion, which
"Asidefromthedifferencebetweendespotic
follows, tends to take place largely through
a 'BankWorld'of economists, officials, and
and libertariangovernments, the greatest
some politicians who are friends-in-court
distinction between one government and
of the WB with third world governments.
anotheris in the degree to which the market
They have been variously called
replacesgovernmentorgovernmentreplaces
'transnationalepistemic communities' of
market". For the WB, the latterdistinction
is not of subsidiary but sole importance.
technocrats, particularly those trained as
economists in American and European
This will be clearfromits description,earlier
Universities; 'change teams' consisting of
summarised,of the functional role of the
technocrats "with few or no links to the
statein socio-economicgovernance(thefivefold tasks) and the type of economic
politicalarena...politicallyisolatedandutterly
dependent on the head of the state";
management consistent with it (the
'technopols';22 or simply, in common
WashingtonConsensus).Inthisbackground,
there are a numberof aspects of the WB's
parlance, the 'WB mafia'. As might be
expected, persuasionthroughsuch channels
conceptionof governancethatcall forserious
is often implicit (even insidious) ratherthan
contestation.
patently or publicly provided.23
Firstly,it is clear that the WB's blueprint
In the final analysis, however,the WB has
is narrowlytechno-economic. Simply put,
to fall back on the leverage which it enjoys
its paradigmatic state is that whose
andexercises throughits lendingoperations.
governmentis one which not only 'governs
The cluster of issues which such
theleast' but,regardlessof its character,also
'conditionalities' involve is quite familiar:
one which is 'administeredthe best'.'xWhat
the degree to which conditionality may
intereststhe WB is not 'governance' in any
infringe on sovereignty in principle or, in
comprehensivesense butonly 'state-versusmarket' issues in the realm of economic
practice,provokesdomesticpoliticalprotest;
the form in which it is clothed; the manner
administration.The WB deludes itself and
andextent to which it may get enforced;and
othersby purportingto be 'politics-free', for
whetherconditionalities,especiallythosethat
the truthis thatthe type of state it advocates
extend beyond the WB's traditional
is as mucha matterof politics as economics.
involvementin covenantsrelatingto project
Its 'five-fold tasks', for instance, do not
andprogrammelending,arelikely to become
amountto much more than an updatingof
the minimal 'night watchman'state so as to
counter-productive.These andrelatedissues
are likely to become increasinglyactive and
include environmental protection and a
sensitive. The WB and IMF have already
modicum of social protection for the
formulated guidelines to promote their
vulnerable. In particular,the ideological
concerns relatingto governance. The most
blue-printof theWB leaves outredistribution
recent additionto multilateraldevelopment
and industrial development, two major
concerns not only of developing countries
banks,theEuropeanBankforReconstruction
andDevelopment,is committedby itscharter
but also of internationalbodies such as the
to use its lending 'to promote multi-party
UNCTAD, UNDP, UNICEF, UNIDO, and
WIDER.'9 As such, the role within which
democracy, pluralism and market econoOn the other hand,
mics'. On the other hand, such objective
theWB seeks to confine the stateis not likely
A sourceof even greateruneasewas a set considerationthat the subject has received
to be ethically acceptable or politically
of countries that was not anomalous does not hold out much promise that
sustainableto developingcountrieswithhigh
successesbutapparentfailures:theSouthern
levels of poverty and inequalityand, by the
governance-relatedaid conditionalities are
Cone
economies(Chile,Argentina,
Uruguay) likely to be effective in the lightof the severe
same token, to enlightened sections of the
thathad enactedliberalisationexperiments
limitationsthatapplyto theirconceptionand
international development community,
in the late 1970s and suffered economic
academic or institutional.
application.24
collapse in the early 1980s.
Secondly, it is not clear how useful the
(Incidentally,it is interestingand instruKahler also draws attentionto a careful ctive thatEdwardMason and RobertAsher,
WB's standard prescriptions for deregulation,liberalisation,privatisation,fiscal in-house assessment of IMF-supported the historians of the WB, cautioned the
discipline,andoutwardorientationarelikely adjustmentwhich at best suggests modest institution, nearly a quarter century ago,
to be from the point of view of formulating economic effects from the standard from pursuing ideology-based conditioviableoperational plans for 'reforms'. All adjustmentprogrammes- greatest on the nalities in the following wise words:
thatcan be expected from an international balanceof paymentsandthecurrentaccount,
If developmentmeanssomethingmorethan
institution that seeks to advise multiple, negligible on the rateof inflation,uncertain
self-sustaininggrowthof GNP,or GNP per
countries are on the growth rate, and indefinite when it
diverse, developing
is there at least a roughconsensus
capita,
prescriptions,of a wide generality, on the came to distributionaleffects.2'
on what these otherelementsare and how
broadpathand principalcomponentsof the
Fourth,it is well to recognisethatthe WB,
their weight shouldbe assessedin relation
'reformprocess'. However, even to those whilst dispensing its policy advice, is not a
to economic growth? The answerto this
SOME SPECIFICCRITICISMSOF WB ON

GOVERNANCE

Economicand Political Weekly

governmentswhich are persuadedto travel

on this path,thereare a numberof complex
and uncertainissues that are likely to make
the road to reform rocky: the pace and
sequencing of the measures involved, the
dovetailing of stabilisation and structural
adjustment and, most importantly, the
political management of the transitional
calculusof the reformprocessin which costs
are concentrated in the short term while
benefits tend to be diffuse and delayed. On
such crucial issues, the WB cannot, quite
understandably,provide advice that fits a
wide varietyof countrieswithheterogeneous
political, economic and social conditions.
The WB, no doubt,attemptsto take this into
accountby giving a numberof examples of
success and failure in individual countries
in the kindof do-it-yourselfboxes one finds
in its reports. These too, however, are not
particularlyhelpful for no two countriesare
close enough in their political conjunctures
or economic circumstancesto feel assured
tlhatwhatmightbe sauce for the goose could
turn out to be the same for the gander.
Thirdly, and more importantly, the
evidencethathasaccumulatedsince theearly
1980s on the efficacy of the standardWB
prescriptionsis far from conclusive. From
a largeliteratureon the subject,we shalljust
referto a succinctappraisalby Miles Kahler
who draws attentionto two importantsets
of exceptions which underminethe WB's
orthodoxy.2' He points out:
One set of economic successes - the east
Asian exportersof manufactures- were
oftenportrayedasfineexamplesof orthodox
prescriptions, but closer scrutiny
demonstratedthat their patternof policy
hardly fitted the neoclassical mould
Althoughtheirexchangeratepolicies were
not biased against exports and fiscal and
monetarypolicywasprudent,thesedynamic
exportersdisplayedhighlevelsof protection
in their import - competing industries,
substantial
publicsectors,andinterventionist
governments.

January24, 1998

187

questionwould seem to be "no".However

vague the conceptof economic aspectsof
developmentmay be, it is infinitelyclearer
than the concepts of political and social
aspectsof development.
Whetheror not there is such a consensus,
is it appropriatefor an externalfinancing
agencyto substituteits own views on the
nature of development for those of a
borrowingcountry?Againtheanswerwould
seem to be "no". It is difficultenoughfor
such an agency to persuadea borrowerto
take relevantinputs into account without
enteringinto, or attemptingto replace,the
politicalprocessby meansof which social
preferencesget defined.25
Fifthly, an inherent contradictionin the
relative role envisaged by the WB for the
stateversusthemarket,duringtheadjustment
process,has been commentedupon by more
than one discussant of the subject.26 This
is related to the circumstance that, in the
transitionfrom a relatively dirigiste to a
market-oriented one, the state needs to be
particularlystrong in political termsto face
and overcome challenges from a variety of
entrenchedinterest groups: e g, from rentseekers and rent-givers (in the course of
deregulation),establishedentrepreneursand
importers(out-wardorientation),the labour
aristocracyin thepublicsector(privatisation),
the bureaucracy and subsidy-mongers of
various kinds (fiscal consolidation) and so
on. The paradox - what Kahler calls the
'orthodoxparadox'- lies in the expectation
thata politically strong state will be willing
to shrinkits role as an economic agent or,
in thealternative,thata statewhich is willing
to retreatfrom an interventionistrole in the
economy will find it politically feasible to
do so. In the face of this dilemma, the twopart advice in the latestWDR (of 1997) that
the state "should match its role to its
capability", in the first instance, and, at a
later phase, "improve its capability by
reinvigorating public institutions" would
appearto be perversein that it puts the cart
before the horse: for it is precisely early in
adjustmentthat the state has to wax while,
laterintheprocess,withthe marketassuming
an expanded role, the state can logically
afford to wane.
Sixth, there has throughout been an
asymmetryin the WB's advice-giving when
it comes to developed countries versus the
developing ones, an invidiousness that is
inexcusablein a global institutionowned by
both sets of countries and committed to
internationaldevelopment. For the WB,
'adjustment'has always hadto be postulated
as a unilateral 'falling in line' on the part
of the developing countries to a given
environment(in aid,trade,debt,
international
technology and investment) ignoring that
this environmentlargely reflects the 'rules
of the game' set by the industrialised
countries.InrespectofNorth-Southrelations,
Economicand Political Weekly

there has, no doubt, been a markedshift amountingto a turn-around- between the

eraof dialogueandnegotiationsin the 1970s
and the stringent discourse of 'structural
adjustment'in the 1980sandbeyond. Various
factors- the ebbing away of OPEC power,
the debt crisis, the decline in aid flows, the
sharpincreasefollowed by the steep decline
in private debt, the growing importanceof
investment flows and financial markets have all contributedto effect this transition.
However, it is not as if the WB has been
merely sailing with the currentfor even in
the 1970s it remained in the doldrums,
unswayedby the winds of the North-South
dialogue.27
As faras governanceis involved, no elaborateargumentis requiredto appreciatethat
its nationaland internationalaspects cannot
be discussed in isolation in an increasingly
inter-dependentworld- whetherthey relate
to environmental protection, energy,
disarmament,human rights, humanitarian
crises, international social policy or
corruptionandcrime,in additionto traditional
concernsrelatingto peace-keeping,money,
finance, foreign investment and trade.
Following the BrandtCommission's report
in 1980, a numberof similar 'independent
commissions' composed of eminent
membershiphave reportedon issues such as
South-South co-operation (Nyerere),
environment(Brundtland)anddisarmament
(Palme), culminatingwith the reportof the
Commissionon GlobalGovernance(Ingvar
Carlsson) in the mid-1990s. The
establishmentof theWTO,atthe conclusion
of the Uruguay Round, has been a major
breakthrough in international economic
organisation. This series of reportsand the
WTO have indicated a whole agenda for
andcomplementingthe
reform,restructuring
structureof internationalorganisation;for
promotingthe rule of law in international
relations;as well as thepropagationof values
in nationalgovernance. Given this context,
it is a grave shortcomingthat the WB is
yet to realise or admit that governance is
indivisible between its international and
national dimensions.
CONCLUSION

To conclude, we have attemptedto show

that the theory and applicationof the WB's
notionof governanceis riddledthroughand
through with a variety of problems.
Fundamentally,thephilosophythatunderlies
it is partial, prejudiced and potentially
pernicious.Despitethetediousnessinvolved,
it has, perhaps, been worthwhile to have
taken some time and trouble to bring out
these aspects because the WB - given its
visibility, resources, prestige and leverage
- is, in course of time, capableof distorting
the word 'governance' to make it acquire
thekindof ideology-laden,question-begging

January24, 1998

connotationwhich it has injected into it. If

this goes uncontested,debateon governance
will be marginalisedby being confined to
the narrow and warped terms set for it by
the WB. This has already happened with
'economic reforms' and 'structural
adjustment',two other mantrasin the WB's
vocabulary. Through constant repetition,
the WB seeks to convince - or at least hopes
to lull - its audience into believing that its
preferredprescriptionsare 'structural'and
'reformist'while it could well be arguedthat
instead some of them are 'superficial' and
'retrograde'.28Perforce,therefore,theWorld
Bankhas to be takenseriouslyif only because
it takesitself so seriouslyand is in a position
to mislead so many others by influencing
them to take its pronouncementsequally
seriously.
Notes
[This is a slightly revised version of the first
section of a paper titled 'Three Pieces on
Governance' presented at the Workshop on
Governance Issues in South Asia held at the
Economic Growth Centre, Yale University, on
November 19, 1997. I am grateful to T N
Srinivasan for permission to publish it separately. To him and to Susan Rose-Ackerman,
I am also indebted for comments on the earlier
version.]
1 Of particular interest is the account of
Ramrajya or the rule of Rama [Adigalar
1994]. According to Kambar,the authorof
the epic's Tamil version, Rama was not just
a constitutional monarch but a thoroughly
democraticone; the people were the 'breath'
of the body politic while the rulerrepresented
only its organs and limbs; Rama was the
'loyal' king of his 'royal' citizens. The society
on which such a polity was based was one
where virtues and excellences were
conspicuous by their absence: there was no
charitybecause no one was poor; no role for
power because of the absence of conflict;
no notion of truth because falsehood was
unknown; and with enquiring minds all
around, no primacy for knowledge. More
generally, on theories of government in
Ancient India, see Altekar (1997) and
Coomaraswamy (1993).
2 Thereis, forinstance,no entryon 'governance'
in The Encyclopaedia of Social Sciences or
in The Oxford Companionto Politics of The
World, 1993.
3 Externalconflict and/orextended civil strife
haveresultedin 'humanitariancrises' in recent
years in a numberof countries:Afghanistan,
Cambodia, Mozambique, Rwanda, Somalia,
Sudan, Zaire. In 1995 alone, 32 ethnic wars
orconflicts were reportedin as manycountries
[Bardhan 1997].
4 Fukuyama (1993), Boeninger (1991). See
also comments of Joan Nelson and Sarwar
Lateef in World Bank (1991) questioningthe
sweep and sustainabilityof the mega-trends.
5 For a review of definitions of governance
adopted by various agencies, see Box I in
World Bank (1994).
6 World Bank (1989).
7 World Bank (1997).

189

8 Williamson (1994).
9 Landell-Mills and Serageldin (1991)
following UN Declarationof Human Rights
1948 and UN Covenantson Economic, Social
and CulturalRights (1976) and on Civil and
Political Rights (1976); World Bank (1994);
World Bank (1997)
10 For a careful and rigorous interpretationof
the WB's relevant Charter provisions see
Shihata (1990).
11 These programmesmainly relate to public
sector management,accountability,the legal
frameworkfordevelopment,andtransparency
and information. For a review, see World
Bank (1994).
12 Morris (1969).
13 Mill (1910), p 217.
14 Ersson and Lane (1996).
15 Srinivasan (1997).
16 Lindblom (1977) points out (p 5) "Liberal
democracy has arisen only in nations that
are market-oriented,not in all of them but
only in them...The tie between market and
democracyis on many counts an astonishing
historical fact".
17 Lal (1994) attempts to provide what might
be called a meta-instrumental
justificationfor
theWB's instrumentalapproachto democracy
by arguing: "To avoid drowning in the
'treacherouswaters"of slipperyconcepts like
'participation' and 'democracy', it may be
best for the World Bank to concentratenot
on the forms of government but the
chlaracteristics of good government - on
policies. As the World Bank is chargedwith
advising on the latter and forbiddento deal
with the former,it shouldfind this-congenial."
18 On this, BernardCrick's sharp comment is:
"There we those who think administration
can always be clearly separatedfrompolitics,
and that if this is done, there is really very
little, if anything,that politicians can do that
administratorscannot do better...'For forms
of governmentlet fools contest, whatever is
best administeredis best' is the hackneyed
andsubversivesloganofthis dislikerof politics
- the 'administrationof things and not of
man' will take place only if men are treated
as things" [Crick 1962].
Referring to those who conceive of
governmentas "strictlya practicalart",John
Stuart Mill says that they look upon it "in
the same light (difference in scale being
allowed for) as they would upon a steam
plough or a threshingmachine" [Mill 1910:
p 188].
19 On the state as entrepreneur in lateindustrialising countries see Evans (1992)
following Gerschenkorn(1962).
20 Kahler (1992).
21 Khan (1988).
22 The sources for the three expressions are
Evans (1992), Waterbury(1992) and The
Econtomist,London, respectively.
23 After structuraladjustmentprogrammeswere
initiated in India in 1991, the Indian finance
minister, Manmohan Singh, a 'technopol',
initially refusedto share his 'Letterof Intent'
to the IMFwithparliament.See also Bhadhuri
and Nayyar (1996) for a description of the
'reward' and 'rotation' systems whereby
bureaucrats and economists working for
developing countriesare co-opted by the WB
and IMF. They remark(p 63): "For some
of these mandarins,it would seem that there

190

is a revolving door between the ministry of

Finance in New Delhi (or elsewhere in the
developing world) and the World Bank or
the IMF in Washington DC".
Hawthorn and Seabright (1996); Kahler
(1992); Landell-Millsand Serageldin(1991);
Nelson (1992); and Srinivasan (1996).
Mason and Asher (1973), p 485.
Evans (1992); Frischtak(1994); Haggardand
Kaufman (1992 b); Kahler (1990).
See Guhan (1981).
That'reforms'maybe madeto meandifferent
thingsto differentpersonsis illustratedby the
following in Paz (1997), p 126 "Years ago,
walking with a foreign friend who had
recently arrived in Mexico city, I showed
him one of our most beautiful avenues, the
Paseo de la Reforma. He looked at me in
surpriseand said, 'But Mexico is a Catholic
Country'. I had to explain to him that the
word 'Reforma' does not refer to the
religious revolution of Luther and Calvin
that changed the world, but ratherto some
laws created by President Benito Juarez in
the last century."

Liberalisation and Economic Adjustment,

Oxford, New York.
Hawthorn,Geoffrey and Paul Seabright(1996):
'Governance,Democracy and Development:
24
A ContractualistView' in Leftwich (1996).
Kahler, Miles (1990): 'Orthodoxy and Its
Alternatives: Explaining Approaches to
25
Stabilisation and Adjustment' in Nelson
26
(1990).
- (1992): 'External Influence, Conditionality,
27
and the Politics of Adjustment' in Haggard
28
and Kaufman (1992a).
Khan, Mohsin S (1988): The Macro-Economic
Effects of Fund-Supported Adjustment
Programmes: An Empirical Assessment,
Working paper, IMF, Washington DC.
Lal, Deepak (1994): Participation, Marketsand
Democracy, World Bank, Washington DC.
Landell-Mills, Pierre and Ismail Serageldin
(1991): 'Governanceand the ExternalSector'
in World Bank (1991).
Leftwich, Adrian (ed) (1996): Democracy and
Development, Polity Press, Cambridge.
Lindblom,CharlesE( 1977):PoliticsandMarkets,
the World's Political-Economic Systems,
Basic Books, New York.
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Voting for Reform, Democracy, Political

Economic and Political Weekly

January24, 1998