IFPRI Forum

March 2006

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"Good governance is perhaps the single most important factor in eradicating poverty and promoting development," Kofi Annan said in 1998. In recent years governance has taken center stage in the international development arena. Donor organizations increasingly make their funding dependent on governance performance. Developing countries, too, have placed good governance prominently on their own agenda. NEPAD, the New Partnership for Africa's Development, for example, highlights "good governance as a basic requirement for peace, security, and sustainable political and socio-economic development" as its first principle. Yet making governance "good" in ways that increase the well-being of the majority of the world's poor people, who live in rural areas and depend on agriculture for their livelihoods, can be particularly challenging.

Of course, some of the challenges related to understanding and improving governance apply to both rural and urban areas. To begin with, defining good governance involves value judgments and thus is not subject to universal agreement. A widely used data set compiled by the World Bank measures six dimensions of good governance: (1) voice and accountability, (2) government effectiveness, (3) regulatory quality, (4) control of corruption, (5) rule of law, and (6) political stability. Yet are not social protection, gender equity, and environmental protection also elements of good governance? Moreover, the links between governance and economic development are complicated and far from clear. Bangladesh, for example, shows extraordinary progress in social indicators-such as eliminating gender bias in education and reducing infant and maternal mortality at historic rates-yet Transparency International lists Bangladesh, together with Chad, as one of the most corrupt countries in the world.

Achieving good governance in rural areas has its own difficulties. Providing public goods and services in an efficient and equitable way to rural areas can be tricky. Efforts to improve governance are subject to the same urban bias inherent in other development activities, and the political incentives to improve governance in rural areas are often low, even in well-functioning democracies like India, where the rural poor do vote.

In addition, there has been little research on the aspects of governance that matter for the rural poor. Many of the data used to construct governance indicators are based on surveys of entrepreneurs in the formal industrial sector. How effective a government is in, say, creating a conducive business environment for a foreign investor is not necessarily related to its effectiveness in addressing the needs of poor farmers and in improving the living conditions in rural areas.

Another governance challenge for agricultural and rural development is the fact that agriculture is subject to a variety of market failures. In remote areas and in early phases of agricultural development, farmers cannot easily get access to inputs, technologies, credit, and output markets. While the public sector can help overcome these market failures, its involvement is often associated with government failure, as experiences with subsidized agricultural credit and parastatal marketing institutions have shown.

In recent decades, civil society movements, governments, and donor organizations have promoted three major types of strategies to improve governance in rural areas in view of both market and government failure. First, there have been strategies to improve the ability of the rural poor to exercise their voice, demand public services, and hold service providers accountable, through, for example, political decentralization, local leadership training, transparency movements, participatory development methods, and use of vouchers. The state of Karnataka in India has, for example, introduced a social audit, which empowers local communities to judge the quality of development projects in relation to the expenditure incurred. Second, there have been strategies to improve the supply of public services, through, for instance, public sector management reforms, public-private partnerships, contracting out of services, pluralistic forms of service delivery, and service provision by nongovernmental organizations (NGOs). Third, strategies have promoted self-help and collective action, through community-based organizations, resource user groups, agricultural producer organizations, and cooperatives, among others. In Uganda, for example, the public sector is now contracting out agricultural advisory services to private providers and NGOs, and the representatives of farmers' groups have a say in the choice of the service provider. In spite of this wide range of efforts to improve governance for agricultural and rural development, the empirical evidence on their results is mixed, and there are major knowledge gaps regarding the most promising strategies in a given situation.

How can research contribute to more effective governance in rural areas? Although sovereign citizens, and not researchers, are responsible for identifying and promoting the aspects of governance that are of value in their own right, research can play an important role in identifying the dimensions of governance that are instrumental for reaching goals that societies have agreed to pursue, such as the Millennium Development Goals. Research is also important to analyze what governments, civil society, and the private sector can actually do to improve governance. Finally, given the diverse conditions that characterize agriculture and rural areas, generalized models of improving governance have not worked, and "best fit" has proved to be more important than "best practice." In view of this experience, research can make an important contribution to improving governance that matters for the rural poor by enhancing our understanding of what works where and why.