INTRODUCTION

The concept of governance, is not new. It is as old as human civilization. It simply

means the process of decision making and the process by which decisions are
implemented. Thus, Governance means the exercise of political power to manage a
nation’s affairs.

There is no accepted definition of governance. There is divergence of opinion about the

meaning of governance. The word “Good Governance” derives from the Greek verb
“kubernao” which means “to steer”. The dictionary meaning of governance is way of
governing. It refers to a process or act or function of exercising authority to regulate
affairs of man in a given territory. Good Governance implies the process of decision-
making and its implementation free from abuse and corruption. In recent years, the issue
of good governance is widely regarded as one of the key ingredients for poverty
reduction and sustainable development.1
In 1994, the WORLD Bank gave a definition of governance. “Governance is epitomized
by predictable, open and enlightened policy-making (I.E., transparent processes); a
bureaucracy imbued with a professional ethos; an executive arm of government
accountable for its actions; and a strong civil society participating in public affairs; and
all behaving under the rule of law”. Subsequently in 1998 World Bank’s annual report
Governance in Asia: From crisis to Opportunity, presented a more cogent concept of
good governance. The report elaborates four key components of good governance:
accountability, transparency, predictability and participation.2
Corruption can be defined as the illegal actions undertaken by governmental officials
to enrich themselves. It is the behaviour which deviates from the formal rules of conduct
governing the actions of someone in a position of public authority because of motives
like wealth, power or status.

Corruption and GG

Good governance is said to exist only when the level and magnitude of corruption is at
a tolerably low and minimum level. A cursory reading of history would reveal that
corruption has always existed at any stage of civilization. It is very difficult to quantify
corruption as it is harder to define it. It results in erosion of confidence in public
institutions, reduces the scope for good and quality of investment and raises the
insecurity and vulnerability of the poor.

Corruption in public life typically occurs in a few key areas, regardless of a country’s
political structure or level of social and economic development. In general, it is most

1
Banasree Devi; “Good Governance and its Working: at the Indian Context”, International Journal of
Interdisciplinary Research in Science Society and Culture(IJIRSSC) Vol: 1, Issue:2, (December Issue), 2015,
p.79
2
World Bank, “Governance in Asia: From Crisis to Opportunity,” Annual Report 1998, available at:
www.worldbank.org
likely to occur where the public and private sector meet and there is direct responsibility
for the provision of desired service or the application of specific regulations or laws.
Corruption also finds its place among politicians who engage in corrupt practices to
keep themselves in power. It has been argued that such pervasive corruption undermines
good governance and far from contributing to development, it damages economic
growth and development.

The following damaging consequences for governance due to corruption have been
spelled out.
 Firstly, in third world societies it has been seen that corruption leads to the
misallocation of economic resources and thus distorts public policy.
 Secondly, it damages economic development and growth as it distorts
investments.3
 Thirdly, it has undermined the governmental institutions such as customs,
taxation and other revenue generating departments and thus reduces public
revenues.
 Fourthly, a layer of bureaucrats and middlemen have emerged, depending
entirely on taking bribes, that is more respectably known as transaction cost.
 Fifthly, corruption has led to massive human and capital flight.
 Finally, all the above consequences have undermined social and political
stability, social and political fabric conducive to invest and economic growth.

The high level of corruption in India has been widely perceived as a major obstacle in
improving the quality of governance. While human greed is obviously a driver of
corruption, it is the structural incentives and poor enforcement system to punish the
corrupt that have contributed to the rising curve of graft in India. The complex and non-
transparent system of command and control, monopoly of the government as a service
provider, underdeveloped legal framework, lack of information and weak notion of
citizens’ rights have provided incentives for corruption in India.

CORRUPTION AND GOOD GOVERNANCE

Corruption and good governance are antagonistic forces which actively operate in any
developed or underdeveloped country. While corruption spreads with leaps and bounds,
good governance is to be built brick by brick. Relative strength of corruption and good
governance determines the state of success or failure of the government to achieve
development objectives within a welfare state. Corruption flourishes when the
government of a country fails to strengthen the measures of good governance on a
regular basis. Periodic attempts of defensive nature against corruption do not produce
the desired results of social welfare. In order to introduce a strategically sound system
of good governance, it is necessary to examine the meaning and methods of corruption
which threatens the existence of good governance.

3
Paolo Nauro, ‘Corruption and Growth’ The Quarterly Journal of
Economics, Vol. 3, No.442, Aug. 1995, pp. 695-699.
Although corruption is a global phenomenon that is affecting all the countries across
the globe, this problem has particularly adverse implications for poor countries. The
cost of corruption can be understood in four areas: political cost in terms of affecting
democracy and rule of law, economic cost by depleting of national wealth, social cost
by undermining people‟s trust in political system and its leadership and environmental
costs in the form of environmental degradation. Corruption is present at almost all
administrative levels and main problems include biasness of policies of anti-corruption
bodies, patronage, exemption of state institutions from prosecution and nepotism.

Institutionalization of Corruption
When corruption is left unaddressed it becomes the institutional norm. The result is
pernicious for public administration as competent and honest employees are deterred
from working for government, further reducing institutional capacity and effectiveness.
Inadequate salaries of civil servants, curtailing their authority and political victimization
are all institutional drivers of corruption. On an individual level, “Demonstration
Effect‟ has a significant impact on the behavior of public officials when they observe
how others employed in corporate sector or working in foreign countries are able to
maintain a very high standard of living, they too desire similar benefits, sometimes
resorting to corrupt practices in the process. Another reason leading public servants to
disregard ethical conduct is that the corrupt officials receive a sort of covert institutional
praise in terms of knowing how to “get things done”, and being "smart enough" to
assume an independent role outside formal boundaries of authority.

Governance involves all those activities which are associated with administering a
country or an institution. It is related to decision making that defines expectations of
citizens, dispensation of power, verification of performance as well as leadership
processes. Governance is based on authority, responsibility, influence, and
accountability. Authority means assigning legal power to officials for decision making
as required. Responsibility requires that decisions will be owned and vouched for.
Influence allows the officials to be heard and obeyed. Finally, Accountability holds the
official answerable for their decisions and actions.

Crisis of Good Governance

corruption has spread with leaps and bounds while in comparison initiatives to improve
governance have been weak and uneven, ultimately culminating in arrested
development and lost opportunities.