3.2 Governance

All societies create systems for managing social relationships, for allocating and exercising authority, and for distributing resources. Within some such systems are explicit, formal rules such as those codified in laws and regulations. Just as significant in social contexts are the informal, unwritten rules which make up norms, what is accepted and not accepted within any set of social relationships. These contribute to managing conflicts in social interactions. For instance, road safety is ensured by implementing a non-negotiable law regarding driving on the left or right-hand side of the road. Breaking the rule is met with punitive measures such as a jail sentence.

Take inter-generational relations as a further example. While it does happen that children often end up caring for and providing for their parents, this is usually an exceptional circumstance and there will be institutional responses, whether formal or informal, to support such juvenile carers. However, the norm of managing these generational relationships and allocating authority is that parental generations look after their children. When such rules are broken, and conflict develops, other rules come into effect, leading in some cases to the legal abrogation of parental authority and placing of children into foster care on the behalf of a governing authority.

Activity 3: The importance of good governance

Timing: 20 minutes

Watch Video 1, or read the transcript, in which Dr Mo Ibrahim, a British-Sudanese businessman and founder of the Mo Ibrahim Foundation, speaks about governance in Africa. How does he see the relationship between governance, development and development aid?

Download this video clip.Video player: Video 1: Mo Ibrahim: Governance matters for Africa – and for everybody else!

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Transcript: Video 1: Mo Ibrahim: Governance matters for Africa – and for everybody else!

MO IBRAHIM

Good governance is important. It’s important for all of us. Of course, it’s especially more important for us in Africa for various reasons, which I’ll try to go through them. Africa is a wonderful continent. It’s huge; second largest continent on Earth. There’s immense resources, and most of African territories actually have not really been explored for resources. But what we’ve discovered so far is really huge.

And there are not many African people around. We have just 1 billion people. That’s two thirds of India, two thirds of China. You can fit both China and India into Africa, and still, you have a lot of space to fit other people as well. It’s a very rich and huge continent, yet African people are poor, very poor.

And the question is, why are we poor? If we have all this land, wonderful land, seashores we have, why are we poor? And for me, the answer was obvious, was simple. We are poor because of misrule, because we are badly governed. What happened over the last 50 or 60 years, actually, is that we missed a lot of opportunities.

And it is sad to go back and see that at the moment of independence of most African countries – and actually, the African Union celebrated, this year, 50 years of its inception – that countries like Ghana, Egypt, and many other countries have higher income per capita than South Korea, or the two Koreas at the time, or China, or India, or Malaysia, or Singapore.

We had actually higher income per head at that time. Where are we now, and where are those guys? I think the blame should rest squarely, really, on the way we have governed ourselves. And it’s time to bring this issue to the forefront because there is no way, there’s no way, we’re going to move forward. Not any amount of aid is going to move Africa forward.

The only way for us to move forward is really to ensure the good governance, the way we manage our economy, our social life, our legal structures, institutions. That is the basis for development. Anything after that is not sustainable. We cannot rely on people to come and feed our poor. We cannot rely on people to come and treat our sick. This is the responsibility of our governments.

Now, we say it is so important to have governance, and it is a prerequisite for development. But governance in the public sector is not just enough. We cannot have good governance without also having good governance in the private sector. People need to understand that. This is very important.

You take any issue. Start with corruption. Public servants or political leaders don’t corrupt themselves. There’s partners for them in the private sector. And if we have a go at corruption, we really need to deal with corruption in the private sector. There’s no question about that.

The other thing is important for us is the issue of the illicit transfer of funds. Illicit transfer of funds out of Africa at least is double the amount of aid Africa receives every year. So it just speaks for itself.

We need companies, also multinational companies, to pay their taxes. Our problem is that these wonderful, great companies have the best lawyers in the world, have the best accountant in the world, because they can afford to pay whatever to have the best. And small African countries, we have very weak tax collection systems. We don’t have the smart or fantastic lawyers and forensic accountants who can really challenge.

If anybody is any good, they will get a job with the companies anyway. They wouldn’t work for the civil service. And so we have a big problem. And I was so delighted that Britain also discovered it has the same problem.

[LAUGHTER]

Actually, everybody have the same – even the United States have the same problem. So welcome to the club. And it’s interesting. One issue, which we have been screaming about for decades, suddenly came to be in the forefront of the political debate here in this country and many European countries. And we hope, at last, that people in this country, and in the developed countries, are going to move now to stop all this nonsense. It’s not acceptable anymore.

And the challenge we’ll have for the business leaders is the same we’ll have for the political leaders. Where is your leadership? Where is good governance in your institutions? Avoiding tax is not really a wonderful thing. Why didn’t you act in a decent way? That’s a challenge we need to throw at the business community.

And also, I believe that self-regulation is not enough. What we need, also, is some proper regulation at really the international level. And we hope Chinese and Russians will also join in that to enhance the transparency. I’m not against tax havens, or havens, or whatever it is. I realise the need for international trade for people from different countries and different parties to execute contracts in a neutral jurisdiction. Of course, I understand that.

But all we are asking for is transparency. We need to know who are the beneficial owners of all this huge number of companies which are syphoning profits under whatever fantastic rules of accountancy. That’s all what we want. And once you know that, I think the problem is solved. So we’re really seeking transparency, transparency everywhere.

And we need to insist on transparency in the private sector because, believe me, we cannot have good governance in the public sector unless also we have good governance in the private sector. Otherwise, we’ll still end with this massive corruption problem. So these two must really go hand in hand.

End transcript: Video 1: Mo Ibrahim: Governance matters for Africa – and for everybody else!

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Video 1: Mo Ibrahim: Governance matters for Africa – and for everybody else!

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Discussion

Mo Ibrahim emphasises the importance of good governance in Africa. He speaks of the immense resources of Africa and contrasts this with the poverty of people there. He places the blame on poor governance. Development aid is not the answer. Governments have to take responsibility for the way in which the economy, social life, legal structures and institutions are managed and developed. What is not mentioned is the pathway by which the idea of good governance gained such prominence in Africa. This pathway is one whereby granting of aid and investment by EU institutions and the World Bank came with requirements for improved governance.

Video 1 advocates the setting up of good governance systems as the way forward for Africa. But who is to say what good governance is? It is highly contested. Laws and regulations, and social norms protect, but can also perpetuate social injustice and inequality. For instance, there are at least 71 jurisdictions across the globe that criminalise consensual, same-sex sexual activity for lesbian, gay, bisexual and transgender (LGBT) people (Human Dignity Trust 2022).

When thinking in terms of governance in relation to development, questions you can ask include – who decides what to put in place, when and how? Such questions demand a recognition that governments, like all social institutions, are imperfect and do not always work in the best interests of all those governed. Governance is a much broader concept than government and necessitates the involvement of a wide spectrum of actors, social groups, civil society organisations, private companies and regional and international bodies. In turn, the involvement of such a diverse array of actors will inevitably engender conflict. The challenge of governance and its relationship to good development is an enduring and taxing one in global development and leads to a consideration of justice.