Document Type : Research Paper

Author

• Mahdi Omidi

Assistant Professor of Sociology, Allameh Tabatabai University, Tehran, Iran.

Abstract

Introduction
Good governance emerged as a dominant agenda in public policy and development discourse during the final decades of the twentieth century. Initially promoted by the World Bank and other international organizations, it emphasized principles such as accountability, transparency, rule of law, institutional effectiveness, and anti-corruption. The concept aimed to provide an institutional framework for sustainable and equitable development. In theoretical literature, good governance is often equated with effective institutions and is assumed to have a reciprocal relationship with economic growth, poverty reduction, and policy effectiveness. However, despite its widespread adoption, the concept has faced significant criticism. These critiques question both its theoretical coherence and its practical applicability across diverse political and social contexts. This study revisits good governance with the benefit of historical distance and accumulated empirical evidence.
Research Question(s) What are the conceptual meanings and implications of good governance as promoted by international organizations, how has this discourse evolved over the past three decades, and what have been its practical outcomes, strengths, and limitations in the fields of public policy and development?
 
Literature Review
The literature on good governance largely originates from international financial institutions, particularly the World Bank, the IMF, and the United Nations. These organizations associate governance quality with institutional capacity, market efficiency, and effective public management. Empirical studies often report positive correlations between governance indicators and economic growth, income levels, and poverty reduction. At the same time, critical scholarship challenges these findings by questioning causality, measurement validity, and contextual neutrality. Comparative studies highlight cases where growth occurred in the absence of good governance indicators, and others where strong governance scores failed to deliver development outcomes. The literature thus reveals a deep divide between supportive and critical perspectives. This review situates good governance within these competing theoretical traditions.
Methodology
This study adopts a critical review methodology based on qualitative analysis of key international policy documents and foundational academic literature on governance and development.
Results
The findings indicate that good governance functioned both as a theoretical construct and as an operational policy agenda, shaping development interventions globally throughout the 1990s and early 2000s. International organizations framed governance primarily as a set of institutional qualities—such as regulatory effectiveness, control of corruption, and rule of law—designed to reduce transaction costs and enhance market performance. Empirical studies supporting this agenda reported positive relationships between governance indicators and economic growth, foreign direct investment, and public sector efficiency. These findings played a major role in legitimizing governance-based conditionality in development assistance.
However, closer examination reveals substantial limitations. First, the causal direction between governance and development remains contested. While some studies suggest that better governance leads to growth, others demonstrate reverse or bidirectional causality, or argue that a minimum level of economic development is a prerequisite for governance reforms. Second, the universality of governance prescriptions proved problematic. Countries with diverse historical trajectories, political regimes, and institutional legacies were subjected to standardized reform packages, often with limited success. Third, the operationalization of good governance resulted in excessively broad and ambitious reform agendas that exceeded the administrative and political capacities of many developing states.
The findings also show that governance reforms were frequently implemented in highly constrained environments characterized by weak institutions, limited resources, low legitimacy, and fragmented societies. In such contexts, governance indicators often became aspirational goals rather than achievable benchmarks. Moreover, international organizations tended to prioritize formal institutional reforms and “best practices,” leading to isomorphic mimicry rather than genuine capacity building. As a result, many governance reforms failed to deliver their intended outcomes, despite extensive policy adoption. Overall, the evidence suggests that while good governance contributed to re-centering the state in development discourse, it struggled to translate theoretical ideals into context-sensitive and effective practice.
Discussion
The discussion highlights a fundamental tension within the good governance agenda between normative ambition and practical feasibility. While the concept successfully reintroduced the importance of institutions and the state, it underestimated the political and historical conditions necessary for reform. Governance was often treated as a technical issue rather than a deeply political process. This depoliticization limited the effectiveness of reforms and obscured power relations embedded in institutional change. Furthermore, the expansion of governance objectives diluted priorities and overwhelmed implementation capacities. These shortcomings explain the gradual decline of good governance as a dominant development paradigm.
 
Conclusion
The good governance agenda possessed several important strengths that initially contributed to its prominence in development and public policy discourse. Most notably, it re-centered the state after decades of market-oriented approaches that had marginalized public authority. At the same time, it moved beyond a state-centric perspective by emphasizing the interconnected roles of the market and civil society, thereby promoting more participatory forms of policymaking. Network-based interpretations of governance further enriched this perspective by conceptualizing the state as an open and interactive system, dependent on continuous engagement with social, political, and economic actors.
Nevertheless, these strengths were gradually overshadowed by fundamental weaknesses. Chief among them was the excessive expansion of the good governance agenda, which transformed it into a comprehensive and highly ambitious reform package that exceeded the administrative, political, and institutional capacities of many developing countries. Although enhancing state capacity was one of the declared objectives of good governance, the successful implementation of this agenda itself presupposed the existence of capacities that were largely absent. As a result, goals and means were conflated, and governance reforms became trapped in a self-reinforcing cycle of unmet expectations and expanding prescriptions.
Furthermore, international organizations largely equated governance reform with institution building based on “best practices,” often neglecting political stability, historical context, and social conditions. This led to isomorphic imitation rather than genuine capacity development. Ultimately, the central weakness of good governance lies in its insufficient attention to the actual capacities of implementing states, underscoring the need for context-sensitive and politically informed approaches to governance reform.
Acknowledgments
The author declares no conflict of interest.

Keywords

• Good governance
• Public policy
• Institutional capacity
• State capacity
• Development policy
• International organizations

Main Subjects

• The State