Governance

->Governance refers to "all processes of governing, whether undertaken by a government, market or network, whether over a family, tribe, formal or informal organization or territory and whether through laws, norms, power or language." It relates to processes and decisions that seek to define actions, grant power and verify performance.

->In general terms, governance occurs in three broad ways:
..Through networks involving public-private partnerships (PPP) or with the collaboration of community organisations;
..Through the use of market mechanisms whereby market principles of competition serve to allocate resources while operating under government regulation;
..Through top-down methods that primarily involve governments and the state bureaucracy.

->To distinguish the term governance from government: "governance" is the concrete activity that reproduces a formal or informal organization. If the organization is a formal one, governance is primarily about what the relevant "governing body" does. If the organization is an informal one, such as a market, governance is primarily about the rules and norms that guide the relevant activity. Whether the organization is a geo-political entity (nation-state), a corporate entity (business entity), a socio-political entity (chiefdom, tribe, family, etc.), or an informal one, its governance is the way the rules and actions are produced, sustained, and regulated.

->Governance is a very general concept that can refer to all manner of organizations. Equally, this generality means that governance is often defined more narrowly to refer to a particular 'level' of governance associated with a type of organization (including public governance, global governance, non-profit governance, corporate governance, and project governance), a particular 'field' of governance associated with a type of activity or outcome (including environmental governance, internet governance, and information technology governance), or a particular 'model' of governance, often derived as an empirical or normative theory (including regulatory governance, participatory governance, multilevel governance, metagovernance, and collaborative governance). Governance can be used not only to describe these diverse topics but also to define normative or practical agendas for them. Normative concepts of fair governance or good governance are common among public, voluntary, and private sector organizations.

->In its most abstract sense, governance is a theoretical concept referring to the actions and processes by which stable practices and organizations arise and persist. These actions and processes may operate in formal and informal organizations of any size; and they may function for any purpose, good or evil, for profit or not. Conceiving of governance in this way, one can apply the concept to states, to corporations, to non-profits, to NGOs, to partnerships and other associations, to project teams, and to any number of humans engaged in some purposeful activity.

->Most theories of governance as process arose out of neoclassical economics. These theories build deductive models, based on the assumptions of modern economics, to show how rational actors may come to establish and sustain formal organizations, including firms and states, and informal organizations, such as networks and practices for governing the commons. Many of these theories draw on transaction cost economics

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Governance as a normative concept

->Fair governance

->When discussing governance in particular organisations, the quality of governance within the organisation is often compared to a standard of good governance. In the case of a business or of a non-profit organization, for example, good governance relates to consistent management, cohesive policies, guidance, processes and decision-rights for a given area of responsibility, and proper oversight and accountability.

->A fair governance implies that mechanisms function in a way that allows the executives (the "agents") to respect the rights and interests of the stakeholders (the "principals"), in a spirit of democracy.

->Good governance

->Good governance is an indeterminate term used in international development literature to describe various normative accounts of how public institutions ought to conduct public affairs and manage public resources. These normative accounts are often justified on the grounds that they are thought to be conducive to economic ends, such as the eradication of poverty and successful economic development. Unsurprisingly different organizations have defined governance and good governance differently to promote different normative ends.

->The World Bank defines governance as: the manner in which power is exercised in the management of a country's economic and social resources for development.

->The Worldwide Governance Indicators project of the World Bank defines governance as: the traditions and institutions by which authority in a country is exercised. This considers the process by which governments are selected, monitored and replaced; the capacity of the government to effectively formulate and implement sound policies and the respect of citizens and the state of the institutions that govern economic and social interactions among them.

->An alternate definition sees governance as: the use of institutions, structures of authority and even collaboration to allocate resources and coordinate or control activity in society or the economy.

->According to the United Nations Development Programme's Regional Project on Local Governance for Latin America: Governance has been defined as the rules of the political system to solve conflicts between actors and adopt decision (legality). It has also been used to describe the "proper functioning of institutions and their acceptance by the public" (legitimacy). And it has been used to invoke the efficacy of government and the achievement of consensus by democratic means (participation).

->According to the Governance Analytical Framework (GAF), governance can be defined in broader terms. It refers to the "processes of interactions and decision-making among the actors involved in a collective problem, that lead to the creation, reinforcement or reproduction of social norms and institutions". Governance processes are found in any society, and they can be analyzed from a non-normative perspective, the GAF.

->The proposed method is based on five analytical tools: problems, actors, social norms, processes and nodal points. The GAF was developed in the context of the research programme NCCR North-South, and on the basis of a critique of existing approaches to governance.