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p. 5 of 34 BACK | NEXT Executive Summary Introduction Good governance defined The elements of good governance Accountability Participation Predictability Transparency Interlinkages among the elements of governance The Bank’s concern with governance quality The Bank’s approach to governance issues Promoting the elements of good governance in Bank operations The Bank’s modalities for enhancing governance in DMCs Resource implications Reporting arrangements

Governance: Sound Development Management : The elements of good governance

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Accountability

Accountability is imperative to make public officials answerable for government behavior and responsive to the entity from which they derive their authority. This may be achieved differently in different countries or political structures, depending on the history, cultural milieu, and value systems involved. The mechanisms employed may vary from audit covenants, at one level, to broadly elected legislatures or more narrowly conceived consultative committees, at another.

Accountability also means establishing criteria to measure the performance of public officials, as well as oversight mechanisms to ensure that the standards are met. The litmus test is whether private actors in the economy have procedurally simple and swift recourse for redress of unfair actions or incompetence of the executive authority. Lack of accountability tends in time to reduce the state’s credibility as an economic partner. It undermines the capacity of governments to sustain the long-term business confidence essential for growth-enhancing pri-vate sector investment. Looked at from this angle, accountability can help reduce sovereign risk.

The accountability of public sector institutions is facilitated by evaluation of their economic and financial performance. Economic accountability relates to the effectiveness of policy formulation and implementation, and efficiency in resource use. Financial accountability covers accounting systems for expenditure control, and internal and external audits.

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