Catalog

	Table of Contents
p. 27 of 34 BACK | NEXT Executive Summary Introduction Good governance defined The elements of good governance The Bank’s concern with governance quality The Bank’s approach to governance issues Promoting the elements of good governance in Bank operations Building governance capacity Participatory development processes Participation of beneficiaries and affected groups Public sector/private sector interface Decentralization of public and service delivery functions Cooperation with NGOs Legal frameworks Information openness The Bank’s modalities for enhancing governance in DMCs Resource implications Reporting arrangements

Governance: Sound Development Management : Promoting the elements of good governance in Bank operations : Participatory development processes

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Public sector/private sector interface

The manner in which the public and private sectors function together in an economy is one test of the effectiveness of the participation principle. From the point of view of economic growth and development, this interface can work at two levels. First, market-friendly economic reforms (i.e., a conducive environment for private enterprise) help release the energies and dynamism of the private sector and enable it to contribute more fully to the development process (thus, making it more broad-based and participatory). Second, consultative mechanisms for dialogue between government and private actors (e.g., business councils) can give the latter opportunities to provide effective input into the policy process. Such business councils can be valuable to the government as well. By including the relevant parties in the discussion, they increase the government’s capacity to achieve consensus on policy initiatives. Other advantages include enhanced credibility of the government’s commitment to growth, and increased safeguards against corruption.²⁵ A notable feature of the successful economies of East Asia is that most developed effective government-business deliberation councils, fostering rule-bound decision making by government, and rendering it harder for government to renege on agreements made. Their example suggests that, designed properly, consultative mechanisms can increase not only participation and accountability, but also transparency and predictability in policy formulation and implementation.

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