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p. 3 of 13 BACK | NEXT I. Introduction II. ADB's Governance Policy III. Implementation of ADB's Governance Policy A. ADB's Governance Activities B. Assessing the Impact on the Four Elements of Good Governance C. Addressing Governance Issues-ADB's Instruments D. Developing ADB's Capacity to Address Governance Issues IV. Lessons Learned V. Medium-Term Governance Agenda and Action Plan 2000-2004 VI. Conclusions and Recommendations

Promoting Good Governance: ADB's Medium-Term Agenda and Action Plan (2000)

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III. Implementation of ADB's Governance Policy

11. When the governance policy was approved, a concern of DMCs was that implementation should focus on development management and not become the basis for interference in a member country's political affairs. Sensitive to this concern, ADB's operations in governance focused on dialogue with the DMCs to identify governance areas most suitable for its interventions. In addition, activities were initiated to increase understanding of governance issues and to forge a broad constituency for good governance in the Asian and Pacific Region.

12. Approval of the policy also necessitated changes within ADB. Instructions were issued for staff to systematically identify, in consultation with the DMC concerned, opportunities to promote better governance in individual operations and procedures. Line departments were assigned this responsibility. These departments were already supporting capacity building and institutional development in many key areas, and broadening their role to include other aspects of governance was a natural extension. However, an internal force was needed to push governance initiatives, and in early 1997 the Resource Group on Governance was formed in the then Strategy and Policy Office. In 1998, governance specialists were placed in the programs departments, and in 1999 the Anticorruption Unit was established as part of the Office of the General Auditor (OGA). Thus, mainstreaming of the governance policy gathered momentum; governance activities now constitute a growing component of ADB operations.

13. In retrospect, this incremental approach was appropriate, given the complexity of the issues, the state of knowledge at the time on the direct relationship between good governance and effective government, and DMCs' own pronounced views on the importance of governance. The approach allowed issues of governance to enter in the dialogue between the government officials and ADB staff, without threatening the quality of ADB's historical relationship with the DMCs, which has always been based on long-term mutual trust. A key event in the DMCs' realization of the importance of governance was the Asian crisis. It, together with vigorous efforts of the international financial institutions, including ADB and other development agencies, produced widespread recognition of the importance of good governance. Good governance's links with sustained economic and social development are now broadly understood and more generally accepted. The quality of governance is today the subject of a healthy debate in many DMCs. Consequently, ADB can now pursue a broader and more vigorous governance agenda in the region (Chapter V).

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