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"Even if the empirical evidence is not fully conclusive, we can all agree that development objectives cannot be achieved and sustained in the presence of weak institutions and poor governance systems, since the strength of the governance system of a country determines the impact and effect of its policies." Can we really all agree with this causality? Is it not equally plausible that the root cause of "bad" governance is a lack of funding, most distinctly, a lack of legitimacy, democratic or autocratic, with which to tax economic activity and citizens? For instance, recent research by the French ministry of Economy, Finance, and Industry (1), suggests that while ‘good governance’ is an important element of healthy developed states, it is not an efficient development strategy on its own. The researchers found a correlation between good governance and GDP/ capita, but not with growth rates. This findings strongly questions the implied causal relationship mentioned in this blog post. In the western experience, "good" governance did not precede development, but governance has improved gradually to become more transparent and accountable as state financial capacity has grown AND as citizens have become wealthier, more educated, and consequently more able to demand good governance in return for their continued compliance in being taxed. In our contemporary world too, China is developing at a great speed in spite of deep governance problems. Not until now, when they are no longer a low income country but an emerging super power, does the CCP seem to take reforming their governance seriously. "Good" governance is not a pre-requisite for development: development is a pre-requisite for good governance! 1: