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This is the World Bank's blog on governance and anti-corruption. It aims at providing a space for debate and knowledge sharing on this critical field of development. | Learn more...

Macroeconomics and Economic Growth

Did the financial crisis kill the governance reform agenda?

Submitted by Alfredo on Wed, 2009-05-27 09:36

A few days ago, Dani Rodrik opened an interesting discussion with his post "How the financial crisis has killed the governance reform agenda."  Basically what he says is that "we need to downplay the role of improved governance as a causal mechanism for economic growth." 

His main argument is that the financial crisis in the US did not only undercovered issues of capture and corruption in this country -as Simon Johnson and Dani Kaufmann have argued- but also showed that it is possible to be corrupt and rich at the same time.  Based on this evidence and on his previous belief that the causal relation between governance and growth was never proofed to be strog, he concluded that even though governance reform is a good thing to do, it should not be confused for a growth strategy.

Don't rush to dismiss governance, it'll come back to haunt you

Submitted by Edouard on Wed, 2008-07-09 17:52

Noted Le Monde economic journalist Eric Le Boucher recently wrote that the sustained growth over several decades of East Asian economies with poor democratic governance, such as China, signals the demise of the values of democracy and humanism that the West inherited from Classical Greece and developed and advocated for the next 25 centuries. The worry is that the countries growing without democratic governance were championing a development model (he called it the “Chinese model”) that does away with democracy and good governance (the “Greek heritage model”).  His article, provocatively titled “the decline of white man”, takes a number of debatable shortcuts to make this point.