Governance and Poverty Reduction: Paths of Connection

Abstract

Good governance is crucial to address poverty reduction and strengthening the link demands a balance between state e fficiency and accountability. Economic growth, aid efficiency and linking governance with human development will contribute significantly to poverty reduction. This will involve taking account of formal institutions and their underlying power relationships. External actors who promote governance as a means to reduce poverty should be aware of how their actions can affect the political capacities of the poor. They also need to employ a case by case analysis to avoid a normative and formalistic approach. “Good governance ” appears to be the missing link in the road to development and poverty eradication. Furt h e rm o re, promoting good governance is part of the deal developing countries have undertaken in the framework of the “global p a rtnership for development ” enshrined in the Millennium Declaration and ratified at the Monterey Financing for Development Summit.2 C u rre n t l y, the relationship between governance and poverty reduction is practically taken as given. It is so deeply rooted in the discourse of multilateral institutions, bilateral donors and even non-governmental org a n i s a t i o n s (NGOs) that we need to scrutinise it carefully in order to identify

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