What Is Governance? And How Does It Impact Our Lives?

by Byron Miller 

What is governance?  It’s not as easy a question to answer as we might think.  Most of us, when we think of governance, think of government.  We think of “the state” and the ways in which particular governments, elected by citizens, control the activities of the state.  Our elected “governments” play a crucial role in the governance of our daily lives through the programs they enact and the laws they pass.  But, thinking more broadly, governance means more than just the programs and laws of governments.  Governance can refer to any sort of action taken by any sort of organization or group of individuals—for example, civic organizations, corporations, NGOs, and even markets—to coordinate and control how we act in our highly complex society.   Governance is about establishing the “rules of the game” for how we live and interact.

Almost everyone would agree we need governance.  We need a sense of safety and security; we need some basis for predictability.  The absence of institutions of governance would be anarchy—or more accurately, chaos.  Interestingly, even anarchists develop institutions of governance, albeit entirely from the bottom up.

So how can we evaluate the quality of our institutions of governance?  That’s a really tough question.  For one thing, if we are really going to take governance seriously, we can’t equate governance with government.  Many institutions, both state and non-state, are involved in the governance of our daily lives.  In fact, a crucial aspect of the governance of our lives is the extent to which governance functions are allocated to democratic state institutions versus undemocratic institutions, such as markets.  In the former, a critical question is “how democratic and just are these state institutions?”  In the latter, a critical question is “how efficient and productive are these non-state institutions?”  Of course, we can also ask questions about the efficiency and productivity of state institutions, and the representativeness and justness of non-state institutions, but these are not the first things we expect from these institutions.

The first question of governance is not how well the governing institutions work, but which institutions have been selected to perform governance functions.  Which functions are assigned to which institutions can have huge implications for social justice and social equity.  To take one well-known example, Canada had a very well functioning social housing program, operated by the federal government, until 1993.  In 1993 the federal government ceased all new social housing construction, and in 1996 it got out of social housing provision altogether, downloading that responsibility to the provinces, which in turn downloaded it to municipalities which lacked the capacity to maintain significant social housing programs.  In effect, the governance of affordable housing provision was transferred from state institutions to market institutions.  (This is the essence of neoliberalism.)  But because markets respond to “effective demand” and not need, the supply of affordable housing, relative to need, declined dramatically and Canada developed a significant homelessness problem.  It’s not that the market institutions worked poorly.  On the contrary, they worked well, according to market criteria.  But the criteria of markets—which centre on profit maximization—are very different from the criteria of states, which may adopt a variety of other democratically-determined criteria such as meeting social needs, ensuring social equity, etc.  The broader point is that changing the institutional mechanisms by which the provision of affordable housing is governed has had huge implications.

The second question of governance is how well the institutions of governance work, given the institutions of governance that have been selected (for the time being).  This may seem like a more straightforward  question, but it’s not.  If we are concerned about how democratic our institutions of governance are, for example, we have to ask ourselves what we think the central characteristics of  a well-functioning democracy are.  Are we concerned with voter turnout in elections?  Are we concerned with the ability of citizens to participate in the day-to-day decisions of government?  Are we concerned about the influence of powerful special interest groups?  Are we concerned about the transparency of government decision-making?  And for each of these and many other concerns, what are the best ways to measure performance?  Are the data we need even available?

None of these are easy questions and the measurement of good governance is as much value-laden as it is data-driven.  But if we are concerned with good governance we must attempt to define what we consider central to good governance, and what sort of proxy measures we might look to.  Only after we do this can we raise serious demands for better governance.

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