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Linking Growth and Governance for Inclusive Development and Effective International Cooperation

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Linking Growth and Governance for Inclusive Development and Effective International Cooperation Linking Growth and Governance for Inclusive Development and Effective International Cooperation By: James Michel February 2014 LINKING GROWTH AND GOVERNANCE FOR INCLUSIVE DELEVOPMENT AND EFFECTIVE INTERNATIONAL COOPERATION. James Michel, a former U.S. Ambassador to Guatemala, is a consultant in international development cooperation, specializing in support for good governance and the rule of law. CONTENTS 02 Letter from M. Charito Kruvant 03 Introduction 04 What is Development? The Nature of the Development Process History and Theories of Development 06 Intertwined Imperatives: Inclusive Growth and Good Governance Growth Strategies Governance Strategies The Intertwining of Growth Strategies and Governance Stategies 22 The Contribution of Internatioanl Cooperation The International Framework Noteworthy Trends in Development Cooperation The National Framework The Way Forward 35 Conclusions 37 Bibliography 40 Endnotes This manuscript is produced by Creative Associates International in Washington, D.C. Contents are copyright of Creative Associates International. © 2014 LETTER FROM OUR PRESIDENT Creative has a long track record of working in city the planning processes. And a higher level of trust was and community planning, and promoting responsive developed between communities and the government. civic governance. Our experience tells us that community-driven In 1979, we supported city and community approaches are critical to achieving sustainability. electrification and public services in Bolivia, and Creative excels in city and urban governance, improving implemented a post-war public services and public services delivery, and community-driven reconstruction project in Guatemala. We facilitated cities development. and communities to identify their needs and to prioritize This paper from U.S. Ambassador James Michel is and stage the interventions required to re-establish part of a series that promotes thought leadership and their economic, political, and social fabrics, essentially sharing of knowledge in economic stabilization and rebuilding confidence in local and national government. growth. Today, our talented teams manage projects The series will include articles by leading figures such as the Community Livelihoods Project in Yemen in their fields as well as experts from among our staff; and the Community Cohesion Project in Afghanistan— examples are always drawn from project experience. two of the world’s largest city and community We hope sharing this information and the more relevant stabilization programs. policy and program research with the development An evaluation of Creative’s implementation of community will improve dialogue and knowledge the Community Based Stabilization Grants (CBSG) sharing in economic growth, ultimately helping Program in Afghanistan showed that citizens became communities to achieve the positive change they seek. more confident in their local government’s ability to I hope you enjoy Ambassador Michel’s paper and serve their needs. They became more connected to continue to follow our thought leadership series. the government because they gained awareness of Peace, M. Charito Kruvant President & CEO Creative Associates International TRENDS in GLOBAL DEVELOPMENT Creative Associates International 02 “EXPANSION OF FREEDOM IS VIEWED . as both the primary end and the principal means of development. Development consists of the removal of various types of unfreedoms that leave people with little choice and little opportunity.” ~ Amartya Sen, Development as Freedom INTRODUCTION Economic growth has long been the central focus human condition. These relationships are complex and of the study of development. What we now regard they have important consequences. Human security, as a multidimensional economic, social, and political well-being, and dignity everywhere depend on inclusive concept was once commonly referred to as “economic economic growth and good governance. development” and its study was dominated by This paper reviews a cross section of academic economists and economic historians. thought and practical experience in addressing the As the study of development continued in the latter related challenges of growth and governance. It is decades of the 20th century, the multiple and intimate intended to stimulate thinking about international connections of economic growth to social and political cooperation’s potential to add value to developing aspects of development came increasingly to the fore. countries’ efforts to achieve stability, prosperity, and Development studies began to pay attention to the justice. It explores the nature of development, describes connections among a continuously expanding array of broad policies that have been found to be conducive to relevant topics. progress toward the intertwined imperatives of inclusive Prominent among them were the development growth and good governance, and reviews the current aspects of citizen security, conflict, corruption, environment for international cooperation. demographic trends, education, the environment and A principal theme in the following discussion is the natural resources, geography, health, human rights, importance of pragmatic strategies that are based on justice, political and economic institutions, and the the realities of each country and that draw on local breadth and quality of participation in political and institutions, knowledge, and leadership for the design economic activity. The focus of development studies and implementation of specific policies and actions. has become human development. The paper identifies tools to facilitate locally-led Economic growth remains a central theme. It is efforts to identify and respond to constraints and essential to all other aspects of development, such as opportunities. It examines promising approaches for those enumerated above. But economic growth takes achieving sustainable results in a manner appropriate place – or fails to take place – in the political context of to the local context. And it offers recommendations governance: how societies organize themselves, how on how international experience and resources can their leaders determine policy, how their institutions contribute to developing countries’ capabilities to perform, and how their people behave. achieve and sustain inclusive growth and effective The relationships between growth and governance governance, and thereby advance human development. in each society provide a distinctive background against which efforts are pursued to improve the TRENDS in GLOBAL DEVELOPMENT 03 Creative Associates International WHAT IS DEVELOPMENT? THE NATURE OF THE DEVELOPMENT PROCESS to knowledge, better nutrition and health services, more There is general agreement that development is a secure livelihoods, security against crime and physical complex and continuing long-term process by which violence, satisfying leisure hours, political and cultural societies become – and remain – stable, just, and freedoms and sense of participation in community prosperous, and people participate in and benefit activities. The objective of development is to create an from increased freedom, security, and rising standards enabling environment for people to enjoy long, healthy of living. and creative lives.” 2 This formulation describes development by referring Sen and Haq combined their straightforward to widely-shared societal goals (to be stable, just, and definitions of development (“freedom” and “enlarged prosperous) and an improved quality of life for societies choices”) with indications of its multidimensional nature, that achieve those goals. involving a number of economic, social, and political Amartya Sen has expressed a broad view of factors in a highly diverse array of local contexts. development with elegant simplicity in his notion of Among these factors, frequently cited elements “development as freedom.” Sen suggests that five include sound economic policy frameworks, social distinct types of freedom are the primary ends as well as investments, and broad participation in economic and the principal means of development: political freedoms, political life with reduced social inequalities. They also economic facilities, social opportunities, transparency include good governance characterized by competent guarantees, and protective security. He acknowledges public management, democratic accountability, the complexity of the development process, observing protection of human rights, and respect for the rule of that the “exercise of freedom is mediated by values, but law; sustainable environmental practices; and attention the values in turn are influenced by public discussion to the root causes of conflict and violence.3 and social interactions, which are themselves influenced The contemporary people-centered idea of by participatory freedoms.”1 development has evolved from a long history of Mahbub ul Haq, founder of the Human Development international interest in expanding stability, justice, Report, also captured the simplicity of the development and prosperity. That history has included a growing concept along with its underlying complexity: realization that development means far more than “The basic purpose of development is to enlarge economic growth, which in turn has given rise to a people’s choices. In principle, these choices can continuing debate about what national and international be infinite and can change over time. People often policies and actions will be most conducive to sustained value achievements that do not show up
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