Best kept secret
Over the weeks a number of persons have expressed appreciation for the fact that I have taken the IFIs and the international community to task in regard to their roles in contributing to poor governance in Guyana. On the other hand, colleagues in this community claim that they do not have the authority to do more than they are at present. However, as I remarked in this column on May 18 my insistence on addressing their contribution to bad governance is deliberate. After all, it is the international community that has set the standard, which says that “good governance is a necessary condition for sustained economic growth and development,” having identified “corruption as the single greatest obstacle to economic development.” Their responsibility to promote economic development requires that they adopt an uncompromising stance in their public and private opposition to all signs of poor governance that fall within the ambit of their financial or technical support. To repeat, failure to do this is: “tantamount to giving private behind-the-scenes en-couragement for corrupt behaviour.”

In taking this position my expectation is that, given the constituencies these international bodies serve, they can be pressed to respond to expressed public concern over practising double standards in relation to governance. There is the further consideration that if these institutions do not adopt an uncompromising stance on these matters, some of their own personnel are likely to be comprised. Consider for example that one of the best kept secrets about Guyana is that, with its small population, on a per person basis, it has had more foreign diplomatic staff and personnel of international agencies caught involved in irregular practices, public scandals or corrupt activities, than perhaps anywhere else in the world. Thus, we have had high profile scandals associated with staff in the visa/passport sections of some of the most prominent diplomatic entities including the United States Embassy. This does not refer to public challenges to the rectitude of IFIs like the IADB.

Pattern and causality

In considering the relationship between governance, growth and development, questions regarding the pattern and level of causation in the relationship arise. There appears to be no particular pattern, whether linear or cyclical in Guyana. However, experience over the past 18 months indicates that there are periods of such rapid deterioration that the process I am analysing becomes quite noticeable, giving the appearance that the matters under discussion are of recent origin. Clearly, however, the roots of the present crisis go deeper and further back in time.

Virtuous and vicious circles
Cross-country studies worldwide suggest that there is a circular relation or as the literature puts it a circular causality in the relation between governance, development and the improved well-being of the mass of the population. Thus, it would appear that good governance enhances political and social stability, reduces organised crime and lawlessness, and thereby improves the environment for economic activities. Since these activities include investment in farms, factories, buildings and equipment as well as knowledge, health, skills and citizenship, the latter build human and social capital, thereby increasing incomes, reducing poverty, and widening opportunities and choices for citizens. In turn, these same attributes enhance the prospects for good governance, thereby creating a virtuous circle.

A vicious circle has the opposite effects. In this instance, poor governance impedes growth and development, stagnates the growth of income and wealth, fosters the breakdown of law and order, undermines national security and creates opportunities for organised crime to prosper. In turn, all these negative effects lead to bad governance.

This circular self-reinforcing feature of the relationship is important. Countries such as Guyana can find themselves trapped in a vicious circle from which it is difficult for the country on its own to disentangle its people and institutions. Not surprisingly these matters have been the subjects of a rapidly growing number of empirical studies.