Good Governance as our Goal: Because it Matters

Good governance is important for every country, however when the issue of developing countries emerges it becomes the most important factor.

kosovo-good-governancePeople, tend to be rather predictable. Every behavior is triggered by an underlying motive, voting is no different.

Citizens vote because they expect to gain effective governance as that is the key to their prosperity. The last elections in Kosovo raise two important matters. First is the matter of the majority which does not vote.

Two possible explanations come to mind: they do not expect to gain anything, as they are fine or based on their previous experience they have learned that voting gets them nothing. Secondly, and most importantly, did our vote get us an effective government?

The economy in Kosovo needs to improve fast. Kosovo is a small country with little, and this is an overstatement, political and economic power. Despite this Kosovars are taught to believe that Kosovo is bountiful in terms of resources. Just because one does not realize the truth, it does not mean that it does not exist. It just means one is failing in perceiving the trough.

The naked truth is that we are rather poor, among the poorest countries in the world. We live in a place where hard and honest work counts for nothing, we live in a place where parents cannot manage to save the life of their child because they do not have the financial resources to pay for their treatment. Every Kosovar that went on a tourist trip in Europe realized the bitter trough: we, as Kosovars, cannot afford the European Union with our 300 Euro salaries we cannot afford a single cup of coffee in the EU countries.

Our main goal should be improving the economy, but we are the ones who should embark in this journey. The political leaders in Kosovo have grown accustomed to elaborately explaining what we have to do in order to get our salvation within the EU. In manipulating the public they are failing to address the main pressing issue of our society which is our economy.

Secondly, they are conscientiously refraining from explaining to the people that the integration process for Kosovo will last for a long time. The process is designed in a way that we have to turn into a well oiled machine before we join the union. We have to fight poverty and crime and after we have succeeded we may be welcomed in the EU. It is not the other way around.

Economic growth is undeniably conditional upon good governance for the following reasons. First, allocation of public resources for the good of the people will not yield any results if the institutions which are in charge of drafting and executing these resources are ineffective, for one reason or another.

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Second, improved governance leads to better development outcomes. Over the years studies have shown that government initiatives and growth plans will only be effective if the institutions are well governed. Studies that conducted cross-sectional analysis of developing countries found out that countries which suffer from poor governance experience 2.3 percentage points less GDP growth per year, compared to developed countries. Additionally the findings of these studies suggest that good governance has a positive and significant impact on growth.

Third, effective governing institutions tend to invest wisely, specifically in education and health, as opposed to ineffective governments which tend to focus on housing and physical capital. In an economic reasoning the first types of investments are specifically what do not bring any profit and that have no multiplier effect in the economy.

Fourth, studies also show that investors and donors have the tendency to look at a country’s governance affectivity and stability before they make a decision to invest in that country or decide on a disbursement of development assistance. Good governance is important for every country, however when the issue of developing countries emerges it becomes the most important factor.

Source: World Bank

Source: World Bank

In the case of Kosovo, a publication of the World Bank shows that the evaluation of governance yielded negative results. Good governance is measured with the six indicators above and results rage from -2.5, being the lowest and 2.5 being the highest. The chart above shows that governance in Kosovo in the years between 2004 and 2012 has continuously received negative ratings.

The only exceptions were the years 2008 and 2009 where political stability receives positive ratings. It was a short-lived glory as it fell drastically in the following years. The rest of the indicators have had few minimal value fluctuations but what has to be understood in this case is that governance in Kosovo is characterized by negative values.

To put these results in understandable terms: Kosovo does not enjoy good governance, our economy as a result will not be improving and what is more we will suffer the bad decisions made from the “bad governance” between 2004-2012 in the years come.

Every bad economic decision our past governments made will all cost us triple in money, resources and time. It will not matter how much assistance and funds we receive from abroad as long our governance remains in the negative values.

People vote mainly for two reasons, they either want a change or they want to wholeheartedly support a government which had their benefit in mind. The past elections were our chance to make a historic change. Did we use this chance?

Time will tell.

Arif Shala is a a doctoral student at the Ludwig Maximilians University in Munich, Germany and executive director at the Institute for Economic Development Studies in Prishtine, Kosovo.