Governance and the External Factor

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Abstract
The design and functioning of governmental systems is currently much debated. Aid agencies are increasingly preoccupied by how governance influences the effectiveness of aid and promotes economic growth. Nondemocratic governments are coming under increasing pressure to reform. A corollary to this view is a widespread conviction that centrally controlled economies are inefficient and that liberal market policies offer better prospects for rapid growth. This paper provides a framework for analyzing these issues. It attempts to define the core characteristics of good governance that enjoy wide acceptance internationally and examines how such characteristics may be legitimately and effectively fostered in developing countries by external agencies.

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