Key words in determining the quality of governance are “responsiveness” and “involvement.” Good governance means that stakeholders or beneficiaries feel like they have a voice in what affects them and that their particular interests are recognized. In both the developing and industrialized world, civil society is the most important building block in this process. It is made up of everything from community centers to credit unions to cultural organizations. Governance is the glue that holds a society together.

In prehistoric times, isolated bands of hunters and gatherers had little need for complicated governance. But as people settled in one place and agricultural societies grew in size, legal and political systems grew in response. The more complicated and diverse the society, the greater the need for effective governance: this could range from an all-powerful monarch to a very inclusive, participatory democracy. Of the nearly 200 sovereign nations of the world at the beginning of the 21st century each has some kind of political system.

All the nations of the world have within them components of good and bad governance. Developing countries -- many of them former colonies -- often have inherited a top-down system of government in which politicians and civil servants see no need to be accountable to their constituents. The result is often system-wide corruption from the lowest village headman to head of state. All citizens suffer as a result, but none more than the poor peasant who has the greatest need for services like health care and education.

Ineffective, corrupt governments do little to prevent resource depletion and environmental degradation. Without accountability to their citizens, they often reach economic agreements that offer short-term profits but have a devastating effect on the local environment. There is also little provision for governmental oversight of the activities of corporations and, even if there are laws and rules to protect the environment they are often not enforced. Unfortunately foreign investors sometimes will benefit from such a situation and take advantage of the poor governance of developing countries.

Effective governance rests on a dependable revenue base. Without adequate funds to pay civil servants and maintain basic services, a nation risks collapse. Many countries of the world have never been able to rely on tax revenues to meet their budgetary needs. Citizens simply don’t pay their income taxes or the government may impose taxes and duties that are inequitable and punitive.

Outside the economic sphere, bad governance impacts the quality of life of everyone in a country, from the poorest peasant to the most privileged. Not only are human rights disregarded or enforced inconsistently, but also essential services as well as adequate food and clean water simply don’t reach those at the bottom of the socio-economic ladder. In matters of food and water security, the interests of the political elite are served and the rights of majority often disregarded.

The most devastating consequence of ineffective governmental practices is the likelihood that relatively simple conflicts will turn into major civil wars. Many of the low-intensity wars currently being waged in the world are the result of poor governance. Sometimes disgruntled minorities (or majorities) have no choice but to take up arms; other times weak governments simply lack the capacity to resolve conflicts. A vicious cycle develops in which leaders exploit traditional differences such as tribalism or ethnicity. This may lead to violent conflicts strengthening tyranny and weakening the institution of good government. In situations of weak or ineffective governance, the military is often relied upon to maintain order. Historically, generals exercised undue influence over ineffective rulers and upset the delicate balance between civilian and military power. However, the trend in the last two decades has been towards greater balance between the two.

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