Suchergebnisse

This note looks at the dilemmas faced in the application of
conditions on governance by the international financial institutions
(IFI) in the course of their lending operations in member states.
Governance relates to the activities of governments and other public
sector entities in the exercise of their financial and regulatory
functions and that bear directly on the proper use of funds provided by
the IFI. Given the extensive range of state action, conditions relating
to governance can apply to diverse areas, including the allocation of
public expenditures and the collection of taxes, the rules affecting
procurement of goods and services by public authorities, the
effectiveness of the judicial system in enforcing contracts and the
arbitration of claims and obligations between governments and all the
social entities they deal with.

Major problems of developing countries are unequal income
distribution and low growth rate, which affect their welfare aspects. It
was implicitly assumed that whenever we achieve target of higher growth
rate, benefit of growth would automatically trickle down to the poor.
History of developing countries shows that the rich benefited more than
the poor as evidenced by rising income inequality during the period of
higher economic growth. The economic policy changes are often triggered
by the logic of low level of equilibrium of output level, employment and
income distribution. To overcome this low level of equilibrium trap,
government often adopt polices so as to achieve high level of income and
employment growth and development, and equitable income distribution.
Coherent policy instruments are essential to meet these policy targets.
Impact of any macro economic policy has been examined by studying its
impact on economic growth and income distribution. In recent years
polices have been directed toward reducing the level of poverty and
inequality through raising quality of life in society by providing
efficient and effective governance. This new economic philosophy has
resulted in a massive change in the policy orientation of countries; the
priority is now centred on issue of governance and focus is now shifted
towards a qualitative nature of its growth and development. According to
Sen (1983), the realisation of human capabilities, that enlarge the
range of human choices, is essential for a broader notion and measure of
economic well-being. The institutional frame work is then considered as
one of the essential elements for translating growth and well-being into
a sustainable process.