Concept of Governance and Neoliberalism - Coursework Example

ASSIGNMENT 1 Essay Question : Does the term ‘governance’ simply convey an ideological preference for a minimal state and ‘less government’? Discuss with reference to the history of the concept of governance and neoliberalism. GOVERNANCE AND NEO-LIBERALISM This essay deals with the concepts of governance and the challenges faced by it due to the raise of neo-liberalism which is otherwise called as economic liberalism. The theory of governance is more often related to concepts of democracy and neo-liberalism. Here the principles of governance and neo-liberalism are discussed. Governance : The phrase governance is generally used to describe the process of governing and it has a broad sense than the government , says Heywood ( 2000 , pp 19 ). In the past, the theories of governance have been used to explain the changes that occurred in the parliament and in the public sector agencies. Anne Kjaer ( 2004 , pp 11 ) describes governance in three disciplines, namely public administration and policy, international relationships and comparative politics. Thus governance gives a description of not only the government, it also describes intergovernmental and international organisations. Based on these concepts, Kjaer defines governance as ‘the setting, application, and enforcement of the rules’ . Basically governance refers to the co-ordination of the social and economic life. It also defines the operations of government institutions which are both democratic and non democratic. Governance can also operate in the form of hierarchies, markets and policy networks. Hierarchial governance relates to the most traditional form of government. Governance in market relates to the pricing of products and the laws of demand and supply in the market. Finally governance with respect to policy networks gives the relationship between agencies, individuals and officials. Coming to global governance Stephen Krasner (1985, pp 4), gives the idea of regime for global governance. These regimes are ‘principles, norms, rules, and decision-making procedures around which actor expectations converge’. A regime refers to an international governance structure that arises due to a multilateral treaty (a collaboration between three or more nation-states). A few examples of such regimes are the United Nations ( UN ) and the World Trade Organisation ( WTO ). The main difficulty in the regime is that regimes have very limited mechanisms for enforcing the rules. These regimes are not a government but they rely on the power of domestic governments. Cooperation is the guiding principle. Scott ( 2004 , pp 177) says that compliance is achieved by the continuous review of the treaty. Stephanie Lawson (2003: 98) gives the lists of actors and institutions that contribute to governance at the global level which rages from the UN to NGOs. However Oye, K.A. ( 1986 ) says that global governance is a slightly complicated situation as it involves many governments . Also Rosenau, J. ( 2007 ) gives a set of regulations for governing the ungovernable global regimes. The evaluation or assessment of the governance is based on a set of prescriptive or normative criteria of what has to occur and to carry out public policy and public administration. Kajer proposes four core concepts to evaluate a good governance. They are legitimacy efficiency democracy accountability. Legitimacy is essential for any system of governance to gain acceptance and to maintain the authority. Legitimacy can be derived from the citizens who act as the inputs or from the quality of policies followed or from the programs which are the outputs. Authoritative governance achieves legitimacy through output programs and forced control of inputs. The more liberal democratic governance achieves legitimacy from both citizen inputs and effective policy outputs. These democratic governance has good accountability. The current prominent proponent of political and economic efficiency is economic liberalism or neo-liberalism. Generally the governance is a concept of political struggle between democracy and neo-liberalism. Each of these two provide a general standard for good governance. A good governance is both democratic and inclusive as well as efficient with respect to economics and management. Neo-liberalism generally narrows the decision making and political action capability. On the contrary according to Held ( 1996 ) democracy emphasises the public responsibility and inclusiveness and has a wider scope of action and problem solving capabilities. In view of democracy, good governance occurs when greater numbers of citizens, and relevant non-citizens, are involved in decision making and policy implementation. In this aspect the participatory democratic criteria is more optimistic towards good governance. A good governance must also be responsible and accountable. According to John Uhr ( 1999 ) responsibility is the power to initiate an action and accountability is the complementary power to check that action when performance declines. The other important criteria for good governance is the idea of neo-liberalism and the managerial doctrines associated with it , which is discussed in the next section. Neo-liberalism : In the late 20th century and the early 21st century, the most prominent political ideology and the drive for economic globalisation was the concept of neo-liberalism. Neo-liberalism can be seen as a combination of neo – classical economy and the libertarian political philosophy because it prioritises both the free markets and individual liberty. It is based on the economic theories of Adam Smith. According to Adam Smith, the most efficient way of organising the economic life is to safeguard and improve individual liberty, giving respect to private property and appreciate the working of the market. Neo- liberals consider negative liberty as the main political principle. In view of this the accumulation of property by individuals allows more autonomy and individual liberty. The markets are the channels of exchange for property, the role of the government is confined to protecting the free operation of markets. Neoliberalists like Milton Freidman (1962) and Friedrich Hayek (1944) strongly criticise the socialist theories and their practices in which the government intervenes more in the economy and society. According to their ideology, the keyesian economy considered as the big government minimises the capacity for individual involvement and self reliance. Trade unions are considered as monopolies as they raise the prices above the market prices. Thus neoliberals have formulated the classical liberalism into a radical set of rules of global and national economic reforms. The government is forced to remove the barriers for free international trade, reduce the budget deficits of government, change the regulations within the internal market with respect to finance and labour and finally go for the privatisation of the public sector corporations. Neoliberals argue that these changes are essential for the efficient distribution of goods and services. Andrew Gamble ( 2001 ) has pointed that for good governance the government must be strong and there should be reduced direct involvement of the public sector in the society’s economy. The people need not rely on the government as more citizens are self reliant about their own welfare. Thus the duty of the government is reduced to just regulatory role in setting and monitoring the rules in a competitive economy. Neoliberalism is thus committed to minimal state in functioning , but it must be one that is strong enough to implement its policies and laws. Quiggin ( 2005 ) evaluates the record of Australian governments in achieving neo-liberal objectives. The requirement of the Neoliberalism is making the government more efficient and effective. Based upon market principles, the government must advocate different management strategies in delivering it’s services. The government must encourage private sector management principles into the public sector which is known as the New Public Management. Thus the word governance is used to describe the ‘ideological’ preference for ‘downsizing’, or reducing the size of government and administration says Heywood ( 2000 ) . The important consequence is that the services that were previously provided by government are to be undertaken by the private sector or voluntary civil society organisations. In such situations the accountability and democracy are to be taken care of by some methodologies or models. Generally the neo-liberal reforms are strongly opposed but they are justified on the basis of efficiency and effectiveness. Also they have a wider impact on the politics. The neo-liberals give less importance to politics and government, they give more priorities to market principles. The works of March and Olsen ( 1995 ), Ian Marsh ( 2005 ) quote that the influence of neoliberalism in Australian public policy and administration has eroded the democratic governance. Thus the neoliberals usually accept the principles of liberal democratic government and governance to implement their policies. David Harvey ( 2007 ) gives a detailed impact of neoliberal ideas and practices on state, society and economy. The common good is the motive of this neoliberalism and it is achieved by opening the key decisions to more participants which reduces self interest. Conclusion : The above discussion has given a clear idea about the concepts of governance and neoliberalism. It provides the ideological conflict between governance and neoliberalism. The prospects of a good governance has been discussed. With respect to the history and concept of neoliberalism the governance is viewed as downsized or reduced in authority or in essence it means less governance. References : 1. Anne M Kjaer, 2004. Governance. Cambridge: Polity 2. Andrew Gamble, 2001, Neo-liberalism Capital and Class 75 : 127-34. 3. David Harvey, 2007. Neoliberalism as creative destruction. The Annals of the American Academy of Political and Social Science 610 (3) 4. Friedman, M. 1962. Capitalism and Freedom. Chicago: University of Chicago Press. 5. Hayek, F. 1944. The Road to Serfdom. Abingdon: Routledge. 6. Held, D. 1996. Models of Democracy. 2nd edn, Cambridge: Polity. 7. Heywood, A. 2000. Key Concepts in Politics. Basingstoke: Palgrave Macmillan. 8. John Quiggin, 2005. Economic liberalism: Fall, revival and resistance In P. Saunders and J. Walter, eds, Ideas and Influence: . Social Science and Public Policy in Australia. Sydney: UNSW Press, pp. 21 -43. 9. Krasner, S.D. 1985. Structural Conflict: The Third World Against Global Liberalism. Berkeley: University of California Press. 10. Lawson, S. 2003. International Relations. Cambridge: Polity. 11. Marsh, I. 2005. ‘Neo-liberalism and the decline of democratic governance in Australia: A problem of institutional design?’ Political Studies 53: 22-42. 12. March, J.G. and Olsen, J.P. 1995. Democratic Governance. New York: The Free Press. 13. Oye, K.A. 1986. Cooperation Under Anarchy. Princeton: Princeton University Press. 14.Rosenau, J. 2007. Governing the ungovernable: The challenge of a global disaggregation of authority. Regulation and Governance 1:88-97. 15. Scott, S.V. 2004. International Law in World Politics. Boulder: Lynne Rienner. 16. Uhr, J. 1999. Three accountability anxieties: A conclusion to the symposium. Australian Journal of Public Administration 58(1): 98-101. Read More