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The concept of good governance has typically been used in development economics as a way to describe the system of aid-recipient countries – developing economies.
Good governance, in the private and public sphere, is the ability to exercise power, and to make good decisions over time, across a spectrum of economic, social, environmental and other areas.
There are many ways to define good governance, however, there seems to be a general consensus that key factors, as outlined by the OECD programme on Public Management and Governance (PUMA) include: Technical and managerial competence of leadership is an obvious factor of good governance.
In this financial crisis, it is hard not to question the competence of the regulatory bodies responsible for overseeing the financial institutions, and the competence of the financial institutions themselves.
It became obvious that neither public sector leadership nor private sector leadership really understood the complex financial instruments that were structured, packaged and sold during the boom years. Only after the crisis had begun unfolding did the New York Times publish an account of the brief meeting between Security and Exchange Commission (SEC) officials and the heads of the large investment banks.
In recent months, developed economies around the world experienced an unprecedented shock – credit markets froze up, equity markets tumbled to record lows and major banks failed and whole countries were on the brink of default.
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