Good governance and market-based reforms : a study of Bangladesh

‘Good governance’ is increasingly regarded as pivotal to development in developing countries. The six indicators recognized as the most effective measurement tools of ‘good governance’ across the world are: voice and accountability; political stability and absence of violence; government effectiveness; regulatory quality; rule of law and control of corruption (Kaufmann, Kraay and Lobaton, 2003: 8–9). This paper investigates how lack of ‘good governance’ affects the success and sustainability of the market-based reforms undertaken in the agriculture sector of Bangladesh. The reforms have been associated with increased food grain production, improved food security conditions and easy access by farmers to agricultural inputs. However, a significant problem has arisen recently: the sale of low quality and underweight agricultural inputs sometimes at higher prices has become common. Not only is this problem undermining the positive impact of the reforms, it is also threatening their sustainability. The paper argues that the problems with regulatory quality, rule of law and control of corruption – indicators of good governance – are the underlying reasons for this problem. In the context of increasing pressures from donors to pursue market-based reforms, this paper stresses the need for integrated governance linking government, business and civil society as paramount for promoting good governance for the success and sustainability of the reforms.