Association between Governance and Human Development in South Asia: A Cross Country Analysis

Association between Governance and Human Development in South Asia: A Cross Country Analysis

Arindam Laha
DOI: 10.4018/978-1-5225-0215-9.ch012
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Good governance could play a catalytic role in creating an enabling working environment where the dream of sustainable human development can be fulfilled, whereas poor governance could erode individual capabilities to meet even the basic needs of sustenance for vulnerable sections of the population. Under this backdrop, this study attempts to explore empirically the association between the governance and human development in the context of South Asian countries. Broadly, a converging trend of both the indices of governance and human development across South Asian countries is noticeable with the passage of time. Moreover, substantial empirical evidences suggest that the state of governance and that of level of human development are positively correlated in the sense that countries having a better functioning of governance system are also the countries with relatively high levels of human development.
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The Millennium Development Goals (MDGs) set by the United Nations is intended to design a framework of ‘development with dignity’ for all human beings in an effort ‘to expand the benefits of human progress for all’ (UNDP, 2012). A set of time bound targets on achieving key elements of human development is said to be achieved by 2015. Even though the MDGs do not entails an element of governance, but he Millennium Declaration in 2000 restated the crucial linkages between good governance, development and human rights. It has been widely accepted that governance can ‘play a stronger role in the post-2015 development agenda’ (UNDP, 2014). In fact, good governance can create an enabling environment in which all the development criteria can be achieved. However, a wide variation exists in the achievement of human wellbeing of the population across countries of the world in the human development indicators of life expectancy, years of schooling and income. The latest human development report based on 187 countries reveals the lowest regional Human Development Index (HDI) values are for Sub- Saharan Africa (0.502) and South Asia (0.588), and the highest is for Latin America and the Caribbean (0.740), followed closely by Europe and Central Asia (0.738) (UNDP, 2014). Worldwide the female HDI value averages about 8 percent lower than the male HDI value. Among regions, the largest gap is in South Asia (17 percent) (World Bank, 2012). Even though all the countries more or less registered improvement overtime, but growth rate of HDI values reveals a signs of a slowdown in the progress. But lower human development groups continue to converge with the higher levels. Despite a trend of convergence in human development in South Asian countries, average HDI for South Asian countries is observed to be significantly lower than the average for developing countries. Cross-country evidence of South Asian countries suggest that only one country (Sri Lanka) included in the group of high human development, four countries (Maldives, India, Bhutan and Bangladesh) in the medium human development, and the rest four countries (Nepal, Pakistan, Myanmar, and Afghanistan) in the low human development (UNDP, 2014). Sri Lanka and Maldives stand out from the rest of the regional group, recording HDI levels higher than the developing country average. This is primarily due to the higher level of social sector expenditure to improve human development of the general population in these two countries, even though both these countries have lower absolute GDP levels than the rest of the South Asian Countries (MUHHDC, 2008). Here the role of governance arises.

Key Terms in this Chapter

South Asia: is the southern region of the Asian continent, which comprises the sub-Himalayan countries like Bangladesh, India, Sri Lanka, Pakistan, Nepal, Bhutan, Maldives, Afghanistan and Myanmar. South Asia is comprised of over one fifth of the world's population, and thereby considered as the most populous and the most densely populated geographical region in the world. It is to be noted that the South Asian Association for Regional Cooperation (SAARC) is an economic cooperation organization in the region which was established in 1985 with the active cooperation of seven countries — Bangladesh, Bhutan, India, the Maldives, Nepal, Pakistan and Sri Lanka.

Human Development Index (HDI): Since 1990, UNDP used to provide a summary measure of human development. It conceptualized the well-being of the population by measuring the average achievements in a country in three basic dimensions of human development: a long and healthy life (as measured by life expectancy at birth), knowledge (as measured by the adult literacy rate and the combined primary, secondary, and tertiary gross enrollment ratio), a decent standard of living (as measured by GDP per capita in purchasing power parity (PPP) terms in US dollars).

Good Governance: According to the World Bank’s measures of good governance, a country with good governance holds the figures of any or all of the indicators more than one and close to +2.5.

Convergence: In the Classical literature, two concepts of convergence appear: convergence and convergence. Convergence is said to have achieved if the dispersion of development indicators across a group of economies tends to decrease over time. On the other hand, absolute convergence will exist if the poor economies in the ladder of development tend to grow faster than rich ones. It is possible to consider the influence of some of the factors which plays an instrumental role in convergence. In this situation, it is said to have achieved conditional convergence.

Bad Governance: According to the World Bank’s measures of good governance, a country with bad or poor governance holds the figures of any or all of the indicators less than one and close to -2.5.

Governance: Governance is a process by which the ‘power is exercised in the management of a country’s economic and social resources for development’. Even though there exists several measures of governance, but the World Bank’s WGI is considered as the most popular quantitative measures of governance.

Governance Indicators: It is the set of indicators that defines the state of governance of a country. According to World Bank there are six indicators of governance which are Voice and Accountability (VA), Political Stability and Absence of Violence (PSAV), Government’s Effectiveness (GE), Rule of Law (RL), Regulatory Quality (RQ) and Control of Corruptions (CC).

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