Canadians are helping build 'good governance' in the Developing World. But is democracy necessary for development, or is it the other way round?

You know you've hit a sore spot when a government minister attacks your research. In the case of Canadian David MacDonald, the political nerve in question ran not through Canada's Liberal Party but rather South Africa's African National Congress.

The verbal fireworks started last summer after MacDonald, a geography professor at Queens University in Kingston, Ontario, released with a U.S. colleague a study showing 10 million South Africans have had their water cut off by local municipalities due to nonpayment of bills.

"People [in South Africa] are making choices between food, school and clothes, and whether or not to pay their water and electricity," says MacDonald.

The findings of the Municipal Services Project, an initiative MacDonald co-directs through the Southern African Research Centre at Queens, highlighted the schism between the governing ANC's original social justice goals and its apparent embrace of free market policies - a discrepancy many blame on pressure from the World Bank.

But Ronnie Kasrils, South Africa's Minister of Water Affairs and Forestry, denied that the water cut-off was widespread. In a letter to the South African newspaper The Sunday Independent, Kasrils said that North American researchers were encouraging citizens to "break taps and meters" to access water illegally.

MacDonald, who regularly travels back and forth between Canada and South Africa, counters that the research was based on data collected for local governments. He denies that the trend, as has been suggested, stems from a culture of nonpayment in the townships dating back to pre-apartheid boycotts. The investigation was defended by a host of local groups including the South African Municipal Workers' Union.

MacDonald's project, backed by the International Development Research Centre of Ottawa, is helping build the research capacity of 'civil society' groups dealing with ANC economic policies on the urban poor. The project focuses on the downloading and commercialization - through mixed public-private delivery - of services such as water, electricity, sewage and health care.

Although being called an 'international radical careerist' by a prominent member of the ANC must have been a shock to MacDonald, used to less vituperative debates back home, it shows that South Africa's new democracy is robust and lively.

No doubt to the chagrin of the government there, South Africa is a nation where such shortfalls in public services can be challenged in the courts. It is fitting that research spearheaded by a Canadian could be used in a case against South African water policy, as that country's bill of rights is modeled on the Canadian Charter of Rights.

In the post-apartheid era, Canadians have been at the forefront of strengthening 'governance' structures in South Africa, both at the top through legal and judicial reform (training judges and magistrates in the new bill of rights, for instance), and at the grassroots level by providing tools for citizen participation.

Robin Sully, director of international development programs at the Canadian Bar Association, says that Canada's constitutional democracy has a lot to offer the rest of the world. Her organization is providing support for the Southern African Legal Assistance Network, a loose collection of public interest law centres and human rights organizations.

Sully adds that Canadians are viewed differently than other western countries, the U.S. in particular. Canada does not carry a lot of historical baggage, she says. "Canada doesn't have a colonial experience. We are not seen as an imperialistic power."

South Africa's bill of rights in fact goes further than the Canadian Charter in its inclusion of social and economic protections. "The potential to create a progressive society [is there because] everyone has the legal right to health, safety, clean water, sanitation and housing," says David McDonald.

So far, few legal challenges have been launched to clarify the level of a government's responsibility towards its citizens. However, one provincial constitutional case in the western Cape did rule that squatters had to be given adequate shelter, notes MacDonald.

But is it an axiom that democracy, human rights and the absence of corruption are essential ingredients for development and poverty reduction? Most foreign aid providers would answer yes.

Studies by the World Bank, says Robin Sully, demonstrate a strong connection between governance and the rule of law on the one hand and poverty reduction on the other. She is adamant on this point. "Not a maybe. It is absolutely critical. In fact, it is the most critical."

Yet South Africa, which has one of the best constitutions in the world, an established rule of law, and a politically astute and active populace, still has poverty and high unemployment. However, South Africa is in better economic shape than other sub-Saharan countries on the continent.

So what comes first, democracy or development? Louis Lefeber, a professor emeritus in economics at York and former advisor to the Papandreou government in Greece, says there no simple answer to this 'chicken and egg' conundrum

Lefeber points to Cuba where significant advances in basic nutrition, education and health have occurred in a country that lacks 'Western' ideals of democracy, namely freedom of speech and broad political choice. "In contrast, there is, for example, India where all of these freedoms exist but a large part of the population continues to live at or below minimum subsistence."

For the Washington-based World Bank, which first used the term 'good governance' within a development context in the early 1990s, there is a greater stress on accountability, transparency and a recognized legal framework at the government and bureaucratic level. This leading international donor agency has come into sharp criticism for its structural adjustment policies, which include privatization, deregulation and fiscal discipline at the expense of living conditions of the people in the countries receiving the loans.

The Institute of Governance in Ottawa prefers the United Nations' insistence on "democratic governance." This definition is what the institute's director Claire Marshall calls "a huge grab bag" of components: government, civil society, media, private sector, history and culture. Fixing government alone is not the entire story, she says.

"When we talk about governance, we are looking at the way in which public policy issues are decided. We are looking at the institutions and traditions around decision-making. We are looking at who has voice. We are looking at the sharing of power."

Fahim Quadir, who heads York University's international development studies program, says the World Bank is not necessarily concerned about promoting democracy and human rights. Yet many international donor agencies have drawn on the World Bank's definition of governance for their own aid programs.

The Canadian International Development Agency (CIDA - the government's foreign aid wing), "is a bit more focused," says Quadir, "in the sense that it talks about the importance of democratization, human rights, civil societies. The World Bank does not have the mandate to address these political issues."

CIDA has promoted 'non-governmental organizations' as essential tools for building citizen participation in developing countries, adds Gerry Barr, president of the Canadian Council for International Co-operation, which represents Canadian development groups. "You can do extraordinary and innovative things through the support of civil society organizations."

He cites CIDA's financial support of Oxfam Canada's Horn of Africa Capacity Building Program. However, he is concerned that CIDA's funding support for NGO and university-led projects is down by 12 per cent since 1989.

Governance and democracy may be inextricably linked, but economic development can occur in undemocratic states, says Claire Marshall of the Institute of Governance, listing Singapore, Brunei and Saudi Arabia as examples.

Robin Sully of the Canadian Bar Association has learned from overseas work that no easy and simple "blueprint" exists for good governance. "All you can do is go in and help them identity [their needs] and facilitate their process."

She brings up the example of foreign experts arriving and urging the adoption of their home country's model of, for instance, environmental protection - holus bolus. "That will hardly work. Most countries have got many good laws, lots of them in fact. Bangladesh is a good example. It has volumes of laws. None of them are being implemented. They are not appropriate."

Many of the problems of good vs. bad governance stem from the existence of corrupt elites in developing countries, says Iris Almeida, director of policy and planning at Rights and Democracy in Montreal, which funds democracy projects around the world. "One of the key obstacles to democratic governance in many developing countries is that the local elite often believe that holding political office is the surest and fastest way to amass wealth."

There is no big dent yet in the armour of worldwide corruption, despite the best efforts of international bodies to fight it, says Dr. Daniel Kaufmann, director of the World Bank. In a speech delivered last December in Merida, Mexico, at the signing of the UN Convention against Corruption, he stated that this scourge must be tackled within "a broader governance context" of rule of law, property rights, a free press and transparent campaign financing.

Kaufmann bemoaned the role that influential business conglomerates play "in affecting policies and institutions in a country - sometimes for the better, at times for the worse." Yet he denied that globalization encourages corruption. "There is no evidence that privatization results in increasing corruption, and where transparent and competitive methods of privatization prevail, in fact, the contrary is the case."

But the World Bank misses an important point, warns Professor Louis Lefeber. In one form or another, "corruption is an integral part [of global business]. The problem is as much with the developed as the less developed economies."

"For example, the bribing and lobbying costs incurred by multinationals [are often] tax deductible in industrial countries."

So good governance does not begin and end with a country's governmental and judicial institutions. Ultimately, nations need an informed, empowered population - women and men - and civil society organizations to hector and pressure governments to make serious efforts to combat poverty and spread the wealth around.

It may not be straightforward or even polite, as David MacDonald learned in South Africa, but it is democracy.

Written January 2004.