Governance is different from government. The former is broader than the latter. While the government can set policies, their outcome is determined by governance. Governance is what drives interactions among the multiple players, who are affected by policy, on the ground. Governance can also be understood to mean what hold people together in a network. If good governance is present, the network, or the group of players, will be able to achieve set objectives. The term governance also captures minimal state. People's suspicion of big government has led to development of minimal state. Governance incorporates state as well as non-state actors (Salamon & Elliott, 2002). The quest for taking care of collective interests in order to advance shared goals informs governance.
In public discourses, there is disagreement on whether governance and government are the same or they are different terms. What is clear, though, is that both words share the same basic meaning, but the realities of modern world have set them quite apart when looking at them from a wider context. The term government is derived from a Latin word that means "to govern" or "to manage". The executive in presidential systems is what constitute government. In parliamentary systems, the prime minister and the cabinet form the government.
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The authority of central government has been eroded over time. The debate about the terms "governance and government" centers on the question of whether there can be governance without government. The two are, however, interrelated and cannot be fully discussed or understood separately. Because governance operates away from the centre, there is accountability, integrity, and openness. On the flip side, governance weakness central government, because power is spread across with actors who are not accountable to the people, and this leaves citizens vulnerable.
The meaning of the term governance is not very clear. In popular usage, the term has over five known different meanings. Its widespread usage, however, has displaced the term "government." The term government has been associated with administration and bureaucracy, but recent innovations on how governments have incorporated market-based practices in delivering services to the people has introduced a new meaning to the traditional definition of what a government is (Rosenau & Czempiel, 1992). To incorporate the new ideas in government, governance as a structure has been adopted as an operating guideline.
Government has many uses, the first being governance as a minimal state. As previously noted, the adoption of market based ways to delivering services to the people catapulted the idea of governance to the front. Governance justify spending cuts because the term connotes efficiency. Government exit from participating in the market was driven by desire for less government. The term governance captures the new shift to less government.
As corporate governance, the term governance refers to the management of corporate entities. This management is based on the core principles of openness, integrity, and accountability. Under good governance the management is expected to disclose fully pertinent information, clearly define the roles and responsibilities of each employee, and every person who holds leadership role to be answerable for their actions. The idea of "good governance" originated from the private sector before it spread to the public sector.
International bodies, such as the World Bank and the IMF, have also started talking of good governance as the panacea of the problems of managing public resources. Their definition of good governance is equivalent to how corporate bodies define the term. The two institutions attach conditions when lending to the world countries. They insist on integrity, minimal government interference, and dealing with corruption.
Good governance is systemic, political, and administrative. The whole governance system must abide by the virtues of good governance, such as integrity and openness. If good governance is restricted to a few areas of government machinery, the ideals envisaged under the system can never be realized. Political, as well as administrative, changes are critical in good governance. Decisions are made by politicians and they are translated into tangible actions by the administrative arm of the government.
According to Kooiman, government directs whereas governance is what determines the outcome of policies. A government can introduce a policy, but the outcome of that policy is based on the interactions among the various actors who are affected by the policy. Governance is the tool the government can use to influence outcome of a policy. This requires adopting basic things such as transparency, integrity, fighting corruption, and promoting accountability.
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The idea that governance is what determines the outcome of a policy suggests that the central government is a not all powerful. Our modern world lacks a strong centre. Complex interactions are what influence the eventual outcome. For best results, the government should encourage even greater participation, as opposed to stifling interactions.
Rosenau uses the term "formal authority" to describe government and "shared goals" as a characteristic of governance. Network form of governance suggests that it takes a lot of actors to get something done. These actors are connected in a network. The workings in the network ensure service delivery constitutes governance.
Considering the changes that have been taking place in the world, governance was bound to emerge at some point. In the 1980s, for example, Thatcher and Reagan accelerated deregulation and government exit from the participating in the market. The result was a leaner government with little control of the private sector. Before deregulation, government backed or owned companies could influence prices and/or the quality of service, but not anymore. The government depends on much more complex arrangement to carry out its oversight role through co-regulation, self regulation, and public-private sector partnerships (Salamon & Elliott, 2002).
The relationship between governments, non-governmental organizations, private sector, foreign governments, and international bodies has introduced governance. This is what governs their interactions across board.
The term government is means the instrument of governing. Until recently, government was a monolithic entity that pervaded every sphere of life. Any state needs government to take up the responsibilities of governing. On matter of state, national governments held a monopoly. However, in the last twenty years, monopoly of national governments has been challenged. Globalization has brought down barriers between states (Heere, 2004). What is happening in china, for instance, is bound to have a ripple effect in Britain. Yet, the national government can do little to contain a situation because the source was outside its borders.
The flat nature our modern world has made it prudent for national governments to cooperate. This is what has led to explosive growth the European Union. This union has further eaten into authorities of national governments. Traditional authority of national government has been widely scattered across dozens of players. These players are not uninterested parties. They have mutual or shared interests. Governance is evolved as the tool that various interests can use to achieve their shred goals.
Although government and governance are two different terms, the latter was born out of the decline of the former.