One of the most powerful ideas in development in recent years has been good governance. At its most basic, good governance describes all the things governments do in order to allow development to happen. Checklists of good governance have usually contained elements such as transparency, accountability, the practice of democracy and the rule of law. In this respect, good governance is about having national institutions that can make fair and appropriate decisions about how a country is governed, and effective systems in place to deliver public services.

However, a significant part of the literature on governance highlights that ‘good’ governance is a relative term, and the ideas contained within the checklists and prescriptions are aspirational and often unrealistic when government institutions are weak and poorly resourced. The relationship between good governance and development is also not clear. It may be that considerable economic growth and poverty reduction are required first, to allow for the strengthening of national institutions before good governance can be attained. In addition, examples of countries with bad governance (according to the checklists) have achieved impressive outcomes in terms of poverty reduction and economic growth.

This paper reviews the evidence and considers how the performance of local governance can be improved in relation to the better delivery of services, through the use of a local governance performance index.