July 5th, 2022 at 10:50 am
Why does good governance matter for the IMF?
Good governance is an approach used by the government to create a system that is founded on justice and protects the human rights of individuals. Good governance is characterized by transparency, participation, rule of law, accountability, and efficiency.
1 . Participation:
Good governance requires the perspective of everyone in decision-making. Either directly or through the use of intermediary institutions like the parliament.
2 . Rule of law:
This refers to a legal framework that is fair to enforce the laws in society. It ensures that there is impartiality which helps to protect the right of individuals. Especially, those that are marginalized in society.
3 . Transparency in the delivery of fair service to the citizens.
Transparency is built on individuals having easy access to information regarding various policies and their implementation.
WHY IS THE IMF CONCERNED WITH GOOD GOVERNANCE?
The IMF is an acronym for International Monetary Fund. It is a financial body that works to secure sustainable growth for its member state by coming up with economic policies that foster financial stability.
The IMF is concerned with good governance because good governance has a positive impact on economic growth. Countries with poor governance are corrupt as well, distorting the finances of the public purse. Also, weakening the domestic revenue that has been mobilized.
It is estimated that about US$1 trillion of tax revenue is lost globally. Also, due to the multiple crises faced by the world,( covid 19 pandemic and the Russian Ukraine war) the need for good governance has become more urgent. Good governance goes beyond wasting money, it is a factor in economic growth.
Again, the IMF is focused on good governance. This is because it seeks to reduce the vulnerability associated with corruption. It does this by strengthening the central bank governance, financial sector governance, fiscal governance, market regulation, rule of law, and anti-money laundering.
In addition, the IMF is concerned about good governance because it wants to work with countries and development partners to implement strategic programs that will cause a reform in the economy.
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