There's an interesting piece on good governance here:
http://ksghome.harvard.edu/~drodrik/Thinking%20about%20governance.doc
"
A deep insight that has emerged out of the disappointments of the
Washington Consensus is that successful policy reform is at its core
governance reform. Reforms in the areas of, say, trade or fiscal
policy require much more than just cuts in tariffs and a balancing of
the budget. If you want to achieve lasting change and have a real
impact on the behavior of those agents that determine the success of
reform, you must change the "rules of the game"—the manner in which
trade policy is made or fiscal policy is conducted. This insight,
assisted and reinforced by the academic literature on institutions and
growth, has in turn produced a new development agenda focusing on a
broad list of governance reforms. These reforms target a lengthy list
of objectives, including reducing corruption, improving the rule of
law, increasing the accountability and effectiveness of public
institutions, and enhancing access and voice of the citizenry. The
agenda is neatly captured and quantified by the Kaufmann-Kraay
Governance Indicators data set.
Much of this is for the good. In particular, the tilt towards
governance has the virtue that it helps shift the focus of reforms
towards objectives that are desirable end-goals in and of themselves.
The items on the original Washington Consensus agenda were all of
instrumental value at best. Playing around with tariff and tax
schedules and with the composition of public expenditure is worthwhile
only to the extent that it achieves other objectives we really care
about: increased growth, reduced poverty, improved equity. By
contrast, it would be hard to take issue with the intrinsic importance
of improved governance along its various dimensions: rule of law,
transparency, voice, accountability, effective government. We might
even say good governance is development itself. Combine it with
material well-being, and we attain the Nirvana of advanced societies.
So good governance is both an end and a means. It is a key goal of
development, broadly construed, and it is also an instrument for
achieving better policymaking and improved economic outcomes. Any
sensible discussion of governance must be clear about the distinction.
And it must clarify in which of these two senses governance is "the
problem" we are trying to fix.
I make the following points below. First, economists have very
little useful to contribute to governance-as-an-end. Second, while
they have more to say about governance-as-a-means, what they do say is
often not what they should say. Where economists can be useful is in
designing institutional arrangements for specific policy reforms
targeted at relaxing binding growth constraints--what one might call
"governance in the small." This agenda differs quite a bit from the
broad governance agenda on which much ink is being spilt. And third,
there are sometimes tradeoffs between governance-as-an-end and
governance-as-a-means which policymakers and advisors need to be
conscious of. "
