Governance has become a key concept in the international development debate over the past ten years. It marks an intriguing transformation in focus from micro to macro issues. It also poses fresh challenges to those interested in relating socio-economic outcomes to macro interventions. After ten years of efforts to make sense of governance in development, many of these basic challenges remain. What is the relationship between governance and development? What does governance really refer to? How can the concept be best put into analytical usage? What analytical advantages does it have? This introductory paper tries to address these questions.

The document puts forward six functional Governance arenas:

    * Civil Society – the way citizens raise and become aware of public issues

    * Political Society – the way issues are combined into policy by political institutions

    * Government – the way policies are made by government institutions

    * Bureaucracy – the way policies are administered and implemented by public servants

    * Economic Society – the way state and market interact to promote development

    * Judiciary – the setting for resolution of disputes and conflicts

It also identifies six basic principles that reflect the emerging consensus at the global level of what should, and could, constitute ‘good governance’:

    * Participation: the degree of involvement and ownership of affected stakeholders;

    * Decency: the degree to which the formation and stewardship of rules are undertaken without humiliation or harm of the people;

    * Fairness: the degree to which rules apply equally to every one in society regardless of status;

    * Accountability: the degree to which public officials, elected as well as appointed, are responsible for their actions and responsive to public demands;

    * Transparency: the degree to which decisions made by public officials are clear and open to scrutiny by citizens or their representatives;

    * Efficiency: the degree to which rules facilitate speedy and timely decision-making.

It concludes by highlighting the potential advantages of using governance as an analytical tool.