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Corruption, Good Governance and Economic Development: Contemporary Analysis and Case Studies
Chapter 1
Introduction R. N. Ghosh and M. A. B. Siddique
I The question may be asked, why is it important to discuss good governance as a prerequisite for sustainable and environmentally friendly development? The answer to the above question lies in the historical experience of failure to achieve economic growth by many countries of Africa, Asia and Latin America in the past several decades. Since the end of World War II, the economic literature on development focused attention on key economic and demographic variables that affect development. For example, it was argued, following W. A. Lewis, that low income countries did not generate sufficient domestic savings (and investment) to bring about the necessary transformation from a low to a high income economy. Hence it was argued that such low income countries needed foreign capital and know-how to overcome the savings bottle-neck. However, despite the flow of massive amounts of foreign capital to many low income countries in Asia and Africa, many of these countries failed to record any significant improvement in the standards of living of the people. Injection of foreign aid from the international financial institutions and the OECD countries had only significantly benefited minority and vested groups, who held political and economic power, in many of the low income countries. These minority and privileged groups spent their wealth on “conspicuous” consumption of imported luxury goods; and they also engineered to spend huge amounts of money on military hardware and unproductive defense 3
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