This paper explores the World Bank’s concept of “good governance” as applied in rural Central America. It argues that World Bank good governance seeks to constrain unequal accumulation and privilege in the public sector, but leaves largely unaddressed structural inequalities in the private sector and the conflation of economic and political power in the public sector. This paper suggests that the World Bank analysis does not adequately consider more embedded state/civil society relations linked to national and sub-national political cultures. In contexts in which nation-building projects have promoted forms citizenship linked to more activist “leveling” and paternalistic states, good governance is likely to be ideologically contested. World Bank good governance under these circumstances is unlikely to quell discontent or naturalize the neoliberal state.
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Collier and Dollar (2002) for example heavily weigh the economic achievements of the Asian “globalizers” in particular China and India which have achieved high levels of economic growth and reduced poverty. Critics question however the degree to which these Asian countries have implemented the market-oriented policies advocated by IFIs and are representative of market-led pathways to growth (Sumner 2004). Other scholars emphasize the difficulties of establishing causal relationships between specific policy measures and complex economic and distributional outcomes (Kiely 2004). See also Dollar and Kraay (2002) for an analysis of cross-national statistical data that finds a correlation between secure property rights and private investment and economic growth.
As Cohen and Centeno’s (2006) statistical analysis of market liberalization policies concludes Latin American “countries have not experienced any appreciable improvement in growth cross-national equality employment or national debt loads although there is some evidence of improved price stability near the end of the 1990s.” As discussed earlier however IFI-promoted structural adjustment programs are widely credited with helping reduce the region’s high rates of inflation an outcome which garnered a degree of popular support (Armijo and Faucher 2002; Hagopian and Mainwaring 2005).
A 2004 World Bank study (2004b) provides evidence that on a national scale rural Nicaraguans identified poverty as all-encompassing and were pessimistic about being able to escape this poverty.
Hagopian and Mainwaring (2006) note that economic subsistence and inequality along with street crime and corruption have emerged as key issues of grassroots discontent in Latin America. Latin American citizens tend to blame their governments for neoliberal policies and these policies have contributed to a gap between grassroots expectations and government performance.