Voice and Accountability

It has become a cliché to argue that genuine economic development can be envisaged only when it is accompanied by good governance (Kaufmann et al, 1999). Francis Fukuyama has argued that only in high trust societies can capitalism of higher order prevail (Fukuyama, 1995). Capitalism in low-trust societies can be vigorous at times but it cannot sustain itsel f for long at a level where good governance is observed. Trust is crucial in the sense that only with high level trust prevailing in business communications and transactions, in investment decision and implementation can one envisage achieving minimum communication and transaction costs and maximum profits. Robert Putnam (1993) has argued that in making democracy work, social capital is essential in facilitating and enabling joint discussion about, planning and implementation of public policy and institution building. Only when such social capital is embedded in civil society and mobilizes for democracy can one envisage democracy functioning well in society.