This report synthesizes the current knowledge on why some countries have developed into prosperous societies while others have not, and puts forward conclusions for development policy. The report summarises qualitative as well as quantitative studies that have shown that quality of governance (QoG) factors, such as control of corruption, the rule of law, and administrative competence, have a strong positive impact on most standard measures of human well-being (e.g., infant mortality, life expectancy, and child poverty). QoG also has a positive impact on subjective factors, such as whether people state that they are satisfied with their lives, and if they perceive that they in general can trust other people in their society.
However, in surveying almost twenty-five years of intensive research, the authors find that it is not possible to identify one single aid policy initiative that can be shown to have had a significant effect on reducing corruption in recipient countries. The authors connect this to the fact that many of the institutional factors that their research points out as having a statistically high explanatory power are located on such a fundamental structural-historical level that they are not susceptible to political action. They also question the dominant theoretical approaches to understanding obstacles to good governance.
The authors recommend increased resources to strengthen the quality of government and the capacity of the public administration. The report concludes with a presentation of five distinct institutional changes which in empirical analyses have been shown to have a positive effect for QoG. These are a) a functioning and legitimate system of taxation, b) a merit-based system of recruitment and promotion of civil servants, c) universal and free education, d) gender equality in the public sphere, and e) a professional national audit agency whose results are made publicly available. Theoretically and empirically based arguments for why these reforms can be expected to have positive effects on QoG are presented.