Promoting Good Governance: ADB's Medium-Term Agenda and Action Plan

Abstract

The Asian Development Bank (ADB) has learned through decades of experience that sustainable development depends on the quality of decisions made toward development and reform, and, equally, on the manner in which these decisions are taken and carried out. In October 1995, ADB members reached a consensus to apply this fundamental lesson in a more systematic way in ADB’s overall operations. Thus, ADB became the first multilateral development bank to have a board-approved policy on governance. The governance policy became the basic building block for a cluster of good governance policies, which now includes policies on procurement, law and policy reform, participation of civil society, and anticorruption. Good governance has since also been established as one of the three pillars of ADB’s Poverty Reduction Strategy. Without good governance, efforts at reducing poverty will not be effective. Therefore, ADB will introduce a performance-based allocation system, with particular emphasis on good governance, that enables ADB to effectively direct scarce Asian Development Fund (ADF) funds to countries in which they will have the greatest impact. With these additions, policy development in this field is now nearly complete, and ADB’s cluster of good governance policies provides a sound basis for addressing most of the governance problems confronting ADB’s developing member countries (DMCs). ADB will, of course, continue to review and, if needed, revise this policy cluster periodically based on experience.