At the end of the 1980s policymakers all over the world were becoming increasingly aware that progress is not simply a matter of economic achievement; weak governments, arbitrary legal and judicial systems, corruption and poorly functioning administration also impede development. In 1989 the World Bank identified what it termed a "crisis of governance", particularly in Africa. Since the mid-1990s good governance has become a key concept in development strategies. The promotion of good governance involves creating the right political conditions for successful social, environmental and economic development in the partner countries in which development cooperation takes place. more

In the Millennium Declaration the world’s leaders stressed that the right of all people to live in dignity and freedom is best ensured through democratic governance based on the will of the people. Yet many democracies are still emerging, suffer from weak or corrupt government structures, are unable to guarantee legal certainty and fail to protect human rights. The international community is united in the view that capacities for implementing democratic principles and procedures must everywhere be strengthened. Germany has agreed a development cooperation project focusing on "Democracy, civil society, governance" with 33 partner countries. more

The World Bank estimates that the global costs of corruption – whether in the form of bribery, embezzlement, misappropriation, patronage practices or nepotism – amount to between one and four billion US dollars every year. Through corruption public resources are wasted instead of being used to promote sustainable development in the interest of all sections of the population. Corruption also endangers the development of democratic structures and puts the legitimacy of the state in question. Tackling corruption is therefore an area to be addressed in its own right as well as an across-the-board issue of German development cooperation. more

Many developing countries are rich in natural resources but poor in development opportunities. As a result of mismanagement, corruption and local conflicts, national revenues from the trade in natural resources often fail to benefit the poor. The World Summit for Sustainable Development in Johannesburg in 2002 therefore set up the Extractive Industries Transparency Initiative (EITI). Its aim is to increase the transparency of the cash flows resulting from the extraction of oil, gas and other natural resources, in order to prevent misuse of these funds. more