Winners and Losers: the Tale of Two Countries

The Most Important Competition in the World Today

Argentina is a vivid case study of the importance of governance and resource stewardship, and far from the only one. We can track the ebbs and flows of capital and talent around the world, and in doing so, glimpse those who are winning — and those who are falling behind — in what I call “the governance competition”.

This competition is a high-stakes contest for capital and talent in which every nation, state, and city participates. On the line are their short-term performance and long-term strength. The winners are those whose government are most trusted and most competent. Sound governance translates into stability and strong brand equity, boosting investment and growth. The competition is fierce and ongoing. The winners of today are not guaranteed to be the victors of tomorrow.

Capital and Talent Gravitate Toward Good Governance

Capital and talent flow from less well-governed places to better-governed ones, not only between countries but also within a country, as regions and states compete for private-sector investment.

Weak governance impoverishes a nation through high inflation, currency devaluation, loss of purchasing power, and higher interest rates for business and government. The Turkish lira has lost 80% of its value against the U.S. dollar over the past 10 years as capital has fled the country.

Architecting Nations: The Role of Leaders

Despite its critical importance, governance is often conflated with — or overshadowed by — leadership. More attention seems to be directed toward the policies and decisions of individual leaders rather than the tradecraft of building sound and lasting institutions, systems, and processes.

Looking back over history, we can discern various leadership archetypes. There are the ‘hero leaders’ who have led a nation to victory on the battlefield, the political leaders who were elected based on an appealing political philosophy or social ideology, and then there are the national architects, those whose legacy is a set of laws, institutions, and systems that create a foundation for lasting prosperity.

Sometimes, a leader will be a mix of archetypes. The French emperor, Napoleon, was a military genius who created a set of laws (the ‘Napoleonic Code’) and institutions that became the pillars of a strong system of governance. Looking further back in history at the great empires of Persia, Babylonia, and Rome, we find leaders who valued moral codes, laws, institutions, and systems. The Roman empire was one of the most enduring, lasting 800 years. The golden age of Rome was established by Augustus Caesar who created constitutional reforms, built lasting institutions and a competent civil service, and reformed the financial structure of government. The foundations he laid enabled Rome to enjoy 200 years of peace and prosperity, proving that strong laws, institutions, and systems were the best insurance against the weak leaders who followed him.

In more recent times, Lee Kuan Yew, the Prime Minister of Singapore from 1959 to 1990, stands out as an example of the quintessential ‘national architect’. He not only created a prosperous society in one generation, he also built the foundations (a constitution, laws, public institutions, and a civil service) that will enable the country to sustain its prosperity for many generations to come.

What can national leaders do to attract and retain talent and capital, and thereby, position their countries for sustainable growth and prosperity?

Building a High Trust Society: The Trust Waterfall

A decisive factor in building a strong and prosperous nation is trust. Trust is the oxygen of strong nations. The goal of governance should be the constant expansion of trust across all levels of society. Trust fosters greater investment, innovation, entrepreneurship, and economic growth. This growth, in turn, provides governments with the financial resources and tax revenue to build better systems, hire and retain talented civil servants, and deliver high-quality infrastructure and services, such as schools, hospitals, law enforcement, internet access, and public housing.

The fastest way to build trust is to eliminate corruption. Transparency International’s Corruption Perceptions Index shows that every country that has low levels of corruption has high levels of prosperity. There are no exceptions. This is why government integrity is so important. High trust societies start with the integrity of national leaders. We call this the ‘trust waterfall’. Integrity flows from government into the marketplace and then into the community.

Trust and prosperity are tightly correlated, and higher trust results in greater access to (and lower cost of) capital and investment. Hence, increasing the level of trust in government is always a top priority. Clear property rights, a strong rule of law, and effective anti-corruption systems all help. Yet, laws and rules are one thing, and compliance standards are another. Are the rules applied fairly and consistently? Can relationships or money purchase exemptions to them? Are the rules outdated, poorly-designed, overly-complex or bureaucratic?

Helping People Rise: Equal Opportunity and the Social Mobility Ladder

Governments around the world are under increasing pressure to address income inequality, lack of opportunity, and discrimination. There is a clarion call to build fairer societies, ones that provide everyone — regardless of race, gender or religion — with opportunities to be safe, healthy and educated, and to hold jobs, own homes, and participate in a vibrant marketplace. What people are seeking is a better life — the opportunity to climb the social mobility ladder and achieve their dreams.
‍
Entwined with the social mobility challenge is the idea of a ‘fair society’, where shared prosperity is anchored by policies grounded in social equity — equal rights and equal access to public goods and services. Building a strong social mobility ladder is key to building fairer societies. What is the strategy? Governments must develop policies that foster creative empowerment for everyone — policies that ensure inclusion, promote diversity, and guarantee access to accelerators, such as education, vocational training, and finance. Policy-making is insufficient without implementation, and for that, the quality of the civil service is paramount.

Strengthening Civil Service Capabilities

Noble leaders all believe in the ideal of building a society flourishing with everyone’s creativity — but this utopian dream has few role models. Why? Good ideas are not enough: it’s execution that distinguishes the strong nations from the weak. The soaring political rhetoric and campaign promises of politicians rest on the quality of a nation’s civil service to design and implement policy. In most cases, the machinery of government is ill-equipped to execute their responsibilities well.

The result of weak and inefficient public institutions is poor service delivery, wastage, lower social mobility, greater income inequality, and reduced national wealth and individual well-being. What can be done to improve this?

Strengthening Civil Service Capabilities

Noble leaders all believe in the ideal of building a society flourishing with everyone’s creativity — but this utopian dream has few role models. Why? Good ideas are not enough: it’s execution that distinguishes the strong nations from the weak. The soaring political rhetoric and campaign promises of politicians rest on the quality of a nation’s civil service to design and implement policy. In most cases, the machinery of government is ill-equipped to execute their responsibilities well.

The result of weak and inefficient public institutions is poor service delivery, wastage, lower social mobility, greater income inequality, and reduced national wealth and individual well-being. What can be done to improve this?

Governance as a Discipline: Tools for Practitioners

Is good governance a product of chance or choice? What governance skills and strategies are transferable, and which only work in certain contexts and cultures? I view governance as the architecting and engineering of nations — a discipline that can be studied and mastered. Interwoven in governance are a nation’s identity, culture, and national narrative.

To create the architecture, structures, and institutions  that stand the test of time, governance practitioners need the right training and the right tools. The Chandler Institute of Governance (CIG) was launched in 2019 to help provide both to public servants and policymakers so they can take up the mantle of public leadership and better serve their citizens.

Led by former officers from the renowned Singapore civil service, CIG is helping governments strengthen their capacity and capability, something that has become even more critical amid a pandemic, economic volatility and global protests.

This year, CIG launched the Chandler Good Government Index. Non-partisan and non-ideological, the Index analyses the effectiveness and capabilities of 104 countries’ governments, or 90% of the world’s population — the most comprehensive of its kind. This tool enables governments to identify their strengths and weaknesses and measure progress over time.

In 2021, CIG also launched the Chandler Academy of Governance. Its mission is to train and equip civil servants with the skills and tools to build stronger institutions.

Governance Matters is a new platform for governance practitioners. It is a place to recount successes and setbacks, to consider future trends as well as history’s lessons, and to share ideas and stories that aim to not only inform, but also inspire.

While Success is Sometimes Fleeting, Failure is Never Final

We have seen governments in our own lifetimes — and in the pages of history — build the foundations for enduring prosperity. The possibility of creating such a story is as available to Argentina as any other country today.

Let’s look at the continent of Africa, which has seen very patchy progress in governance despite decades of assistance from international agencies, NGOs, and philanthropic organisations. The lesson here is that poverty cannot be solved unless prosperity is created. And prosperity cannot be created without good governance, strong institutions, ethical cultures, and a professional civil service.

Competence is also in short supply, but this may have more to do with the lack of knowledge about governance generally. There is a difference between knowing what to do and knowing how to do it. The architecting and engineering of nation building is a poorly understood discipline globally.

Africa desperately needs a regional role model to demonstrate the pathway to prosperity. On 24 August 2021, Hakainde Hichilema became the seventh president of Zambia, a country which despite an abundance of natural resources, is one of the most impoverished in Africa: 60% of its population of 18.4 million live on less than US$ 2 a day. The average life expectancy is 61 years.

Could Zambia become the ‘Singapore of Africa’?  It is a dream shared by many African nations but achieved by none. Many would say this is impossible. However, 60 years ago, Zambia and Singapore both started with low GDP per capita bases. Can Hichilema, who inherits a country weakened by the corruption of previous administrations, become a national architect, creating a legacy of laws and institutions to set his country on a path to sustainable prosperity?

‍

Comparison Between Zambia & Singapore

Comparative GDP per Capita in Last 60 Years

‍

Today, Zambia ranks near the bottom of the Chandler Good Government Index at 95th out of 104 countries. Improving this position is a process which starts with the all-important steps of building trust, fostering social mobility and strengthening the capabilities of the civil service.

The Future of Governance: From Strategies to Blueprints

The challenges facing national leaders have never been so complex. They include climate change, cyber security, income inequality, and terrorism. But in most challenges, there also lie opportunities. For example, countries that can develop the best renewable energy, electric transportation, and hydrogen technology will lead the energy transition.

Overcoming challenges requires more than medium-term economic policies and industrial strategies. It requires a ‘whole of government’ blueprint for building a strong and resilient nation. Such a blueprint encompasses and combines the architecture and engineering of constitutions, laws, institutions, systems and processes with national identity, brand, culture, values, and heritage.

Governance is as old as civilisation itself, and yet, as a discipline it is surprisingly undeveloped. As the knowledge and tools of good governance evolve, the benefits to society will be immense. Those nations who master the architecture and engineering of governance to build professional and adaptive institutions, fair and just societies, shared prosperity and exciting national narratives will attract and retain the talent and capital that will meet the challenges of the near and distant future. They will not just be the winners of the governance competition, they will be the leaders of tomorrow’s world.