Rule model

Governance Culture and Development: A Different Perspective on Corporate Governance
OECD Observer

Many experts argue that OECD’s Principles of Corporate Governance are not relevant to the issues faced by developing and emerging market economies. Cases such as Parmalat or Enron belong to the rich world, and their affairs to those of wealthy OECD countries. But if poor governance of corporations can ruinously affect a nation’s economic growth – in addition to the lives of millions of individuals – shouldn’t developing countries take notice?

Yes, says Governance Culture and Development, though with some caveats. After all, as this report from the OECD Development Centre points out, the strong growth sustained both in continental Europe after the war, and in certain countries during the “Asian Miracle” from the 1960s to the 1990s, was achieved despite corporate governance structures which would be deemed very poor by today's standards. Indeed, the Golden Age from 1945-1973 in France (known as the Trente Glorieuses), when the country experienced the highest sustained growth in its history, also bears witness to this, and the book examines the French experience in some depth.

The trouble is, most developing and emerging market economies have to deal with the demanding governance challenges of today’s global market, whether they are trying to catch up, or make a transition to more innovation-based growth. So, while up-to-date structures satisfy lawmakers and stakeholders in the OECD area, do they help or hinder growth elsewhere?

There is no easy answer to this question, says Governance Culture and Development, but it acknowledges that good corporate and public governance lifts a country’s long-term development. Those countries, like Korea and Singapore, that succeeded in spectacularly catching up with advanced economies like Japan and the US, had put in place systems that focused on public governance and general interest, rather than giving priority to a corporate focus, with potentially conflicting private interests. Developing countries could look more at these new examples, rather than focusing on the orthodox school of governance from the US and Britain, argues Governance Culture and Development. By shedding new light on different governance cultures, their logic, their dynamics and their potential traps, the report demonstrates that while fostering good governance counts, we must change the way we judge the quality of a country’s institutions of governance.

©OECD Observer No 244, September 2004

Economic data


Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Suscribe now

<b>Subscribe now!</b>

To receive your exclusive paper editions delivered to you directly

Online edition
Previous editions

Don't miss

  • Read some of the insightful remarks made at OECD Forum 2017, held on 6-7 June. OECD Forum kick-started events with a focus on inclusive growth, digitalisation, and trust, under the overall theme of Bridging Divides.
  • Checking out the job situation with the OECD scoreboard of labour market performances: do you want to know how your country compares with neighbours and competitors on income levels or employment?
  • Trade is an important point of focus in today’s international economy. This video presents facts and statistics from OECD’s most recent publications on this topic.
  • How do the largest community of British expats living in Spain feel about Brexit? Britons living in Orihuela Costa, Alicante give their views.
  • Brexit is taking up Europe's energy and focus, according to OECD Secretary-General Angel Gurría. Watch video.
  • OECD Chief Economist Catherine Mann and former Bank of England Governor Mervyn King discuss the economic merits of a US border adjustment tax and the outlook for US economic growth.
  • Africa's cities at the forefront of progress: Africa is urbanising at a historically rapid pace coupled with an unprecedented demographic boom. By 2050, about 56% of Africans are expected to live in cities. This poses major policy challenges, but make no mistake: Africa’s cities and towns are engines of progress that, if harnessed correctly, can fuel the entire continent’s sustainable development.
  • OECD Observer i-Sheet Series: OECD Observer i-Sheets are smart contents pages on major issues and events. Use them to find current or recent articles, video, books and working papers. To browse on paper and read on line, or simply download.
  • How sustainable is the ocean as a source of economic development? The Ocean Economy in 2030 examines the risks and uncertainties surrounding the future development of ocean industries, the innovations required in science and technology to support their progress, their potential contribution to green growth and some of the implications for ocean management.
  • The OECD Gender Initiative examines existing barriers to gender equality in education, employment, and entrepreneurship. The gender portal monitors the progress made by governments to promote gender equality in both OECD and non-OECD countries and provides good practices based on analytical tools and reliable data.
  • They are green and local --It’s a new generation of entrepreneurs in Kenya with big dreams of sustainable energy and the drive to see their innovative technologies throughout Africa.
  • Interested in a career in Paris at the OECD? The OECD is a major international organisation, with a mission to build better policies for better lives. With our hub based in one of the world's global cities and offices across continents, find out more at .

Most Popular Articles

OECD Insights Blog

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2017