A Starting Point: Understanding Governance, Good Governance and Water Governance - Climate Change and Water Governance: Adaptive Capacity in Chile and Switzerland - page 19

takes into account the different actors and networks that negotiate acceptable positions
in balancing trade-offs in policy and its instruments (Pahl-Wostl 2009 ) . As the
UNDP ( 1997 ) states, 'Governance is seen as encompassing institutions, as well as
the broader laws, regulations, policies and actions with which natural resources are
managed, as well as the networks of influence beyond just government, such as civil
society, private sector actors, and non-governmental organisations'. Management
on the other hand, is concerned with the application of these rules and operationali-
sation of the policy visions with the practical aspects of water allocation, protection,
prevention of harm from extremes (Folke et al. 2005 ; Pahl-Wostl 2009 ) .
The negotiation of different roles (state and non-state; formal and informal) in
policy formulation and implementation in governance has been elucidated through
the discourse on different types of governance (Rhodes 2007 ) . The classi fi cation of
different governance modes also has been defined by distinguishing between bureau-
cratic hierarchies, networks and markets (Thompson et al. 1991 ) . The concentration
of these modes in different national settings tends to be influenced by the political
regime within the country depending on the diverse 'economic, cultural and political
norms of a country and the behaviours or the legislature and legislators' (Rogers and
Hall 2003 , p 8), namely the informal institutional setting. Hierarchical governance
refers to the traditional model of top down political system with highly centralised
government and institutions. In many developed countries, this form of governance
has been supplanted by the growing implementation of the concept of subsidiarity
(the performance of functions at the lowest appropriate level).
The network mode is dominated by informal institutional arrangements and the
participation of state and non-state actors and together with market based gover-
nance has received increasing attention over the past few decades for its flexibility
and ability to provide access to new forms of knowledge (Kooiman 2003 ) , but is
vulnerable to challenges of accountability and legitimacy 1 if membership is not
representative. Market based modes tend to be dominated by non-state actors across
formal and informal institutions, and became a trend with increasing voracity from
the 1970s in attempts to resolve issues previously assigned to traditional centralised
command and control regulation, such as economic growth, social inequity and
environmental pollution (Meinzen-Dick 2007 ; Freeman and Kolstad 2007 ) . The
concept of market led governance transfers resource allocation mechanisms to the
private sector and the market, seen as more efficient than hierarchical forms of regu-
lation. The laissez faire market model, prominently supported by Milton Freedman
and the Chicago School, enjoyed considerable attention, particularly in the context
of the neo-liberal governance approach taken in Chile during the Pinochet regime
(Bauer 1997 ; Klein 2008 ; Valdes 1995 ). However, there is growing recognition that
pure market modes are quite rare and that market based mechanisms require effec-
tive regulation to ensure social and environmental needs are met (Bakker 2003 ;
Freeman and Kolstad 2007 ) .
1 For a definition of legitimacy see later discussion of good governance in Sect. 2.2 .