The nature of governance has differed widely across societies, and what is more interesting, within any particular society depending upon the stage of development. Governance is better defined in functional rather than in value terms. Functional governance aids and abets industrialization-the one change that all societies have to necessarily strive for and without which no development is possible. In contemporary democratic societies which are trying hard to industrialise, that insight needs to be tempered with the limitations of the state that is a coalition of many classes. More importantly, just because functional governance was not the good governance in the past in many countries, that it today cannot be both good and functional is not the case. The point, though, is that unless it is functional it can never be good. Functionality of governance is best assured when the policies, followed by the state in its drive to industrialise, are correct. The main lesson from history is that the first thing to do is to bring about the initial conditions necessary for the industrialisation of the economy. The key bottleneck here is tenurial relations in land which stand in the way of output increases from the poor farmers. The egalitarian income distribution of the land reform ensures that nearly all the poor are participants in the market. All other conditions necessary for the unambiguous transformation already obtain today in India. Also described is the process of change and the sense in which the economic is primary to societal change, implying that there are particular ways in which individuals and small groups including reformers can bring about change. It is important to recognise the specific ways in which small groups including elements with government can bring about change. The paper also includes a case study on corruption and governance in China which concludes that the gain from and level of corruption itself is likely to decline in the country soon. 

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