Good governance implies effective political institutions and the responsible use of political power and management of public resources by the state. Essentially, it is about the interaction between democracy, social welfare and the rule of law. Good governance thus extends beyond the public sector to include all other actors from the private sector and society. Good governance is guided by human rights and by the principles of the rule of law and democracy, such as equal political participation for all. Particular attention is devoted to the needs of the weaker members of society.

In the United Nations' Millennium Declaration, the international community reached a consensus that good governance is not only an aim in itself but also a key factor in attaining human development and in successful poverty reduction and peace-building.

Promoting good governance is a central feature of German Development Cooperation, and hence an important activity area for GTZ. GTZ's work in the field of good governance covers the promotion of democracy and rule of law. Human rights play a particular role in this context, especially women's rights. GTZ works in the field of law and justice, helps to fight corruption and promotes the responsible use of public finances. It supports government and administrative reforms, decentralisation and regionalisation of state power and the development of local and municipal government. In doing so, GTZ promotes locally appropriate approaches; it not only cooperates with government institutions but also promotes civil-society actors.