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and corporate behaviour, and describes who has the authority to make decisions in acommunity, how those decisions are to be carried out and how different members ofthe community are included in the making, implementation and communication ofthose decisions.The effective exercise of governance effects all levels of society and plays anessential part in people’s personal lives and their communities. Recent studies(Reconciliation Australia 2002 and 2006) emphasised the importance of governancecapacity to the social and economic development of Indigenous people. Research byHunt and Smith (2006), analysing thirteen case studies of Indigenous communitygovernance, found that:• The development of governance capacity does appear to be a fundamental factor ingenerating sustained economic development and social outcomes.• Economic outcomes appear to be best achieved where effective Indigenous andnon-Indigenous governance coexist.• Successful governance appears to require basic prerequisites, such as housing,water, sanitation, education and health to be in place. Only then can a communityorganisation focus on economic development as its goal, rather than prioritising andbeing consumed with essential service delivery. (p.72)The capacity of people, groups, organisations and whole societies to govern consistsof governance skills, abilities, knowledge, behaviours, values, motivations,institutions, resources, powers and so on, which are determined by a combination ofhuman, social, cultural, infrastructure and resource capital. Without an effectivelyresourced capacity for governance, there is unlikely to be sustained community orregional development. For example, sound organisational governance requiresaccess to professional expertise. An understanding of financial management, andcorporate and administrative systems is a basic ingredient of effective governance(Dodson and Smith 2003; Sanders 2004; Smith and Armstrong 2005).A House of Representatives inquiry into capacity building and service delivery inIndigenous communities supported dual public management and communitydevelopment approaches to capacity building (HOR 2004).The public management approach emphasises the need to develop a community’sgovernance, administration, managerial and leadership structures and skills in orderto meet accountability requirements (Gerritson 2001). This approach has stronglinks with the ‘governing institutions’ and ‘leadership’ determinants of goodgovernance (see section 11.5).The community development approach is concerned with the empowerment ofcommunities so that they can participate in their own policy-making andimplementation, in the development of their own effective and culturally informedgovernance structures, and in developing the skills to take effective responsibility11.36 OVERCOMINGINDIGENOUSDISADVANTAGE 2007