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Multinational companies that mine, farm and process the natural wealth of these countries are the major beneficiaries of this low governance capacity and the weak taxation it brings.
Boards that recognized affective conflict and addressed it quickly were associated with high governance quality, whereas boards that were less willing to address affective conflict or ignoring it altogether were associated with low governance quality.
"The low governance, corruption problems, the lack of consideration of local communities in awarding titles forest titles, all those problems remain the same.
However, effectively addressing nationals involved in IUU fishing requires a dialogue between relevant countries and flag states, and this dialogue can be severely hampered when these flag states have a low governance capacity.
We also hypothesized that high total human population drives ineffective governance because high populations place a strain on governmental resources, thus increasing a country's susceptibility to low governance quality.
Moreover, ecotourism activities are at particular risk in low governance areas, because the wild nature and intact habitats that they market to their clients are seen by many, particularly locals, as unexploited and privately valueless, and thus ripe for conversion.
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Beginning last year, MSCI placed greater emphasis on issues of corporate governance for example, accounting issues, late filings, or cases where the chairman is also CEO excluding companies with the lowest governance scores.
Those countries in the lowest governance ranking group of governance are defined by poverty, ineffective health care systems, elevated HIV prevalence and significant international debt.
The results are as one might anticipate, with conflict ravaged countries like Somalia, Afghanistan, and Iraq appearing among the countries with the lowest governance scores, and countries like Switzerland, Sweden, and Singapore appearing among the countries with the highest scores.
The study showed close to 70% of high-governance-board directors were "strangers" when they joined their board, while only 25% of directors recruited to low-governance boards were unknown quantities.
Peru's Department of Madre de Dios provides us with an example typical of many other "low-governance" areas of the world (sensu [17]).
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com