We can distinguish between financial, political and administrative elements of accountability. The exercise of accountability requires a system of laws, regulations and codes of conduct. In addition, mechanisms should be established for monitoring compliance and deviations, and institution of corrective measures. Financial accountability, which tends to be the main focus in this context, pays special attention to budgetary processes. It is deemed a necessary condition for good governance; prudent management of public resources; reduced corruption; better delivery of services; and a support to efforts at poverty alleviation. Strengthening financial accountability requires reforms almost across the board, touching on the parliamentary, judicial and administrative structures and modalities of government, and could thus entail a far-reaching revamping of governance systems. Governance and development We may now wish to address some thoughts on the reasons for the recent emphasis on governance in the development discourse. We have already alluded to the relationship between changes in the development paradigm and the evolution of the governance concept. Specifically in the context of World Bank interventions to foster development in the third world, various strategies had been pursued since about the 1960s, but the effort had not yielded the expected results. In grappling with this problem, the perception gained ground that the institutions of the state were fundamental to the development process and the use of aid, hence the “institutions matter” perspective that eventually emerged. The 1989 “crisis of governance” in Sub-Saharan African report was a landmark in this evolution, which triggered the mainstreaming of governance in the Bank’s development work.
Collective financial assets as a proportion of total financial assets Per cent  60  60 All sectors Private sector  50  50  40  40  30  30  20  20  10  10  0  0  1810  1830  1850  1870  1890  1910  1930  1950  1970  1990  2010  Source: Hasselberg and Ohlsson (2016)  With regard to the funded pension savings, the period with low interest rates has been a strain. Yield has been low and this has put pressure on the pension funds to meet the guarantees in their insurance plans. This has sometimes been raised as a negative effect of the expansionary monetary policy, but the problem – to the extent that it is a problem – is rather connected to the global falling trend in longterm real interest rates. 10 In light of this, economic agents need to adjust to interest rates probably not returning to the levels we previously considered normal. But at the same time, it is important to remember that interest rates in the long term will nevertheless be much higher than they are now. Price stability creates good conditions for economic growth and high employment If I am to summarise my presentation today, let me first say that I think it is a good thing that distributional effects are once again being discussed with regard to monetary policy.