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The rules and enforcement mechanisms that guide and coordinate people’s behaviour have become central issues in international development cooperation. Understanding the governance framework is a precondition for successful projects and programmes also when dealing with sustainable management of natural resources. GTZ has been working in this area long before this term came to the fore. Not incidentally, governance is GTZ’s annual theme in 2004. Relative to purely technical aspects, the political and the institutional dimensions of its practical work have grown to be more and more prominent. Hence, it seems all the more important to share our experiences in governance analysis across sectors and thematic affiliations, and to make lessons learned more easily accessible.

This manual aims to provide a common concept and a terminology which helps to understand governance issues beyond sectoral boundaries. It analyses incentive mechanisms that foster the misuse and overexploitation of natural resources, and identify approaches how to direct these patterns towards a more sustainable development in a market economy context. It was the authors’ explicit intention to base this manual on internationally well-established concepts in resource and institutional economics and to adapt them to GTZ’s practical work.

Following numerous case studies and in-depth discussions with colleagues, the manual features practical applicability. the publication proposes broad application in programme design, implementation and evaluation.