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Local government is core stone of the democracy and development of the given country. Global trend of the local
government has been rapidly changed and have adopted principles of good governance in their local institutional systems in
the world. Local government system in Sri Lanka has to be changed with parallel to global trend in term “Good
Governance”. Nature of Local government is significant regarding determine shape and nature of the democratic political
culture of the given society as whole. Global objective of the local government is to archive millennium goals by adopting
principles of good governance in practices. Sri Lanka is democratic country with consist their own local government system
since long historical time line. One of the main purposes of this local government system was to enhance democratic
practices by adopting universal trends and deliver rapid and quality service for the ordinary citizens for their social
wellbeing. Yet, recent trend has emphasized that most of local government institutions has been reflected lack of adopting
and practices of good governance principles with regard quality services in their institutional practices. Why? The overall
objective of this paper is to explore the main reasons behind the failure of good governance in practices of existing local
government institutions. This research, specially, focused on practices of good governance in local sphere. As a
methodology, to gathering facts and information that secondary data approach has to be applied in this regard. Therefore,
global literature has to be accessed for gathering information. Main scholarly writings and interpretations and arguments
have been reexamined in this paper. There are many reasons has been recovered with regard failure of good governance in
practices. Specially, party dominations have been impact on local government functions and services. Grass root social
composition and elite dominations has been manipulated local institutional system and their functions. Weak civil society
and their activities have been created a favorable environment for the corrupt oriented local institutional system. As well as,
electoral system and behavior of the elected people have negatively impacted on good governance of the local government
institutional system in Sri Lanka.
