State-Building: Governance and World Order in the Twenty-First Century

By: Francis Fukuyama

State-building is the creation of new government institutions and the strengthening of
existing ones.
Fukuyamas Arguments:
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State-building is one of the most important issues for the world community
because weak or failed states are the source of many of the worlds most serious
problems, from poverty to AIDS to drugs to terrorism.
While we know a lot about state-building, there is a great deal we dont know,
particularly about how to transfer strong institutions to developing countries.

Scope Versus Strength

Scope of state activities which refers to the different functions and goals taken on by
governments
Strength of state power the ability of states to plan and execute policies and to enforce
laws cleanly and transparently what is now commonly referred to as state or
institutional capacity.
The concern over state strength which goes under a variety of headings including
governance, state capacity, or institutional quality, has always been around under
different titles in development economics. There was an entire missing dimension of
stateness that needed to be explored that of state-building an aspect of development
that had been ignored in the single-minded focus on state scope.
If the central issue we are trying to understand is institutional capacity, we can begin on
the supply side, with the question of what institutions are critical for economic
development and how they ought to be designed. There are four nested aspects of
stateness that we need to address:
(1) Organizational Design and Management the first level of organizational design
and management corresponds to the domain of management studies (and business
schools) when applied to the private sector, and of public administration vis a vis
the public sector.
(2) Political System Design the second aspect of stateness has to do with
institutional design at the level of the state as a whole rather that the individual
agencies that compose it.
(3) Basis of Legitimization the third aspect of stateness is closely related to the
question of systematic institutional design but goes beyond it by including a
normative dimension that is, the states institutions not only have to work
together properly as a whole in an administrative sense, they also have to be
perceived as being legitimate by the underlying society.
(4) Cultural and Structural Factors the fourth aspect of stateness that is relevant to
institutional capacity is subpolitical and related to norms, values, and culture.

Insufficient domestic demand for institutions or institutional reform is the single most
important obstacle to institutional development in poor countries. Such demand when it
emerges is usually the product of crisis or extraordinary circumstances that create no
more than a brief window for reform. In the absence of strong domestic demand, demand
for institutions must be generated externally. This can come from one of the two sources.
The first consists of the various conditions attached to structural adjustments, program,
and project lending by external aid agencies, donors, or lenders. The second is the direct
exercise of political power by outside authorities that have claimed the mantle of
sovereignty in failed, collapsed, or occupied states. This is what the US labels nationbuilding.
Nation-building this terminology perhaps reflects the national experience, in which
cultural and historical identity was heavily shaped by political institutions like
constitutionalism and democracy. Europeans tend to be more aware of the distinction
between state and nation and point out that nation-building in the sense of the creation of
a community bound together by shared history and culture is well beyond the ability of
any outside power to achieve.
There are three distinct aspects or phases to nation-building:
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The first concerns what has to be called post-conflict reconstruction and applies to
countries emerging from violent conflict like Afghanistan, Somalia, and Kosovo,
where state authority has collapsed completely and needs to be rebuilt from the
ground up.
Second, the chief objective is to create self-sustaining state institutions that can
survive the withdrawal of outside intervention.
The third aspect has to do with the strengthening of weak states.

Conclusion:
A critical issue facing poor countries that blocks their possibilities for economic
development is their adequate level of institutional development. They do not need
extensive states, but they do need strong and effective ones within the limited scope of
necessary state functions. Strengthening these states through various forms of nationbuilding is a task that has become vital to international security but is one that few
developed countries have mastered. Learning to do state-building better is thus central to
the future of world order.
Prepared by:
Diana P. Gomez