Inti Martnez Book Review #3 POLS 395 3/20/2006 Francis Fukuyamas State-Building is a phenomenally instructive and insightful book

that should be read by anyone interested in working in government, or with a desire to learn the aspects of state-building that are crucial for a healthy state to bloom. Fukuyamas work also details which aspects of state-building are not useful (or beneficial) for a state to have direct control. In his preface, Fukuyama defines state-building as the creation of new government institutions and the strengthening of existing ones.1 For the author, statebuilding is crucial since most of the problems the world faces today are rooted in weak or failed states that need to be refurbished with adequate institutionswhich Fukuyama spends many pages explaining. Fukuyama does not consider big government as necessarily equal to incompetent government. Most developing countries that follow neoliberal guidelines and the Washington consensus of privatizing governmental businesses and other institutions, tend to have weak, incompetent, or non-existent government[s].2 The problem, then, is having a government with ineffective governmental institutionsregardless of their scope. In the first chapter, Fukuyama gives the example of the United States as a country which has a limited scope of state activity; but within this scope, its ability to create and enforce laws and policies is very strong.3 The author wants to make clear, before continuing his discussion, that scope and strength are two very distinct concepts. Scope, in this discussion, is the breadth that the state has in the affairs of the general public. Strength is the efficiency and effectiveness of a countrys government. There are certain institutions that a central government needs to handle in order for a country to benefit as a whole: domestic
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First sentence of Preface ix Preface x 3 Pg. 7

order, safety and security, defense, protection of property rights. Fukuyama creates a biaxial diagram where the strength of state institutions is compared with the scope of state functions. The farther up a state moves along the Strength axis, the more efficient and effective it is; the farther left a state moves along the Scope axis, the less breadth its institutions have. Within this biaxial diagram there are four quadrants. Quadrant I contains states with weak scope and considerable strength (USA); quadrant II represents states with a broad scope and extensive strength (Western Europe and Japan); in quadrant III one finds states with limited scope and puny strength (present Somalia and those which follow the neoliberal ideal); states with a broad scope and minimal strength are found in quadrant IV (Cuba, North Korea). [M]any Europeans argue that American-style efficiency comes at the price of social justice and that they are happy to be in quadrant II rather than quadrant I.4 The basic idea is not only that the government that governs the least, governs the best, but also that with a limited scope, government should be very efficient (i.e., strong). Fukuyama notes Milton Friedmans remarkable statement that privatizing is not the sine qua non for a country to move from chaos and poverty to order and abundance5which was Friedmans trademark for many years and an inspiration for Ronald Reagan in the 1980s. Friedman states that the rule of law is even more basic than privatization. Without law enforcement and a law-abiding culture, it is extremely difficult for a state to take off. Fukuyama compares East Asias superior performance and Latin Americas stagnant economy during the past forty years. He attributes the former regions success to the quality of the institutions it espoused, rather than to any measure of state scope.6

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Pg. 11 Pg. 19 6 Ibid.

The author accurately recognizes that even though a state model or an organization of institutions works well in a specific location, it does not imply that it will work just as well in another location. Fukuyama addresses four aspects of stateness that need to be identified with the purpose building appropriate institutions in a given location. The first aspect to be addressed is the organizational design and management. This aspects relates to the domain of management studies (and business schools) when applied to the private sector, and of public administration vis--vis the public sector.7 The second aspect has to do with institutional design at the level of the state as a whole rather than the individual agencies that compose it. Basically, the way the political system is designed needs to be taken into account when deciding how state is going to conformed. The third aspect relates to how institutions are perceived by the society it is working for. State institutions (both public and private) need to be seen as legitimate and necessary in a given society. Take the example of Bolivian president, Evo Morales, who is planning to abolish the Indigenous Affairs Ministry from the government. In Bolivia, where 60% of the population is fully indigenous and 80% of the population has some degree of indigenous blood, it is rather ridiculous and discriminatory to have an institution that advocates for indigenous rightsas if they were a minority like in Argentina, Chile, or the US.8 Fukuyama writes A good state institution is one that transparently and efficiently serves the needs of its clientsthe citizens of the state.9 The fourth aspect is subpolitical and related to norms, values, and culture. If an institution has established policies that run against the traditional norms of a society, the institution will be a complete failure. The institution has to adapt to the locals lifestyle and preferences. As an analogy, a food company like Taco Bell has tried to do business in Honduras in at least two

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Pg. 23 BBC News: http://news.bbc.co.uk/2/hi/americas/4627116.stm 9 Pg. 26

occasions. After one or two years of low clientele, it has decided to close its doors. They were not as innovative as Burger King in satisfying peoples traditional tastes; wimpy hot sauces, tacos, and burritos from Taco Bell arent good enough for most Hondurans. Helping poor countries with financial aid from abroad demands from the receiving country the creation and the reform of institutions. The problem with this is that countries that are already better-off tend to meet the reform requirements, and thus get the money. Fukuyama points out that some countries, while getting a lot of money from abroad and enacting institutional and economic reform, do not actually develop as intended. Thus, the goal of creating a self-sustaining state through economic incentives fails.10 Chapter two delves into more detail on how a state needs to adapt to good practices that will conform to the populations culture. Fukuyama explains how the principal-agent theory works, both in private and public sectors. The agent is the one working for the principal in order to satisfy it. In the private sector, the agent is the store owner who wants to satisfy her customer with her product. In the public sector, the agent is the government official who serves the general public and tries to bring the best to the community at large. The unilateral relationship of the agent striving to satisfy the principal seems rather unrealistic. All in all, Fukuyama says, this theory deviates from how humans work in reality.11 In order to monitor more effectively the way the public sector works, the author presents a framework where transaction volume and specificity are compared in a biaxial diagram. Specificity is the ability to monitor a service output. (In other words, it measures the quality of the good or service.) Transaction volume is the amount of individual products or services a given institution or employee performs. The higher the specificity, the easier it is to find out how good a product or service is. A guidance counselor, Fukuyama says, has a high
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Pgs. 37, 38 Pgs. 48-50

level of transactions but a low level of specificity. It takes several years or decades to find out if the advice from the counselor actually was beneficial.12 On the other hand, the performance of the sound technician for President Bushs State of the Union Address has a high specificity because if the president cant be heard, everyone finds out right away. All this discussion of output and performance is important to measure how well a state institution or policy is working. On page 66 Fukuyama correctly assesses that beyond the mathematical and observable reasons why low-specificity activities are performed more efficiently in developed countries than in underdeveloped countries, lies the fact that norms and work ethic are respected in developed countries. Office workers in the US, compared to office workers in Honduras, are more responsible, punctual, and efficienteven when the boss is not around. The ability to be self-motivated and show self-restraint is crucial in a worker who wants to perform well. Fukuyama considers it reprehensible for a developed country to come to a developing country to try to help it using the same model it uses at home to create institutions and bring beneficial goods and services to the receiving country. Every bit of technical assistance that displaces a comparable capability on the part of the local society should be regarded as a twoedged sword and treated with great caution.13 A good example of how native practices should be taken into account is the example of foreign relief agencies in Nicaragua investing in housing projects using concrete blocks or brick to build houses relatively quickly instead of spending more time and work making them out of bajareque14. During an earthquake, the

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Pgs. 56-59 Pg. 88 14 Bajareque is a mix of mud or clay and sugarcane sticks

houses that stand firm are the ones made out of bajareque, thanks to its internal strength and flexibility; houses made out of concrete block are the first ones to come down.15 In the last 30 pages of his book (chapters 3 and 4), Fukuyama puts weak states in the international realm and wrestles with the question of their legitimacy in cases when they commit human rights abuses, provoke humanitarian disasters, drive massive waves of immigration, and attack their neighbors.16 He gives a list of nations that he considers weak or failing for being the host of most of the international crises since the fall of the Berlin Wall in 1989. The danger of these nations is that they can easily be hijacked by a non-state actor, a terrorist cell like al-Qaida, and serve as a base of global terrorist operations.17 Thus, their internal weaknesses make them illegitimate, and could legitimately be invaded or influenced by a developed country in order rebuild itall for the good of the failed states citizens and the international community. Since the US cannot intervene in every single state that harbors terrorists, it must be up to its citizens or neighbors to organize in a battle against terrorism.18 The problem with Fukuyamas assertion is that in many cases, the same citizens and neighboring countries might support these terrorist regimes since they are fighting for a cause (e.g., Jihad, nationalism) that is very real and crucial to their lives. At any rate, whenever a state commits crimes against humanity, it must stopped using means that are less destructive than the crimes themselves. Some experts claim, Fukuyama says, that the Westphalian system [is] no longer an adequate framework for international relations [because it] was built around the deliberate agnosticism over the question of legitimacy.19 One could argue that even though this is to an
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The interesting thing is that even though concrete block or brick houses are unstable in case of an earthquake, locals now like these materials better since they are easier to acquire and houses have a better appearance. 16 Pgs. 92, 93 17 Pg. 93 18 Pg. 95 19 Pg. 97

extent true, there must be some framework and global legal procedure set up so that a legitimate state might not be invaded willy-nilly by another state on dubious groundswhich in reality might be an exercise of hegemonic and imperial ambition. Fukuyama makes the distinction between state-building and nation-building. The former is an organization of institutions that serve the public, while the latter reflects a common historical and cultural identity among the citizens.20 On pages 106 and 107, the author highlights that the US expends much effort on building and promoting trade agreements and multilateral treaties in order to benefit strongly from and indeed dominate the global economy He goes further in saying that Europeans are the same way and that they should not be pointing fingers at the US for being this way. However, what Fukuyama does not make a distinction of is that the US and Europe are economically self-interested in two dissimilar ways. Europe tries to protect its interests and, if possible, expand business (but not primarily to expand business). The US has the primary economic goal of expanding its businesses as much as possible.21 The fact that (US) multinational corporations claim to not have a home22 does not deny the fact that their loyalty is to the US, since this is where they were founded and where they pay most of their taxes and where their owners and larger stockholders reside. Coca-Cola, General Electric, Ford, and Wal-Mart might do business abroad, but their heart beats for the US. At the end, Fukuyama restates that in this post-September 11 world, the biggest challenge is not how to cut back stateness but how to build strong statesfor which his book works as a manual.23 Strong states are vital for international security, and therefore countries should invest time, effort, and resources in helping weak states become strongereven if it
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Pg. 99 Empirical observation of its history 22 which is just a marketing technique to sell themselves to other countries. 23 Pg. 120

involves toppling a democratically-elected, but dangerous, government.24 The art of statebuilding will be a key component of national power, as important as the ability to deploy traditional military force to the maintenance of world order.25

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Toppling a government does not necessitate military involvement from abroad. Letting nationals and neighboring countries influence policy and citizens socio-political conscience in the weak state can suffice. 25 Pg. 121