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State-Building: The Missing Dimensions of Stateness

State-Building: The Missing Dimensions of Stateness. Francis Fukuyama Johns Hopkins University School of Advanced International Studies. The Scope of State Functions.

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State-Building: The Missing Dimensions of Stateness

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  1. State-Building:The Missing Dimensions of Stateness Francis Fukuyama Johns Hopkins University School of Advanced International Studies

  2. The Scope of State Functions Addressing externalities Education, environmentRegulating MonopolyOvercoming imperfect education Insurance, financial regulationSocial Insurance Providing pure public goods Defense, Law and order Property rights Macroeconomic management Public healthImproving equity Protecting the poor Intermediate Functions Industrial policyWealth redistribution Minimal Functions Activist Functions X-axis

  3. Two Dimensions of Stateness Strength of State Institutions Scope of State Functions

  4. Stateness and Efficiency Quadrant I Quadrant II Strength of State Institutions Quadrant III Quadrant IV Scope of State Functions

  5. The Stateness Matrix France Japan United States Strength of State Institutions USSR Turkey Brazil Sierra Leone Scope of State Functions

  6. Change over Time New Zealand 1995 USSR 1980 Strength of State Institutions New Zealand 1981 China 2000 China 1978 Russia 2000 Scope of State Functions

  7. Reform Paths Path I Path IV Strength of State Institutions Path III Path II Scope of State Functions

  8. Tax Extraction Rates v. Per Capita GDP

  9. Components of Institutional Capacity

  10. Weak States and the Black Hole of Public Administration • Central issue of all organizational theory is delegated discretion • Underlying issue in socialism debate (Hayek), corporate structure (Chandler), federalism • Contemporary approach brings this under a principal-agent framework

  11. Domains of Organizational Uncertainty • Ambiguity of goals • Impossibility of erecting formal system of monitoring and incentives • Inability to determine appropriate degree of delegation ex ante

  12. Public Sector Outputs Quadrant I Quadrant II Low Specificity High Quadrant III Quadrant IV Low Transaction volume High

  13. Monitorability of Public Sector Outputs Aircraft maintenance Telecoms Central banking Railroads Highway maintenance Low Specificity High Foreign affairs Court systems Primary school teaching University education Preventative medicine Guidance counseling Low Transaction volume High

  14. Consequences of Organizational Ambiguity • Need to understand better where different public sector activities fall in the matrix • Seek to fix problems that are actually solvable • New approaches to activities for which there are no “best practices” • Need to teach development differently

  15. What follows if public administration is not a science? • Need for metis (Scott) • Does not necessarily imply leaving local institutions in place • Requires rather contextual judgment about applicability of foreign models • Need to think about the structure of decision-making rather than content of decisions

  16. Some Historical Examples • Japan: MacArthur’s decision to keep the Emperor • versus the clean break in Germany • Iraq: disbanding the Iraqi Army

  17. Making Things Worse • IFIs and donor community complicit in destruction of institutional capacity • Contradiction between objectives of capacity-building and provision of services • Need to rethink aims and emphasis of Phase II nation-building

  18. Application to Failed States • Inevitable conflict between need to provide governance and early local ownership • Recent cases of “authoritarian state building” • High representative in Bosnia, CPA in Iraq • Need to tolerate loss of control in the interests of local buy-in

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