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Governance and World Order in the Twenty-first Century

During the twentieth century, many people experimented upon state power. On one hand totalitarian countries dominated the economy, and on the other hand, states started deregulating processes. By the beginning of the 21st century, neoliberalism was the “new thing.”

Who Should Read “State Building”? And Why?

He doesn’t focus on theories of what countries are supposed to do; instead, he advises what they could do, according to his analysis. Furthermore, he explains the supply and demand side for institutions and describes how transparent and efficient organizations can be created.

We live in the twenty-first century where the most prominent challenge is weak states. States still fight with problems such as terrorism, poverty, famine, AIDS, etc. Those could be countries we hear about or states we live in.

This examination of “stateness” is a fascinating read for anyone who wants to understand why the world functions like it currently does.

About Francis Fukuyama

Francis Fukuyama is an author of several books, among which are The End of History and The Last Man. He has written widely on issues relating to questions concerning democratization and international political economy.

He is Olivier Nomellini Senior Fellow at the Freeman Spogli Institute for International Studies (FSI), resident in FSI’s Center on Democracy, Development, and the Rule of Law.

“State Building Summary”

Whatever the governing approach is, two variables define states and the level of development they have achieved: scope and strength.

Scope depends on the nature of the functions a country strives to accomplish. First, there are “minimal processes,” such as law and order, macroeconomic management and public health. Next, there are “intermediate functions,” like environmental protection, antitrust regulation, and education.

And lastly, there are “activist functions” like industrial policies and wealth redistribution. The more countries approach activist functions, their scope expands.  

Strength is an assessment of how effective a country is; it depends on the institutional capacity, which is different for each state. Transparent government administration, low corruption, law enforcement and accountability are all factors that contribute to this variable. An example of stable and strong countries are France, Japan, and the U.S. Turkey or Sierra Leone are the opposite.

Scope and strength are not fixed phenomena: states can move from one strength and scope value on others. Usually, any society, to be able to develop economically, needs to have a limited scope, but significant strength.

Higher stability is directly tied to economic development, while reduced scope, may not be promoting development, without strong institutions at play. Then, you ask, why are strong institutions so rare?

It seems that although transparent and efficient governments are apparently advantageous, citizens don’t ask for them – why is that? Well, at times, businesses operate better in the midst of ineffective and corrupt governance.

Other times, people don’t quite grasp the benefits a steady state can bring them. Historically, exogenous forces were needed to create enough demand out of which some are military, but not all of them need to be.

Outside assistance agencies sometimes push for inside reforms but, such external pushes don’t always fuel change. We may even conclude that such changes very rarely take place. People seem to be more motivated for change and development when faced with tough times.   

On the supply side, it is important to note that designing sound institutions is hard and heavily dependent upon four elements. First, there is the political system design, of which, there is no consensus about which one is best for society.

Second is the basis of legitimization because institutions must be legitimate. The problem lies in the different notions of legitimacy in various groups. Next are the cultural and structural factors. Some cultures don’t always accept outsiders, so there is no clear picture of which institutions would the locals allow.

And last is organizational design and management, about which authors often write, but give little actionable advice.

There is no general rule, so organizational reformers should try to avoid local conditions and use them in their reforms.

They should focus on aspects of the institutions they can alter and systematize, but a fight between cultures mustn’t occur. A new way must be found to work through it and use the local context as a resource working in their favor.

Key Lessons from “State Building”

1.      Unclear Goals
2.      Lack of Accountability
3.      Badly allocated discretion

Unclear goals

The first problem that the public sector faces regarding its organization is vague goals. Organizations don’t always have delegate specific goals the right way. In theory, principals should delegate activities to subordinates which they should execute.

Nonetheless, in reality, organizations rarely function in this manner. Goals and tasks move all over the organizational chart.

Often, organizations give authority to people who are more functionally oriented, instead of hierarchically. These problems are rooted in the past, but no one has solved them yet.

Lack of Accountability

Public organizations do not use profit as a metric for their success.

They put attention to another variable: service outputs. These outputs differ in specificity and transaction volume. Specificity refers to the possibility to measure the output.

Transaction volume, on the other hand, shows the number of processed transactions. Some services, however straightforward they might be, are almost impossible to measure.

Badly Allocated Discretion

Often, organizations should delegate decision making and discretion. The more judgment the task requires, the more of them they should appoint. The problem is that delegating authority is risky.

In government and public organizations, delegating authority to federal officials may bring forth a patronage network. Furthermore, the need and acceptable rate of delegated discretion are different for different cultures. For all these reasons, there is no general rule about how much delegation is enough.

In the end, it all comes down to taking the right action in a specific situation.

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“State Building” Quotes

Our Critical Review

According to Fukuyama, weak states are causing and will continue to create some of the world’s most significant problems. In this text, he presents us with his two-dimensional model to explain where problems lie in most fallen states.