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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

Francis Fukuyama

Johns Hopkins University

School of Advanced International Studies


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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


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Two Dimensions of Stateness

Strength of State Institutions

Scope of State Functions


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Stateness and Efficiency

Quadrant I

Quadrant II

Strength of State Institutions

Quadrant III

Quadrant IV

Scope of State Functions


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The Stateness Matrix

France

Japan

United States

Strength of State Institutions

USSR

Turkey

Brazil

Sierra Leone

Scope of State Functions


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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


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Reform Paths

Path I

Path IV

Strength of State Institutions

Path III

Path II

Scope of State Functions




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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


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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


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Public Sector Outputs

Quadrant I

Quadrant II

Low Specificity High

Quadrant III

Quadrant IV

Low Transaction volume High


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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


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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


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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


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Some Historical Examples

  • Japan: MacArthur’s decision to keep the Emperor

    • versus the clean break in Germany

  • Iraq: disbanding the Iraqi Army


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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


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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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