Chapter 5 - State-building in fragile contexts

State-building models and prioritisation and sequencing

Introduction

State-building has recently been adopted as the central objective of international engagement in fragile situations. The growing prominence of state-building on the international development agenda in part stems from the realisation that the MDGs are unlikely to be achieved in fragile situations without the establishment of both a basic level of security and a functioning state.

State-building is broadly understood as an ongoing, long-term, and endogenous process of establishing and/or developing effective and legitimate state institutions and state-society relations. The OECD-DAC defines state-building as: ‘purposeful action to develop the capacity, institutions and legitimacy of the state in relation to an effective political process for negotiating the mutual demands between state and societal groups’ (OECD-DAC, 2008). Central to this understanding is the critical importance of positive state-society bargaining underpinning the formation of the social contract.

International donors are increasingly applying a state-building lens to analysing and addressing fragility. But the idea of state-building as a framework for development assistance remains controversial. Many caution that international actors can and should only have limited influence in endogenous processes of state formation. Critics of international engagement argue that state-building is undertaken with the underlying aim of transferring institutional models based on an ideal type of well-functioning state, and that this offers little room for alternative models of statehood.

State-building and peace-building

Statebuilding and peacebuilding are conceptually distinct, with complementarities, trade-offs and tensions between the two. The need for international agencies to adopt an integrated approach to statebuilding and peacebuilding in fragile, conflict-affected states is increasingly recognised in academic and policy circles. The following two supplements explore this development:

• Statebuilding and Peacebuilding in Situations of Conflict and Fragility (PDF) looks at the links (and tensions) between statebuilding and peacebuilding, how these activities interact, and how they can be approached in practice.
• State-Society Relations and Citizenship in Situations of Conflict and Fragility (PDF) looks at concepts of state-society relations, civic trust, citizenship and socio-political cohesion in relation to statebuilding and peacebuilding.

State-building models

For the most part, the model of state-building promoted by the international community has entailed three main prongs: supporting the legitimacy and accountability of states through democratic governance (holding elections and constitutional processes); economic liberalisation/marketisation; and strengthening the capacity of states to fulfil their core functions in order to reduce poverty, including through strengthening and transforming institutions.

Further resources on institutional strengthening are available in the institutional development guide.

OECD-DAC, 2008, ‘State-building in Situations of Fragility: Initial findings’, OECD, Paris
What is the nature of state-building in the context of fragile states and situations? This paper summarises the findings of discussions between OECD-DAC members initiated to deepen the international community’s knowledge and understanding of the concept of state-building. It concludes that state-building in fragile contexts is an endogenous process driven by state-society relations which, in spite of its links with other kinds of economic and political development, is a distinct and necessary process for long-term state legitimacy and effectiveness.
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OECD-DAC, 2011, 'Supporting Statebuilding in Situations of Fragility and Conflict: Policy Guidance', DAC Guidelines and Reference Series, OECD, Paris
How should the international community support state-building in fragile and conflict-affected situations? This report argues that state-building is an endogenous process rooted in state-society relations and the politics of the particular context. Critical aspects of state-building are: the political settlement; the capability and responsiveness of the state to fulfil its principal functions; social expectations of the state and civil society's ability to articulate demands; and – at the nexus of these three dimensions – sources of legitimacy. Due to the complex and unpredictable nature of fragile situations, donors need to recognise the limitations of external support and adapt their methods and operational frameworks to allow for flexible engagement.
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Whaites A., 2008, 'States in Development: Understanding State-building', Department for International Development, London
Why do some states manage state-building better than others? How can development actors support positive state-building? This paper argues that improved understanding of state-building can increase the impact of aid, while lack of understanding reduces its benefits. Two conceptual frameworks, or models, for state-building dynamics are evident: The first is a model of how state-building can work to produce capable, accountable and responsive states – namely responsive state-building. The second is a model of unresponsive state-building – a set of dynamics likely to lead to states affected by problems such as endemic rent-seeking or political repression.  The models are based on three elements – political settlements; survival functions; and expected functions.
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World Bank, 2011, 'From Violence to Resilience: Restoring Confidence and Transforming Institutions', in World Development Report 2011: Conflict, Security and Development, World Bank, New York, ch.3
How can countries escape the vicious cycle of fragility and move towards a virtuous cycle of confidence building and institutional transformation? This chapter sets out a framework that involves: 1) restoring confidence; 2) early attention to the reform of institutions that provide citizen security, justice and jobs; 3) reform approaches that allow for flexibility and innovation; and 4) marshalling external support and resisting external stresses. This endogenous spiral of confidence building and institutional transformation should be continually expanded. It must also be adapted to context. Outsiders can help by reducing external stresses as well as providing support.
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Anten L., Briscoe I. and Mezzera M., 2012, 'The Political Economy of State-building in Situations of Fragility and Conflict: from Analysis to Strategy', Clingendael - Netherlands Institute of International Relations, The Hague
This synthesis paper draws on studies of Afghanistan, Democratic Republic of Congo, Guatemala, Kosovo and Pakistan. It highlights the 'political marketplace' in which power-holders compete and collude. Donors need to be constantly sensitive to the shifting structures of power, interests and incentives that may capture and subvert new formal governance arrangements. They must ensure that a shared strategy aimed at building a common-interest state is created, and provide sufficient resources for this while avoiding contingency-led decisions. They need to withstand fierce political competition and rapidly changing alliances by supporting constitution-building processes, political party development and participatory public debates. And they need to support service delivery and official accountability while understanding that a grassroots-level, bottom-up approach, too small-scale to be attractive for the interference of larger players, may do least harm and be more effective.
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Some argue that there may be tensions embedded in the international state-building model in the sense that the three elements (as outlined in the DFID discussion paper and emerging policy paper) may not always be mutually reinforcing, or may be undermined by political economy factors. There is also some divergence of opinion about whether state-building is necessarily a development activity. Some argue that resilient states do not necessarily preside over economic growth and poverty reduction (many encounter so-called ‘resilient stagnation’). Conversely, what allows states to preside over economic growth may not necessarily be the same as what is required for responsive state-building.

Fritz, V. and Rocha Menocal, A., 2007, 'Understanding State-Building from a Political Economy Perspective', Overseas Development Institute (ODI), London
This paper seeks to contribute to a more conceptually informed understanding of state-building, adopting a political economy perspective. In addition, the paper suggests that donors face (at least) three significant challenges in their engagement with state-building. These include political economy challenges, such as corruption and neo-patrimonialism; a knowledge gap about what works in providing external support for various state-building domains; and tensions embedded in the state-building model that the international community is currently pursuing.
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Crisis States Research Centre, 2008, ‘Development as State Making’, CSRC Brief, London School of Economics (LSE), London
This brief discusses the key findings of the CSRC’s research stream on state-building. A key finding is that what accounts for state resilience may not be the same as what allows states to preside over economic growth and poverty reduction. The difference between fragile and resilient states is a function of elite bargains, coalitional politics, security and production. State resilience seems to depend on the inclusiveness of bargains struck among elites and the extent to which state organisations have established their presence throughout a country’s territory. There may be trade-offs at any given time between securing peace and promoting positive programmes for economic growth and welfare.
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An alternative ‘developmental states’ model of state-building questions the focus on the development of democratic institutions and good governance as necessary for poverty reduction, suggesting that economic transformation and elite consensus are the more critical elements of state-building. But the relevance and applicability of the developmental state model to fragile situations is highly controversial.

Barbara, J, 2008, 'Rethinking neo-liberal state building: building post-conflict development states', Development in Practice, vol.18, no. 3,pp. 307-318
In attempting to rebuild post-conflict failed states, the international community has drawn heavily on neo-liberal development paradigms. However, neo-liberal state-building has proved ineffectual in stimulating economic development in post-conflict states, thus undermining prospects for state consolidation. This article offers the developmental state as an alternative model for international state-building, better suited to overcoming the developmental challenges that face post-conflict states. Drawing on the East Asian experience, developmental state-building would seek to build state capacity to intervene in the economy to guide development, compensating for the failure of growth led by the private sector to materialise in many post-conflict states.
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Briscoe I., 2008, 'Can Fragile States Learn from the Development Tigers?', Fundación para las Relaciones Internacionales y el Diálogo Exterior (FRIDE), Madrid 
Can the developmental success of East Asian countries be used as a road map for low-income economies run by weak states? According to this paper, the national and historical context of fragile states means that it is difficult to export the experience of states like South Korea or Taiwan. However, there are important lessons to be learned. Active state intervention, strategic economic policies and a hands-off approach by the international community are all crucial components in kick-starting fast economic growth.
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Helling, D., 2009, 'Anatomy of a 'Political Chameleon': Re-examining Fluid Shapes and Solid Constants of Nationalism and Nation Building', Crisis States Research Centre Discussion Paper No. 17 (Series 2), London School of Economics and Political Science, London
This paper argues for ‘nation building’, in addition to ‘capacity building and ‘institutional reform’, to better understand projects of peace building, post-conflict reconstruction and state formation. Nation building processes are best understood through language, history and other knowledge systems that become critical to identity formation and cohesive social development within specific geographic areas. The state is the key driver of these processes, with outcomes determined largely by the role and actions of elites.
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Lun, M. T., 2009, ‘Reconnecting Joined-up Approaches: Nation-building Through State-building’, Overseas Development Institute, London
How can sustainable peace be built in fragile states? This study shows that while donors have largely focused on state-building, stability requires a deeper process of nation-building. External actors are restricted to using state-building as a means of enabling nation-building. They can assist in the establishment of rule of law, create a fertile investment climate for economic regeneration and agree an exit strategy. However, only the partner country can take the active lead role in nation-building.
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Lindemann, S., 2011, 'Inclusive Elite Bargains and the Dilemma of Unproductive Peace: a Zambian case study', Third World Quarterly, vol.32, no.10, pp.1843-1869
This paper offers a theoretical framework of elite bargains and draws on the case of Zambia to show that the priorities of peacebuilding can conflict with those of economic development. In Zambia, elite bargains have helped to avoid civil war but they have also constrained the economy, resulting in an unproductive peace. The study argues that while inclusive power structures are indispensable for preserving peace and stability, it is important to recognise that a trade-off might be needed between power-sharing and economic development.
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Another important stream of research contrasts the experience of developed countries or ‘open access orders’, with developing countries or ‘limited access orders’ (North et al 2007).  While open access orders are characterised by government monopoly of violence and free economic and political competition, power in limited access orders is divided amongst elites.  North et al (2007) argue that applying unmodified institutional forms or mechanisms that exist in open access orders (such as property rights or democratic governance) can be destabilising and may risk generating violence.

North, D. et al, 2007, 'Limited Access Orders in the Developing World: A New Approach to the Problems of Development', Policy Research working paper, WPS 4359, World Bank, Washington D.C. 
Why do existing development approaches based on transfer of western social and political dynamics to non-western countries often fail? This paper proposes a conceptual model of developed countries, or open access orders (OAOs) and developing countries, or limited access orders (LAOs). OAOs organise themselves around competition and a government monopoly over violence. Since they do not have a secure state monopoly on violence, LAOs organise themselves to control violence among elite factions which divide the country’s economy among themselves. Development reforms will fail if they attempt to create OAOs in societies ill-prepared for such fundamental change in their social and political dynamics.
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Prioritisation and sequencing issues

An appropriate prioritisation and sequencing of state-building processes and functions is seen as important in low capacity contexts where there are likely to be limited resources and therefore a need for high levels of (donor) co-ordination. One key debate concerns whether a certain level of security is required prior to the establishment of democratic institutions. The OECD-DAC contends that the first priority in state building should be a form of political governance through which state and society can reconcile their expectations of one another, which determines whether security is provided in a way that meets the needs of citizens (OECD-DAC, 2008).

OECD-DAC., 2008, 'From Fragility to Resilience: Concepts and Dilemmas of Statebuilding in Fragile States', Report prepared by the Center on International Cooperation at New York University and International Peace Academy, New York 
This paper sees state-building as an internal political process of state-society bargaining. Donors therefore need to focus first and foremost on political governance. This includes the local political processes that create public institutions and generate their legitimacy in the eyes of a state's population. Fragility arises primarily from weaknesses in the dynamic political process through which citizens’ expectations of the state and state expectations of citizens are reconciled and brought into equilibrium with the state’s capacity to deliver services. Disequilibrium can arise as a result of extremes of incapacity, elite behaviour, or crises of legitimacy. It can arise through shocks or chronic erosion, and be driven alternately by internal and external factors. Resilient states are able to manage these pressures through a political process that is responsive, adjusting the social contract.
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Paris, R., 2004, 'Introduction', in At War's End: Building Peace After Civil Conflict, Cambridge University Press, pp.1-10.
What is the relationship between liberalisation, institution building and peace in countries that are just emerging from civil conflict? This book examines post-conflict operations between 1989 and 1999. Its introductory chapter outlines the author's argument that while peace-builders should preserve the broad goal of converting war-shattered states into liberal market democracies, peace-building strategies need to build effective institutions before liberalisation takes place.
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Bratton, M. and Chang, E., 2006, ‘State Building and Democratization in Sub-Saharan Africa: Forwards, Backwards, or Together?’, Comparative Political Studies, vol. 39, no. 9, pp 1059-1080
Is democracy feasible in sub-Saharan Africa? Which aspects of state-building are most important? This research shows that new democracies emerge only in the context of effective states. The scope of state infrastructure and the delivery of welfare services have little impact on democratisation. But the establishment of a rule of law is critical to building democracy. Because the legitimacy of the state is itself a reciprocal product of democratisation, African states and African regimes should be understood together.
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Hesselbein, G., Golooba-Mutebi, F. and Putzel, J., 2006, ‘Economic and Political Foundations of State Making in Africa: Understanding State Reconstruction’, Crisis States Research Centre Working Paper, Series 2, no. 3., London School of Economics (LSE), London
How can the process of state reconstruction be understood? This paper examines state reconstruction in Uganda, Rwanda and the Democratic Republic of Congo in light of Tanzania’s experience of establishing a stable state. Overall, it argues that a ‘state in the making’ lies somewhere between ‘traditional’ forms of organisation and the modern state and formal economy. Its conclusions cast doubt on the idea that state-making is best pursued through modern liberal democracy.
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Further resources on the timing of elections in post-conflict and fragile situations is available in the political systems guide.

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