Pro-poor growth

The role of the state

The extent of the state’s role in economic development continues to be debated. These texts examine the ‘unorthodox’ institutional arrangements that facilitated economic development, particularly in the East Asian economies.

Fukuyama, F., 2004, 'The Missing Dimension of Stateness', in ‘State Building. Governance and World Order in the Twenty-First Century’, Profile Books, London, pp. 1-57
Politics in the twentieth century have been heavily shaped by controversies over the approximate size and strength of the state. This book chapter from John Hopkins University analyses the role of the state in development, in particular, how the terms ‘scope’ and strength’ can advance our understanding of state effectiveness. It argues that there are grave limitations to the ability of external powers to create demand for institutions and therefore to transfer existing knowledge about institutional construction and reform to developing countries. Crucially, policymakers should avoid initiating programs that undermine state capacity in the name of building it.
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Khan, M., 2003, ‘State Failure in Developing Countries and Institutional Reform Strategies’, in Towards Pro-Poor Policies. Aid, Institutions and Globalisation. World Bank ABCDE Conference, eds. B. Tungodden, N. Stern, and I. Kolstad, World Bank and Oxford University Press, Washington/Oxford, pp. 165-195
What is the role of the state in developing economies? This question is fundamental to the debate over the failure of states in transition. New research by London University looks at the arguments and suggests that a shift in the focus of reform is needed as well as political reorganisation in poorly performing economies.
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Governance policies largely assume a ‘service delivery’ model of modern state, where the state is concerned with securing the rule of law, public goods, and some welfarist redistribution. Khan doubts that reforms based on implementing such a model can lead to improved growth. The reforms undertaken by ‘transformational states’, such as those in East Asia, are likely to have a much more positive impact on growth. This suggests the need for a significant shift in the focus of institutional reform.

Harriss, J., 2003, ‘Do Political Regimes Matter? Poverty Reduction and Regime Differences Across India’, in Changing Paths International Development and the New Politics of Inclusion, eds. P. Houtzager and M. Moore, Ann Arbor, University of Michigan, pp. 204-232
Do political factors influence poverty reduction policies in India? This chapter from a book, published by the University of Michigan Press, examines the impact of the different sub-national political regimes of the major Indian states on, firstly, the factors that are instrumental for reducing rural poverty and, secondly, the adoption and financing of pro-poor public policies. This chapter illustrates that politics “does make a difference” for poverty alleviation and that variation in political regimes has a significant impact on poverty reduction policies, expenditure patterns and outcomes in India.
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