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State Failure in Developing Countries and Strategies of Institutional Reform”, paper presented at the ABCDE Conference Europe (2002)
| Citations: | 17 - 4 self |
BibTeX
@MISC{Khan02statefailure,
author = {Mushtaq H. Khan and Mushtaq H. Khan},
title = {State Failure in Developing Countries and Strategies of Institutional Reform”, paper presented at the ABCDE Conference Europe},
year = {2002}
}
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Abstract
Abstract: The analysis of state failure and the policy debate have been driven by two very different underlying views of what the state does. The first, which we call the “service-delivery ” view says the role of the state is to provide law and order, stable property rights, key public goods and welfarist redistributions. In failing to provide these, state failure contributes to economic under-performance and poverty. State failure of this type is in turn related to an inter-dependent constellation of governance failures including corruption and rent-seeking, distortions in markets and the absence of democracy. All of these need to be addressed to focus the state on its core service-delivery tasks. The second locates the developing country state in the context of “social transformation”: the dramatic transition these countries are going through as traditional production systems collapse and a capitalist economy begins to emerge. Dynamic transformation states have heavily intervened in property rights and devised rent-management systems to accelerate the capitalist transition and the acquisition of new technologies. State failure according to this view has been driven by the lack of institutional capacities in these respects, and more importantly, the incompatibility of institutional capacities with pre-existing distributions of power. An examination of the econometric data and historical evidence raises serious doubts as to whether the governance reforms suggested by the first view can improve growth, while the need for reforms identified by the second view are much better supported. This suggests the need for a significant shift in the focus of institutional reform, as well as identifying the importance of political reorganization in poorly performing economies.
Keyphrases
state failure institutional reform abcde conference europe institutional capacity dramatic transition service-delivery view core service-delivery task historical evidence social transformation country state capitalist economy governance reform welfarist redistribution new technology capitalist transition policy debate economic under-performance political reorganization rent-management system first view significant shift key public good econometric data stable property right governance failure inter-dependent constellation second view pre-existing distribution dynamic transformation state traditional production system collapse serious doubt property right
