In political science, state-building as a term used in state theory describes the construction of a functioning state. The term first entered academic debate in the context of Charles Tilly's influential work on the origins of states (1975: 70f.):
"State building provided for the emergence of specialized personnel, control over consolidated territory, loyalty, and durability, permanent institutions with a centralized and autonomous state that held the monopoly of violence over a given population".
State-building now more commonly refers to the construction or reform of governmental institutions by external actors in "failed" or "fragile" states. This further includes reforms of state-society relations with the objective of strengthening state resilience. The OECD identifies three critical aspects:
- The political settlement, which reflects the implicit or explicit agreement (among elites principally) on the “rules of the game”, power distribution and the political processes through which state and society are connected.
- The capability and responsiveness of the state to effectively fulfil its principal functions and provide key services.
- Broad social expectations and perceptions about what the state should do, what the terms of the state-society relationships should be, and the ability of society to articulate demands that are “heard.”
Significant debate persists with regard to the effectiveness and legitimacy of external actors' involvement in this process, particularly in the context of the US interventions in Afghanistan and Iraq.
- 1 Definition
- 2 Application of Predatory Theory to State Building
- 3 Differentiating "nation-building", military intervention, regime change
- 4 Peace Building versus State Building
- 5 Market-Oriented Aid
- 6 State structures within the concept of state-building
- 7 Approaches to State Building
- 8 Examples of state-building
- 9 See also
- 10 Literature
- 11 References
There are two main theoretical approaches to definitions of state-building. First, state-building is seen by some theorists as an activity undertaken by external actors (foreign countries) attempting to build, or re-build, the institutions of a weaker, post-conflict or failing state. This 'exogenous' or International Relations school views state-building as the activity of one country in relation to another, usually following some form of intervention (such as a UN peacekeeping operation).
The second, developmental, theory followed a set of principles developed by the OECD in 2007 on support to conflict affected states which identified `statebuilding' as an area for development assistance. The result saw work commissioned by donor countries on definitions, knowledge and practice in state-building,this work has tended to draw heavily on political science. It has produced definitions that view state-building as an indigenous, national process driven by state-society relations. This view believes that countries cannot do state-building outside their own borders, they can only influence, support or hinder such processes. Illustrations of this approach include a think-piece commissioned for OECD  and a research study produced by the Overseas Development Institute.
The developmental view was expressed in a number of papers commissioned by development agencies . These papers tend to argue that state-building is primarily a `political' process rather than just a question of technical capacity enhancements and sees state-building as involving a threefold dynamic of: political (usually elite) deals, the prioritization of core government functions and the willingness to respond to public expectations. A further important influence on thinking on states affected by conflict was the World Bank's 2011 World Development Report, which avoided the language of state-building while addressing some related themes.
Across the two streams of theory and writing there is a broader consensus that lessons on how to support state-building processes have not yet been fully learnt. Some believe that supporting state-building requires the fostering of legitimate and sustainable state institutions, but many accept that strategies to achieve this have not yet been fully developed. Little of the post-conflict support to state-building undertaken so far has been entirely successful. From an exogenous perspective it can be argued that sustained focus on supporting state-building has tended to happen in states frequently characterized by brutalized civilian populations, destroyed economies, institutions, infrastructure, and environments, widely accessible small arms, large numbers of disgruntled soldiers to be demobilized and reintegrated, and ethnically or religiously divided peoples. These obstacles are compounded by the fundamental difficulty of grafting democratic and human rights values onto countries with different political, cultural, and religious heritages. Pluralizing societies is theoretical in its viability for immediate political and economic stability and expediency; ideological overtones can be met with opposition within host nations and issues of self-determination and external state trusteeship and stewarding of nascent institutional reform, or its creation, could negatively impact a tenuous post conflict national self- identity (for critical analyses of neotrusteeship, see e.g. Ford & Oppenheim, 2012).
Both schools of thinking have generated critiques and studies seeking to test the propositions made. A more developmental approach with an emphasis on composite state-building processes, would have implications for donor programmes, diplomacy and peace-keeping. Some research has tried to test some of the ideas involved and at least one donor agency issued a guidance note for its own programmes. Important critiques were developed by NGOs such as Conciliation Resources and The Asia Foundation, focused primarily on Whaites proposition that a `political settlement' drives state-building. There have also been attempts to test out the thesis by looking at individual areas of state provision, particularly the area of healthcare. Further research on state society relations has also been undertaken by groups including the Secure Livelihoods Research Consortium and the Crisis States Research Centre.
While some development papers have tried to argue that state-building takes place in all countries and that much can be learnt from successful state-building there is a tendency to narrow the discussion to the most problematic contexts. As a result much of the literature on state-building is preoccupied with post conflict issues. See e.g. (Dahrendorf, 2003), (The Commission on Post-Conflict Reconstruction, 2003), (Collier, 2003) (Fukuyama, 2004), (Paris, 2004), (Samuels 2005). Critiques common to both schools include inadequate strategy and a lack of coordination, staffing weaknesses, and that funding is insufficient or poorly timed. Moreover, it is increasingly recognized that many of the tasks sought to be achieved are extremely complex and there is little clarity on how to best proceed. For instance, it is extremely difficult to provide security in a conflictual environment, or to disarm, demobilize and reintegrate armies successfully. It remains practically impossible to address vast unemployment in states where the economy is destroyed and there is high illiteracy, or to strengthen the rule of law in a society where it has collapsed. Moreover, the unintended negative consequences of international aid are more and more evident. These range from distortion of the economy to skewing relationship of accountability by the political elite towards internationals rather than domestic population.
The United Nations Research Institute for Social Development (UNRISD) determined that basic state capacities are to
i. Assist in the acquisition of new technologies
ii. Mobilize and channel resources to productive sectors
iii. Enforce standards and regulations
iv. Establish social pacts
v. Fund deliver and regulate services and social programmes 
States must be able to create the
1. Political Capacity to address the extent to which the necessary coalitions or political settlements can be built
2. Resource Mobilization Capacity to generate resources for investment and social development
3. Allocate Resources To Productive And Welfare-Enhancing Sectors 
When developing this infrastructure a state can meet several roadblocks including policy capture from powerful segments of the population, opposition from interest groups, and ethnic and religious division. Developing countries have tried to implement different forms of government established in advanced democracies. However, these initiatives have not been fully successful. Scholars have looked back at the development of Europe to determine the key factors that helped create bureaucracies that were sustainable throughout the centuries.
Application of Predatory Theory to State Building
When studying the development of European states, Charles Tilly identified that European countries engaged in four activities:
- war making - eliminating or neutralizing their own rivals
- state making - eliminating or neutralizing their rivals inside their own territory
- protection - eliminating or neutralizing the enemies of their clients
- extraction - acquiring the means of carrying out the first three activities.
Out of these four activities, war making was the main stimulus to increasing the level of taxation, thus increasing the capacity of the state to extract resources. The increased capacity of the state to extract taxes from its citizens while facing external threats prompted Jeffrey I. Herbst to propose that allowing failed states to dissolve or engage in war to re-create the process endured by European countries. The process of extraction in exchange for protection was further argued by economic historian Frederic Lane. Lane argued that "governments are in the business of selling protection ... whether people want it or not." Furthermore, Lane argued that a monopoly was best equipped to produce and control violence. This, he argued, was due to the fact that competition within a monopoly raised costs, and that producing violence renders larger economies of scale.  Although the logic was consistent with the predatory theory of the state in early modern Europe, Herbst’s point of view was criticized by several scholars including Richard Joseph who were concerned that the application of predatory theory was an excessive approach of Darwinism. Many have disregarded the limited view of this theory and have instead extended it to include strong external threats of any kind. External threats to the state produce stronger institutional capacities to extract resources from the state.
In harnessing this increased capacity, Centeno describes the state as a machine that requires a “driver” that is able to use the increased capacity to expand influence and power of government. The driver can be state personnel, a dominant class, or a charismatic individual. Without these drivers, the political and military machine of the state has no direction to follow and therefore, without this direction, war and the increased resources extracted from war can not be used for growth. On the other hand, internal wars, i.e. civil wars, have a negative effect on extraction of a state. Internal rivals to the state decrease the state’s capacity to unify and extract from its citizens. Rivals usually will bargain with the state to lower their tax burden, gain economic or political privileges.
Differentiating "nation-building", military intervention, regime change
Some commentators have used the term "nation-building" interchangeably with "state-building" (e.g. Rand report on America's role in nation-building). However, in both major schools of theory the state is the focus of thinking rather than the "nation" (nation conventionally refers to the population itself, as united by identity history, culture and language). The issues debated related to the structures of the state (and its relationship to society) and as result state-building is the more broadly accepted term. In political science 'nation-building' usually has a quite distinct meaning, defined as the process of encouraging a sense of national identity within a given group of people, a definition that relates more to socialisation than state capacity (see the ODI, OECD, and DFID reports cited above).
Similarly, state-building (nation-building) has at times been conflated with military intervention or regime change. This derives in part from the military actions in Germany and Japan in World War II and resulting states, and became especially prevalent following the military interventions in Afghanistan (October 2001) and Iraq (March 2003). However, the conflation of these two concepts has been highly controversial, and has been used by opposing ideological and political forces to attempt to justify, or reject as an illegal military occupation, the actions in Iraq and Afghanistan. Hence, regime change by outside intervention should be differentiated from state-building.
Peace Building versus State Building
State building does not automatically guarantee peace building, a term denoting actions that identify and support structures that strengthen and solidify peace in order to prevent a relapse into conflict. Whilst they have traditionally been considered two individual concepts with a complex relationship giving rise to dilemmas and necessitating trade-offs, as Grävingholt, Gänzle and Ziaja argue, the two actually representative two diverging perspectives on the same issue: a shaky social peace and a breakdown of political order. Whilst the OECD emphasises that peace-building and state-building are not the same, it does recognise the nexus between them and the re-inforcement of one component has on the other: 'peace-building is primarily associated with post-conflict environments, and state-building is likely to be a central element of it in order to institutionalise peace'. Paris' model including the peace-building and state-building is one of the better known ones. He advocates an Internationalisation Before Liberalisation (IBL) approach, arguing that peace-building must be geared towards building liberal and effective states, thus ‘avoiding the pathologies of liberalization, while placing war-shattered states on a long-term path to democracy and market-oriented economics’.
Despite the advantages of incorporating peace-building and state-building in the same model, applicational limitations should be recognised. In practice, foreign and security policy making still largely treat them as separate issues. Moreover, academics often approach the subjects from different angles. Heathershaw and Lambach caution that in practice, interventions that attempt the ambitious goals that Paris (amongst others) sets out may be coercive and driven by a 'the end justifies the means' outlook. This concern is acute in United Nations peacekeeping missions for there have been instances where peace-builders aspire not only to go a step further and eradicate the causes of violence, which are often-times not agree upon by the parties to the conflict, but also to invest 'post-conflict societies with various qualities, including democracy in order to reduce the tendency toward arbitrary power and give voice to all segments of society; the rule of law in order to reduce human rights violations; a market economy free from corruption in order to discourage individuals from believing that the surest path to fortune is by capturing the state; conflict management tools; and a culture of tolerance and respect'. Such ambitious goals are questionable when the United Nations has been seen to struggle in high-profile conflict-ridden situations such as Darfur and the Democratic Republic of the Congo. Where it has accomplished a degree of stability such as in Haiti and Liberia, it endures pressure 'to transition from heavy and costly security-oriented peacekeeping operations to lighter, peace-building-oriented missions'. Introducing state-building to mandates is controversial not only because this would entail extra costs and commitments but also because 'the expansion of peacekeeping into these areas has de facto extended the authority of the Security Council, with political, financial, institutional, and bureaucratic implications that have yet to be fully addressed'.
In fact, due to the inherently political nature of state building, interventions to build the state can hinder peace, increasing group tensions and sparking off further conflict. The strength of the consensus that has emerged stressing that 'a minimally functioning state is essential to maintain peace', ignores the complications that poor legitimacy and inclusion can lead to in the future, undermining the whole process. For instance, while the Guatemala Peace Accords were considered successful, 'the formal substance of these agreements has not altered power structures that have been in place for decades (if not centuries) in any substantial manner. The underlying (informal) understanding among elites – that their privileges and hold on power are not to be touched – appears to remain'.Therefore while the Accords may be deemed successful because they prevented the outbreak of war, this 'success' was tainted by the implications made by a subsequent report published by the Commission of Historical Clarification in February 1999. In it 'particular institutions were singled out as responsible for extensive human rights abuses. State institutions were attributed responsibility for 93% of these, and the guerrilla forces 3%. In unexpectedly strong language, the report described Guatemalan governmental policy at the height of the war as a policy of genocide'. The reinforcement of these state institutions as part of the peace-building process taints it by association.
Efforts to "appease" or 'buy off' certain interest groups in the interest of peace may undermine state-building exercises, as may power sharing exercises that could favour the establishment of a political settlement over effective state institutions. Such political settlements could also enshrine power and authority with certain factions within the military, allowing them to carve up state resources to the detriment of state building exercises.
Sometimes peace building efforts bypass the state in an effort bring peace and development more quickly, for example, it was found that many NGOs in the Democratic Republic of Congo were building schools without involving the state. The state also may be part of the problem and over-reliance on the state by international actors can worsen security inside the country.
Conversely, state corruption can mean that state building efforts serve only one ethnic, religious or other minority group, exacerbating tensions that could escalate towards violence. State building can also assist predatory states to strengthen their institutions, reinforcing abusive authority and further fueling grievances and popular resistance.
In practice, however, there remains confusion over the differences between state building and peace building. The UN's High-Level Panel on Threats, Challenges and Change stated that "along with establishing security, the core task of peace building is to build effective public institutions that, through negotiations with civil society, can establish a consensual framework for governance with the rule of law". Additionally, a 2004 UN study found that a number of UN officials felt that the establishment of effective and legitimate state institutions was a key indicator of a successful peace operation.
Aid is an important part to the development dialogue. In the 1980s and 1990s due to a series of economic crises and unsuccessful attempts in intervention programs in Africa, Latin America, and Eastern Europe, the international community shifted towards a market-oriented model of foreign aid. Donor countries believed that a reduction in the size and the reach of the state could provide a more efficient outcome. However, the success of East Asia, East Europe, Brazil, and India has demonstrated that even-market economies require a capable state to grow sustainably. Moreover, international donors became concerned over seriously malfunctioning states in the 1990s, i.e. Sierra Leone and Afghanistan. Thirdly, the international community has recognized the importance of states establishing social service programs that will meet the basic needs of their populations, including public health and anti-poverty programs. Moreover, the international community has tried to address the fragmentation of the international aid system that can at times be part of the problem in building state capacity.
State structures within the concept of state-building
The term "state" can be used to mean both a geographic sovereign political entity with a permanent population, a defined territory, a government, and the capacity to enter into relations with the other states, as defined under international law (Montevideo Convention on the Rights and Duties of States, December 26, 1933, Article 1), as well as a set of social institutions claiming a monopoly of the legitimate use of force within a given territory (Max Weber, 1919).
For the purposes of state-building in environments of instability, the sub-structures of states can be defined as a political regime (or system of government), a governance framework (or constitution), and a set of state institutions (or organizations) such as the armed forces, the parliament, and the justice system. State capacity refers to the strength and capability of the state institutions. Nation conventionally refers to the population itself, as united by identity, history, culture and language.
Governments that have implemented the top-down method present the idea that there is a great external threat that can diminish the capabilities of a state and its citizens. The perceived threat creates an incentive that focuses policy, make elites cooperate, and facilitates the adoption of a nationalistic ideology. In an authoritarian government, political, military, and ideological power is concentrated to be conducive to policy continuation. The bureaucracies implemented are well trained, well paid, and highly competitive in recruitment and promotion. Economically successful states in East Asia have taken on programs to create infrastructure, subsidize the farming sector, provide credit, support spending on targeted research, and invest in health and education. However, most governments are non-developmental and unstable. Furthermore, even when countries have tried to pursue authoritarian strategies that have worked, specifically Brazil, a divided military, regional oligarchs in power, and vast disparities in inequality delegitimized the regime.
A democratic regime engages citizens more actively than a top-down government. It respects the right of citizen to contest policies. Successful democracies developed political capacities by nurturing active citizenship, maintaining electoral competitiveness that gave value to the votes of the poor, fostered political parties that were strongly oriented towards equality, and had strong party-social movement ties.
Approaches to State Building
While many specific techniques exist for creating a successful state building strategy, three specific approaches have been identified by the recent 2010 UNRISD report. These three approaches would all fall under the endogenous school of thinking, and are: Good Governance, New Public Management, and Decentralization.
Good governance is a very broadly used term for successful ways a government can create public institutions that protect people’s rights. There has been a shift in good governance ideals, and as Kahn  states, “The dominant ‘good governance’ paradigm identifies a series of capabilities that, it argues are necessary governance capabilities for a market-friendly state. These include, in particular, the capabilities to protect stable property rights, enforce the rule of law, effectively implement anti-corruption policies and achieve government accountability.” This good governance paradigm is a market enhancing process which emerged in the 1990s. This approach involves enforcing the rule of law, creating stronger property rights, and reducing corruption. By focusing on improving these three traits, a country can improve its market efficiency. There is a theoretical cycle of market failure  which explains how a lack of property rights and strong corruption, among other problems, leads to market failure:
- The cycle starts with economic stagnation, which can enhance and expose the inefficiencies of a weak government and rule of law that cannot effectively respond to the problem.
- Because a government is unaccountable or weak, small interest groups can use the government for their specific interests, resulting in rent seeking and corruption.
- Corruption and rent seeking from interest groups will lead to weak property rights that prevent citizens and smaller businesses from the assurance that their property is safe under national law. Also the corruption will result in welfare-reducing interventions.
- These weak property rights and welfare-reducing interventions lead to high transaction cost markets.
- High transaction cost markets lead back to economic stagnation.
While it is understood that improving rule of law and reducing corruption are important methods to increasing the stability and legitimacy of a government, it is not certain whether this approach is a good basis for a state building approach. Researchers  have looked at this approach by measuring property rights, regulatory quality, corruption, and voice and accountability. There was little correlation found between increasing property rights and growth rates per capita GDP.
New Public Management
In response to the unsuccessful attempts to strengthen government administrations, developing countries began to adopt market-oriented managerial reforms under the pressure of the IMF and the World Bank. New Public Management approach first emerged in New Zealand and the United Kingdom in the 1980s. New Public management uses market like reforms within the public sector to provide the government with the necessary power to implement a development plan on the economy while also using competitive market-based techniques to enhance public sector production. It changed public sector employment practices from career tenure positions towards limited-term contracts for senior staff, locally determined pay, and performance-related pay. Secondly, the provision of government services shifted towards contracts, franchising, vouchers, and user charges in an effort to promote efficiency in service provision to citizens.
In this type of government, large bureaucracies within a ministry (the principal) no longer maintain their hierarchical structure but rather are composed of operational arms of ministries that perform the role of an individual agent. The strategy has been more prominent in liberal market-driven policy regimes like New Zealand, United Kingdom, and the United States. Continental Europe has been more resistant to implementing this type of policy. In developing countries, the implementation of these types of infrastructure has been difficult because the markets for the delivery of services are imperfect and increase the danger of regulatory capture by companies. For successful implementation, governments must have the infrastructure to measure reliable performance indicators and the capacity to regulate the behavior of private providers.
In reference to state building approaches decentralization is beneficial because “It seeks to reduce rent-seeking behavior and inefficient resource allocation associated with centralized power by dispersing such power to lower levels of government, where the poor are likely to exercise influence and a variety of actors may participate in the provision of services.”.
Limitations to decentralization are the reduction of the meritocratic basis can limit the states capacity to serve citizens, limited control of the fiscal funds at the local level can prevent effectiveness, and substantial inequalities in fiscal capacity among different regions can create ineffective redistribution of resources. Therefore, for these policies to work there must be coordination efforts to ensure that growth-oriented and redistributive strategies initiated at the central government are implemented regionally. Furthermore, government elites must be in favor of low-income groups and grass root groups should be able to engage with local authorities during policy making.
Examples of state-building
In the 21st century, it became economically and politically difficult for Latin American countries to increase revenues, which led states to turn to debt for the necessary resources to pay for war. As a result, Latin American countries did not establish the same tax basis that their European counterparts did. This can be explained by the predatory theory. Studies on the extraction of tax revenues have demonstrated that both external and internal rivals have an impact on the ability of a state to develop and extract resources from its citizens. Interstate rivals had a positive effect on the state's capacity to extract resources while intrastate rivals had a negative effect on state building.
The external threat theory can be applied to developing countries in Africa. The presence of both external state rivals and internal ethnic rivals prompted states to increase their extraction of taxes from citizens while internal political rivals failed to affect the extraction of taxes. The leaders in power try to maintain their position by catering to the majority ethnic group and increase taxes to gain the resources to diminish threats from minority ethnic groups. Thus, the presence of internal ethnic rivals creates the capacity to significantly increase the tax ratio. Drawing on Charles Tilly's theory of European state formation, a number of scholars have suggested that in focussing on internal rivalries, rather than challenging colonial borders, rulers were "less likely to see their economies as a resource to be nurtured than as an object of periodic plunder - the analogy to Olson's (1993) roving bandits should be clear" (Thies, 2004: 58). In the absence of external threats, rulers thus had no impetus to replicate the patterns described by Tilly - war making, coercion, resource extraction - that were crucial to the process of centralisation of power in the state in Europe. Herbst further explains that "domestic security threats, of the type African countries face so often, may force the state to increase revenue; however, civil conflicts result in fragmentation and considerable hostility among different segments of the population", undermining the state's ability to rally the population's support for the "national project" (2000: 126).
Several researchers have emphasized that the internal violence seen in Africa was characteristic to early modern European politics and this type of structure may resolve to produce a higher level of political order. This controversial claim has been criticized by a number of scholars for its "excessively Darwinian", overly deterministic and euro-centric understanding of the process of state formation (Thies, 2004: 69, see also Joseph, 1997).
The Palestine Liberation Organization (PLO) claims sovereignty over the Palestinian Territories, as well as representative status over the Palestinian people. However, it does not have sole jurisdiction over the areas it claims. In addition, many of those it aims to represent currently reside elsewhere, most notably in neighbouring Arab countries such as Jordan, Lebanon, and Syria. Nonetheless, the PLO and other Palestinian organisations have historically made great efforts to install institutions commonly associated with states in the Palestinian territories as well as in countries with large numbers of Palestinian residents. Examples include Jordan after the Six-Day War, where the installation of parallel structures of power and mechanisms for taxation and education led to largely independent Palestinian enclaves which formed a threat to the power and legitimacy of the monarchy, and Lebanon, where a similar process exacerbated ethnic and religious tensions.
Despite the break-down of the Oslo process and the on-going construction of Israeli settlements, the Palestinian National Authority continues to engage in state-building activities in its territories and refers to the "State of Palestine" in official documents since 2013. In 2003, UN Resolution 1515 was passed, calling for the "establishment of an independent, democratic and viable Palestinian state". Despite this official acknowledgement of the legitimacy of PNA state building by the international community, an Overseas Development Institute report has found international assistance to have been "sporadic and fragmented". Beside the lack in consistent outside support, the report identified key challenges to Palestinian state-building at the international level, including the lack of horizon on Final Status negotiations, failed peace negotiations, the tightening of the occupation, and the weak economic base, in addition to profound challenges at the domestic level, including:
• a lack of an internal political settlement
• weak linkages between ruling authorities and society at large
• weakened social cohesion
• gender inequality
• weak civil society
• lack of capacity of formal PNA institutions
• (perceived) securitization of authority across the occupied Palestinian territory
A number of scholars have questioned whether the Palestinian Authority was ever in a position to build a viable state. Edward Said, Neve Gordon and Sara Roy among others have argued that the PNA was designed as an "occupation subcontractor", only strengthening the power assymetries between occupier and occupied. Another strand of analysis, associated with Jamil Hilal and Mushtaq Khan (2004), portrays the PNA as a "transitional client quasi-state", stuck in a situation where core functions of the state remain in the hands of the Israeli state. They identify structural issues within the Oslo process and disunity and corruption prevalent among the Palestinian elite as key reasons for the failure of the Palestinian state-building efforts.
- Constitutional economics
- Political economy
- Rule according to higher law
- Regime change
- The White Man's Burden
- Disaster capitalism
- Political settlement
- Sovereign state
- State (polity)
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