What is State Capacity?

33 Pages Posted: 20 Feb 2019

See all articles by Stuti Khemani

Stuti Khemani

World Bank; World Bank - Development Research Group (DECRG)

Date Written: February 11, 2019

Abstract

Reform leaders who want to pursue technically sound policies are confronted with the problem of getting myriad government agencies, staffed by thousands of bureaucrats and state personnel, to deliver. This paper provides a framework for thinking about the problem as a series of interdependent principal-agent relationships in complex organizations, where one type of actor, the agent, takes actions on behalf of another, the principal. Using this framework to review and forge connections across a large literature, the paper shows how the crux of state capacity is the culture of bureaucracies -- the incentives, beliefs and expectations, or norms, shared among state personnel about how others are behaving. Although this characterization might apply generally to any complex organization, what distinguishes agencies of the state is the fundamental role of politics -- the processes by which the leaders who exercise power over bureaucracies, starting from the lowest village levels, are selected and sanctioned. Politics shapes not only the incentives of state personnel, but perhaps more importantly, it coordinates their beliefs and expectations, and thereby the performance of government agencies. Recognizing these roles of politics, the paper offers insights for what reform leaders can do to strengthen state capacity for public goods.

Keywords: Educational Institutions & Facilities, Effective Schools and Teachers, Health Care Services Industry, Educational Sciences, Public Health Promotion, Health Service Management and Delivery

Suggested Citation

Khemani, Stuti, What is State Capacity? (February 11, 2019). World Bank Policy Research Working Paper No. 8734. Available at SSRN: https://ssrn.com/abstract=3335607

Stuti Khemani (Contact Author)

World Bank ( email )

1818 H Street, N.W.
Washington, DC 20433
United States

HOME PAGE: http://econ.worldbank.org/staff/skhemani

World Bank - Development Research Group (DECRG)

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States

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