An Agenda for State-Building in the Twenty-First Century

Stability in the twenty-first century will only be achieved when trust is established between citizens and their states across the globe. Decades of persistent conflict have exposed millions of people to insecurity, loss of opportunity, and increased risk of falling into poverty. Failure or fragility of the state has been at the heart of this crisis of governance and human rights violation.

Loss of legitimacy is the primary cause of the fragility and failure of states. The vicious cycle begins with loss of trust in the state to create an inclusive political, social, and economic order made predictable by rule of law. Some of the markers coincident with loss of legitimacy are: an increase in illegality, informality, and criminality in the economy; ineffective delivery of basic services; failure to maintain or expand essential infrastructure; increase in corruption; and appropriation of public assets for private gain. As a result, administrative control weakens and the bureaucracy is seen as an instrument for abuse of power, in turn leading to a crisis in public finances—where both revenue and expenditure are unpredictable and budgeting becomes an exercise in emergency management. The ultimate marker is the loss of legitimate use of violence by the state and emergence of armed groups that openly mock the authority of the state and gain control of various areas of the country.

Loss of control by states over their functions or territory has taken place through a variety of ways: institutional disintegration at the center (as in Nepal); separatist movements in multiethnic states (Yugoslavia, Ethiopia); persistent conflicts (Democratic Republic of the Congo, Liberia, Somalia, Uganda in the 1980s); intense repression to quell dissident movements (El Salvador, Guatemala, Sudan); and foreign invasions (Afghanistan, Lebanon).

The legacy of the Cold War has been an important contributing factor. During that period, political, military, and financial resources were provided to unrepresentative regimes depending on their orientation toward the then-superpowers. Accountability, effectiveness, transparency, and rule of law—the interlinked concepts that are now considered the basis of good governance and economic development—were absent from the lexicon of the Cold War. The emphasis of external support was on personalization of rule rather than on institutionalization of authority, as particular individuals were considered the lynchpins of alliances. Those demanding accountability were imprisoned, marginalized, or repressed, and some developed countries allowed their banking systems to be used to launder stolen public funds. As a result, a systematic dismantling of state institutions and the diversion of massive public assets for private gain took place in a large number of countries. With this external support removed at the end of the Cold War, these regimes have since shown their fragility, proven unable to embark on processes of reform to rebuild the institutions of the state and, accordingly, continued to repress the aspirations of their people.

Despite expenditure of billions of dollars and deployment of tens of thousands of international peacekeepers, the risk of state-failure in fragile states or in postconflict countries remains high. About 50 percent of countries that have entered a peace agreement after persistent conflict have descended to conflict again within 10 years. In our view, there are four major reasons for the failure of the international community to deal successfully with the challenge of failing and fragile states. First, the constellation of factors that assume a distinctive institutional pattern in countries in persistent conflict has not been analyzed. Second, as a result, the nature of the transitions required from persistent conflict to sustainable peace has not been recognized. Third, the necessary functions of a state that afford it legitimacy, both at home and abroad, have not been delineated and agreed upon. Fourth, as building of inclusive states has not been the goal of international political, development, and security organizations, their interventions have been pursued in stovepipes, and policies and practices designed for more stable states have often had the unintended consequence of undermining state-building programs.

In this paper, we propose first to offer an anatomy of the institutional patterns that arise from persistent conflict. We examine the challenge of transitions from conflict to stability, posited as being similar in magnitude and complexity to the problem of transition from a command to a market economy and from an authoritarian system to a democratic polity. We then delineate 10 functions that an inclusive state needs to perform in today’s world and outline an approach to creating state-building strategies. We conclude with some observations on the roles that the international system can play in supporting these state-building strategies.

A comprehensive discussion of a development strategy with state-building as its ultimate goal requires equal attention to the creation of the market and the constitution of civil society because functioning states, markets, and civil societies are all essential ingredients of a developmental paradigm. As civil societies and markets depend by definition on the existence of a stable and functioning state for their security, an enabling environment, the first rounds of this discussion are focused on the state. A series of similar discussions would need to engage the topics of the market and civil society in order to complete the picture.