Failed states or a failed paradigm? State capacity and the limits of institutionalism

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  • Failed states or a failed paradigm? State capacityand the limits of institutionalism

    Shahar HameiriAsia Research Centre, Murdoch University, South Street, Murdoch, WA 6150, Australia.


    In the post-Cold War era, a voluminous literature has developed to define failedstates, identify the causes and parameters of failure, and devise ways for dealingwith the problems associated with state fragility and failure. While there is sometheoretical diversity within this literature notably between neoliberal institu-tionalists and neo-Weberian institutionalists state failure is commonly defined interms of state capacity. Since capacity is conceived in technical and objectiveterms, the political nature of projects of state construction (and reconstruction) ismasked. Whereas the existence of social and political struggles of various types isoften recognized by the failed states literature, these conflicts are abstracted frompolitical and social institutions. Such an analysis then extends into programmesthat attempt to build state capacity as part of projects that seek to manage socialand political conflict. Ascertaining which interests are involved and which interestsare left out in such processes is essential for any understanding of the prospects orotherwise of conflict resolution.Journal of International Relations and Development (2007) 10, 122149.doi:10.1057/palgrave.jird.1800120

    Keywords: economic development; failed states; governance; institutionalism; statecapacity; social conflict


    The post-Cold War era has been a time of exponential growth for scholarly andpolicy-makers interest in state failure. Major political leaders have placed failedstates and the problems associated with them at the centre of their countriesforeign policy agendas (e.g. Blair 2005; White House 2006). This concern hasindeed been translated into a number of forceful interventions instates such as Afghanistan and the Solomon Islands, with the proclaimedobjective of stopping and even reversing state decay and failure. The purpose ofthis article is to scrutinize the literature on failed states with the intentionof examining what concept of state failure emerges, what the problems are withthis conceptualization, and subsequently what the limitations of this literaturesprescriptions for addressing state failure are.

    Journal of International Relations and Development, 2007, 10, (122149)r 2007 Palgrave Macmillan Ltd 1408-6980/07 $30.00

  • While this article examines and evaluates the notion of state failure, this isnot an attempt to refine this concept. Indeed, the label failed state is itselfproblematic because of its propensity to stifle efforts to contextualize andbetter understand what are in essence very complex social phenomena someof which are rooted in global or regional, rather than in state-based processesof collapse (Berger 2006) that might explain these very states. By this I donot suggest that there are no serious problems associated with thedisintegration of the state apparatus in some states; rather that there is aneed for a more sophisticated theorization of state dynamics than thatadvanced in the failed states literature. The problem with this literature, hence,is not that it has invented problems that do no exist, but with the frameworkswithin which these problems are interpreted and evaluated and the blueprintsfor intervention and action these sorts of analyses invite. In one sense thesestate failure theories seek to bring back the state, both as an actor and as theobject of theoretical examination; but as I argue below, this is a problematicconception of statehood that does not view power and conflict as intrinsic tothe phenomenon of the state.

    The central argument presented and developed in this article is that whilethere is some theoretical diversity within the failed states literature notablybetween neoliberal institutionalists and neo-Weberian institutionalists statefailure and the very conception of statehood are commonly defined in terms ofstate capacity. Since capacity is articulated in technical and objective terms,the highly political nature of projects of state construction (and reconstruction)is masked. Crucially, within these approaches the state and its institutions areabstracted from the social and political conflicts that accompany processes ofcapitalist development. Capacity-building, thus, becomes essentially a form ofantipolitics (Jayasuriya and Hewison 2004) in that it justifies and evenencourages radical forms of intervention and social engineering. However,because little attention is given to the structural and political realities ofconflict and interest, these approaches are limited both in their capacity tounderstand the roots of the problems afflicting these states and in theircapacity to prescribe suitable remedies to these problems.

    In contrast, I propose a framework that reverses the relationship betweeninstitutional capacity and social conflict. Rather than viewing the latter asbeing shaped by, and subjected to, the former, I argue that to comprehend whyinstitutions operate the way they do we need to understand the underlyingsocial dynamics, framed by conflict, that work through social and politicalinstitutions (Robison and Hadiz 2004: 5). By grounding capacity in conflict, weeffectively re-politicize capacity, defining it as a socially constituted anddynamic phenomenon. It is a form of socially produced power [that] reflectsthe particular patterns of relationship current in a sociopolitical formation atany point in time (Malloy 1991: 9). Therefore, capacity is not something that

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  • resides necessarily within certain institutions or with certain individuals, but anattribute that relates to broader social and political structures, such as thoseaffecting class and ethnicity, within which institutions develop. It is therefore aterm that only has analytical merit within a theoretical framework that has aconcept of power. Reinterpreting the conflictcapacity relationship helpsexplain why in some cases state capacity may improve in relation to certainWeberian institutional benchmarks only to see the intensity of social conflictincrease rather than drop off.

    The article contains two main sections. The first provides a criticalexamination of neoliberal and neo-Weberian institutionalist approaches to statefailure, while the second section develops the theme of conflict analysis. There isno claim here that this article submits anything like a complete alternativeframework, but it does represent an initial attempt at such an agenda.

    Current Approaches to State Failure and Their Limitations

    In this section, I examine the ways in which the literature has conceptualizedstate failure, the implications of these varying conceptions and theirlimitations. Although the focus here is theoretical rather than empirical, it isdifficult to make a clear-cut distinction in relation to the failed states literaturebetween professional and practitioner texts since there is significant conver-gence and cross-fertilization between them. Indeed, much of the currentliterature on failed states does not come from traditional universitydepartments, but from purposely set-up, government-funded research institu-tions and think-tanks operating near or completely separately from establishedacademic institutions.1 Thus the question of whether the literature is driven bythe policy agenda or vice versa is akin to the proverbial chicken-and-egg. Thefailed states literature did not emerge in a vacuum, however, and the concernwith state failure is related to other themes that have been receiving muchacademic and practitioner attention since the end of the Cold War. Theseinclude: the spread of market systems and the world economy to manydeveloping and post-communist states, good governance, state sovereignty,international terrorism, illegal migration, the rising incidence of ethnic conflictand environmental degradation.

    Yet, because policy and theory have been so closely intertwined in the studyof failed states, it is important to bear in mind from the outset that this veryway of representing states is itself political and not an objective and empiricalassessment (Bilgin and Morton 2002: 56).2 According to Milliken and Krause(2003: 12), it has as much to do with

    dashed expectations about the achievements of modern statehood, orthe functions that modern states should fulfil, as it does with the

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  • empirically-observed decomposition or collapse of the institutions ofgovernance in different parts of the world.

    While they are correct to point out the ideological facet associated withdepictions of state failure, the problem with Milliken and Krauses argument isthat they do not recognize that these so-called expectations and functionshave themselves changed significantly over the years, in line with the changingroles of states in the global economy and in promoting global security(Jayasuriya 2005).

    While I divide the literature into neoliberal institutionalist and neo-Weberianinstitutionalist approaches to state failure, in reality this distinction is notprecise. Some authors and even development agencies (e.g. Rotberg 2004;Fukuyama 2005; DfID 2006) cannot be located neatly in one camp or the othersince their frameworks are more eclectic, drawing occasionally on conceptsfrom both perspectives.3 Indeed, Robison and Hadiz (2004: 23) argue that theneoliberal concern with state capacity itself has Weberian roots. However, thistypology does recognize the main theoretical fault-line within the literature onfailed states. Further, the distinctions between the two camps are notinsignificant as they fundamentally represent differing understandings of therelationship between politics and economics. Because of their differences,neoliberal and neo-Weberian institutionalists often tend to identify dissimilarcausalities for state failure, define state failure in different ways, as well asprescribe different solutions to the problems they associate with state failure.These theoretical divergences also mean that our critique of these approaches isnot wholly identical. However, as I have already noted, the parallels betweenthe two camps are also strong and it is where they meet that we find theiracutest deficiencies.

    Crucially, both approaches are limited by their propensity to define statefailure in relation to state capacity. Although state capacity, as we shall see,acquires different meanings in the two approaches, it is still articulated intechnical and objective terms that obscure the highly political nature ofprojects of state construction (and reconstruction). This has at least the threefollowing problematic and interrelated implications.

    First, while the literature does not completely ignore the existence of socialand political struggles of various types, these conflicts are abstracted frompolitical and social institutions and seen as constraints on these institutionscapacity to provide political goods. This is a technocratic notion of the state,which conflates politics with governance.

    Second, this does not recognize that state and institutions both formaland informal develop and change in the context of social conflict andstructural cleavages (Rodan et al. 2006). Since for neoliberal and neo-Weberianinstitutionalists conflict is framed and circumscribed by an overarching

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  • concern with approximating certain institutional benchmarks, the dynamics ofsocial conflict are not a major analytical concern. Therefore, this concept ofstate capacity fails to account for why certain institutions emerge in the firstplace and why they operate the way they do.

    Finally, capacity-building of the neoliberal or neo-Weberian variety has acrucial material dimension in that it becomes a way of mobilizing the politicalprojects of state building and of managing social and political conflict in amanner that favours particular interests. I now proceed to examine the twoapproaches in detail, beginning with neoliberal institutionalism.

    Neoliberal institutionalist accounts of state failure

    Neoliberal institutionalism is the term I use to refer to those approaches thatcombine the normative preference, associated with neoliberalism, for extendingmarket relations into all social, economic and political spheres, with anemphasis on creating and building the capacity of institutions mostly, butnot exclusively, state institutions to provide the conditions for the effectivefunctioning of markets. This approach has its roots in neoclassical economicsbut is more closely linked to new institutionalist economics (NIE; North 1981,1995).4 Neoliberal institutionalists primary concern is and has always been theeffectiveness of the institutions that are directly associated with the operationsof the market, such as independent central banks, property rights and the ruleof law. However, in recent years, particularly within the World Bank, thestrength of social institutions, social capital and social safety nets has alsobecome an area of considerable interest (World Bank 2001), although this isstill in relation to their potential to support the successful extension of marketsand market relations (Carroll 2006).

    At the heart of the neoliberal institutionalist approach, and this is crucial, isthe conflation of state failure and fragility conceived as a global securityconcern (USAID 2005: 1) with underdevelopment and poverty, albeit with astrong neoliberal slant, separating capitalist development from broaderpolitical issues relating to social conflict (Berger and Weber 2006: 202). Thus,within this literature the relationship between the domestic and the globalspheres is asymmetrical in that the risks associated with the intensification ofdomestic conflict are understood to have global implications, but domesticconflict in itself is not seen as related to changing patterns of capitalisteconomic development, locally and globally. Rather, it is viewed in relation tothe capacity of state institutions to provide conditions hospitable to integrationin the global economy. This serves to reinforce a coercive and interventionistapproach to the states defined as fragile or failed.

    In the donor literature, which comprises a significant portion of theneoliberal institutionalist literature on failed states, the term state failure is

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  • used only infrequently. The preferred term is fragile states (Anderson 2005;DfID 2005; USAID 2005), although the World Bank also uses the term low-income countries under stress (LICUS). There is some variation within theliterature in the way that fragility is conceived. For example, the BritishDepartment for International Development (DfID 2005: 7) defines fragilestates as those where the government cannot or will not deliver the corefunctions to the majority of its people, including the poor. The United StatesAgency for International Development (USAID 2005: 1), on the other hand,uses the term fragile states to refer to a broad range of failing, failed, andrecovering states, categorized as vulnerable or in crisis. Later it is added thatthe instability associated with fragile states is the product of ineffective andillegitimate governance (USAID 2005: 3, my emphasis). The World Banknotes that LICUS countries represent a broad spectrum of situations andcharacteristics that include conflict vulnerable, post-conflict countries withfragile institutions, countries with weak or dysfunctional institutions andpolicies, and strong regimes with a particularly poor governance record(quoted from Anderson 2005: 2, in a footnote).

    While related, the terms failure and fragility (or LICUS) are notsynonymous, they are rather understood to be placed on a continuum of stateperformance and effectiveness (Torres and Anderson 2004: 6) so that failedstates are included within the broader category of fragile states (numbering upto 46 countries worldwide according to DfID 2005). While state fragilityindicates to these authors that there is a real threat of failure, they argue thatdeterioration is not a foregone conclusion. The descent into failure could behalted with the right policies and targeted international assistance andintervention (Rotberg 2004: 3142). The distinction between fragile and failedstates helps clarify the definitions for fragility provided above. While statefragility is viewed in this literature as indicating either low capacity or lack ofpolitical will, when a state is failed or in even more extreme cases collapsed,political will is no longer the issue because the central state has effectivelyceased to function (Torres and Anderson 2004: 5). Then the task becomes notabout influencing rogue governments to improve their governance, but abouthow to form new states from scratch (Meierhenrich 2004: 153) an issue ofcapacity-building.

    To gain an understanding of what effective and legitimate governance meanshere, we can turn to the World Banks Country Policy and InstitutionalAssessment document (CPIA; World Bank 2003). This is a questionnairedesigned to help Bank staff assess the quality of countries institutionalframework. The questionnaire is divided into four major categories economic management, structural policies, policies for social inclusion/equityand public sector management and institutions each comprising five sub-categories. In each sub-category a country is rated from one to six, with one

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  • indicating an unsatisfactory for an extended period performance (WorldBank 2003: 2). States that perform consistently poorly according to thisquestionnaire are considered fragile or LICUS.

    In the CPIA the emphasis is not on achieving certain development outcomesper se (poverty reduction, millennium development goals, etc.), but rather onthe existence and proper functioning of institutions, mostly those related tomarket-led development. As Rosser (2006: 2) points out:

    The criteria that make up the CPIA emphasise the importance ofderegulated markets, conservative macroeconomic and fiscal policies andpublic administrative and other institutional structures that providetransparency and accountability.

    The implicit assumptions of the CPIA are therefore that the main developmentproblem that fragile states face is weak governance, policies and institutions,and that there is only one way to go about ameliorating this weakness throughmarket-led development (Rosser 2006: 2). Hence, the alleviation of statefragility (and therefore failure) is seen as a matter of setting up the rightprocesses. It is assumed that having the right set of market-supportinginstitutions would necessarily lead to the desired development outcomes. Thisis important for two reasons. First, it is a major point of difference betweenneoliberal institutionalism and neo-Weberian institutionalism because for thelatter there can potentially be more than one right way to state capacity.Second, it is precisely in the emphasis on process and on institutions as shapingprocess that the concern with failed states links up with the broader concernwith good governance and aid effectiveness.5

    The common wisdom within the donor community in recent years has beenthat aid is most effective in promoting development in countries that havegood governance sound policies and institutions (Rosser 2006: 1).6 Indeed,in some cases, such as the US Millennium Challenge Account and the recentAustralian Agency for International Development (AusAID) White Paper onAustralias overseas aid programme, there is a discernable tendency toconcentrate on and reward good performers, and marginalize those countriesthat struggle to provide good governance (Soederberg 2004; AusAID 2006).However, because poor governance and underdevelopment are now associatedwith spill-overs of terrorism, conflict and other security threats to the West andto neighbouring countries (Torres and Anderson 2004; USAID 2005), there isan emerging consensus in the literature that donors should not disengage fromstates exhibiting poor governance, but rather develop ways to workmore effectively there (Chauvet and Collier 2004; DfID 2005; USAID 2005).What we see, then, is good governance serving simultaneously as theassessment criteria for state capacity and as the objective of capacity-building.Therefore, poor governance is seen to be both the problem failed states face

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  • and its cause. This embodies a technocratic understanding of the state and ofstate dynamics.

    That neoliberals are interested at all in the state should come as somesurprise indeed, there is more than a trace of irony in this. Rooted as it is inneoclassical economics, neoliberal ideology holds up the free market as themost efficient resource allocation and price-setting mechanism in an environ-ment in which resources are limited.7 Based on this assumption and on theassumption that participants in the market are rational self-interestedindividuals seeking to maximize personal gains, neoliberals argue that allowingmarkets to operate without external interference will lead to the greatest wealthfor society as a whole. Real development, thus, only occurs when marketsoperate freely. In this view, any form of political interference in the marketdistorts the price-setting mechanism, encourages rent-seeking and leads toinefficiencies and wastage.

    In this context it is plain to see why in its earlier incarnations, from the late1970s through to the early 1990s, neoliberalism tended to treat the state withdisdain. The proponents of neoliberal reforms often saw the state and thedistributional politics that revolved around it as the main obstacle to theeffective operation of markets and hence to sustained economic growth anddevelopment. The first target of neoliberalism was the expansive modernwelfare state, which was struggling in the wake of the 1970s oil shocks.Conservative British Prime Minister Margaret Thatcher was among the first toattempt to put neoliberal prescriptions into practice in her effort to roll backthe British welfare state, reduce government spending, establish tight monetarycontrols, privatize government-owned enterprises and fight the entrenchedpower of trade unions. Limiting union power was seen as paramount byneoclassical economists and neoliberal ideologues because, as the majordistributional coalition, they were seen to be extracting benefits for theirmembers through the state that were greater than the true market value oftheir labour. This, it was argued, distorted markets by inflating the costs of allother goods and services without generating any real growth, leading tostagflation (Thatcher 1978; Darby and Lothian 1982).8

    During the same period in which the welfare state came under attack,neoclassical economics and neoliberal ideology became hegemonic within theBretton Woods institutions the International Monetary Fund (IMF) andthe World Bank and the development agencies of the main Western states.Instead of Keynesian-style prescriptions, such as import-substitution indus-trialization and the management of domestic supply and demand through fiscalmeans, the governments of developing countries were pressured by the maindonors to implement policies mirroring neoliberal prescriptions elsewhere.9 Inthe developing world, World Bank and IMF structural adjustment pro-grammes, particularly in the 1980s and early 1990s, attempted to limit state

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  • involvement in economic management by conditioning the allocation of aid onpublic sector restructuring, privatization and financial account liberalization(World Bank 1983). These prescriptions, as Paris (2004) observes, have alsobeen extended to recovering fragile states and indeed during the 1990s, allinternational interventions in post-conflict states pursued rapid liberalizationand democratization.10

    Paris (2004: 35) argues that peace-builders pursued liberalization becausethey believed that the implications of dysfunctional markets go far beyondeconomic stagnation; they were seen to underlie the emergence and protractionof violent conflicts. Within this view, it is believed that when the integrity ofmarkets is breached this provides incentives and opportunities for rent-seekers,such as warlords and predatory politicians and bureaucrats, to plunder or evencarve up the state and thereby sustain conflict for personal benefit.11 Thissentiment is clearly articulated by Paul Collier (2000: 4), who bluntly states: Itdoes not really matter whether rebels are motivated by greed, by a lust forpower, or by grievance, as long as what causes conflict is the feasibility ofpredation. Because the market is viewed as a universal and apolitical entity,establishing efficient market systems is also seen as a long-term conflictresolution.

    What has become apparent to neoliberals, though, is that markets could notestablish and protect themselves. Following the implementation and develop-ment failures associated with the World Bank and IMFs structural adjustmentprogrammes in the 1980s and early 1990s and the strong resistance thatneoliberal reforms had encountered in many of the countries in which they hadbeen attempted, it seemed that the inherent superiority neoclassical economistsbelieved markets to possess was not enough to convince vested interests todesist from their rent-seeking activities. It was this realization that led to thecurrent interest in the state and in institutions as the underwriters andprotectors of the market, and it is therefore this notion that explains theemergence of depictions of state failure and fragility in their neoliberalinstitutionalist variant.

    Beginning with the 1991 report Managing Development: The GovernanceDimension (World Bank 1991), the Bank and other organizations have beenpaying much attention to the institutional quality of states. This has beenaccompanied by a voluminous literature on institutions, governance andcapacity. Whereas previously states were considered peripheral, or even athreat, to achieving sustainable market-led development, in recent years theyhave become essential in the eyes of the main donors for securing difficultreforms.12 Therefore, rather than pursuing rapid liberalization, currentprescriptions recommend creating institutions or strengthening the capacityof existing institutions to effectively regulate markets, as well as insulate themfrom rent-seekers and vested interests (Rodan et al. 2006: 3).

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  • This way of understanding the role of the state points at a particularunderstanding of the relationship between politics and economics. AsRodan et al. (2006: 3) argue, [p]olitics in this view is seen as a set of externalfactors hampering the natural functioning of markets. This entails aseparation of politics from economics, wherein the latter has its own rationaland universal rules, embodied in the concept of the market an abstract andapolitical entity and the former is necessarily painted in a negative light. Inthis view, the best good politics can hope to be is the protector of theeconomic sphere from the interference of bad politics. This is a form ofdepoliticization, but not in the narrow sense of the word. As we have seen,politics are of genuine concern at least to some neoliberal institutionalists they know fully well that to establish free markets, reformers have to engagewith and undermine those interests that benefit from existing arrangements.Rather than ignoring politics altogether, neoliberal institutionalists depoliti-cize, whether intentionally or not, the very criteria upon which good publicpolicy is measured, and even more importantly they depoliticize the institutionsthat issue public policy and the capacity with which these institutions aresupposedly imbued.

    Capacity here, as we have seen in the CPIA, is seen as a measure of technicalefficiency. Institutions are defined by their respective policy capacities theirfunctions and not in relation to the political and social conflicts that runthrough them and that may explain, rather than describe, how they operate.The state, for its part, is not conceived as a political entity but as an emptyvessel designed to provide certain functions; it is a neutral collection ofinstitutions that are basically service-providers to the private sector. The role ofthe state is to create and enforce the rules [to make markets work moreeffectively], to establish law and order, and to ensure property rights,[otherwise] production and investment will be deterred and investmenthindered (World Bank (1991: 3), quoted in Robison and Hadiz 2004: 23).Therefore, government is seen as little more than an implementation partnerand custodial manager of a prescribed institutional matrix (Carroll andHameiri 2006: 22).

    The problem here is that, because they take politics out of institutions andcapacity, neoliberal institutionalists know what they want and what it lookslike, but they do not know how to get there; therefore, implementationbecomes their main concern but remains elusive as ever. When DfID (2006: 45)proclaims that there is no single path to growth, what they really mean is thatthere is conceivably more than one way to implement essentially the samereforms. However, even Douglass North, one of the founding fathers of NIE,acknowledged that institutions were not necessarily created to be sociallyefficient, but were usually created to serve the interests of those with thebargaining power to create the new rules (North 1995: 20). Conversely,

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  • Chaudhry (1997: 11) admonished NIEs assumption that institutionalefficiency is universal and has no social basis:

    If history has no telos except efficiency, and efficiency is by definitionachieved through the aggregate actions of rational self-interested individuals,then world-historical time is irrelevant and historical periodizationunimportant. When states fail to meet their technological productionhorizon, it is because they are predatory; when they succeed, it is becausethey have minimized transaction costs in perfect accord with theirendowments.

    And even if reforms were implemented successfully and institutions that supplythe right policies were created this does not mean that conflict hasdisappeared or even weakened; in fact, social conflict may very well havebeen exacerbated by these very reforms it is not a zero-sum game. Forexample, in the Solomon Islands in the late 1990s a relatively successfulimplementation of an Asian Development Bank (ADB) and IMF-funded andsponsored public sector restructuring programme was one of the main causesof the eruption of an ethnic conflict. ADB economists Knapman and Saldanha(1999) praised the Solomon Islands government at the time for its commitmentto the reforms. During that period, the Solomons government also managed toreduce its debt markedly in only one year, rein in expenditure and embark onan ambitious public sector retrenchment programme. However, as I argueelsewhere (Hameiri 2007), these very reforms have undermined the govern-ments position, leading in part to the eruption in late 1999 of an ethnicconflict. Similarly, by late 2006 the Australian-led Regional Assistance Missionto the Solomon Islands (RAMSI) had spent nearly AUD 1 billion on state-building in the Solomon Islands with very limited success, despite havingAustralian personnel in key positions within the Solomons administration anddespite improvements in the states capacity to provide the conditions formarket-led development (according to Fullilove 2006). The April 2006 riots inHoniara and the frictions between Solomons Prime Minister ManassehSogavare and the Australian government in late 2006, following Sogavaresousting of the Australian High Commissioner to Honiara and his refusal toextradite his Attorney-General Julian Moti to face trial in Australia, clearlydemonstrate the complexity of the relationship between capacity-building andsocial conflict a relationship that the neoliberal institutionalist approachignores and in any case is not equipped to adequately explain.

    Neo-Weberian institutionalist accounts of state failure

    A more sophisticated body of literature on state failure is that which I termneo-Weberian institutionalism. There is great diversity of analysis and purpose

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  • within this literature. It includes authors working directly with Westerngovernments and donors in the effort to develop more effective ways tointervene in failed states, by harnessing the global economy and market-leddevelopment to the task of state building (e.g. Wainwright 2003; van de Walle2004). Others are deeply critical of these interventions and the limitations theybelieve neoliberal reforms place on the capacity of state leaders to fosterdevelopment in their countries (e.g. Putzel 2004; Chandler 2006). This groupsees globalization as a potential impediment to the development of real statecapacity and indigenous leadership. Another significant distinction is betweenstate-centred and society-centred neo-Weberian institutionalists. While theformer are primarily concerned with building the capacity of state institutionsto control their territories effectively (Dorff 2000; Fukuyama 2005), the latteremphasize statesociety links and the fit between the structures and institutionsof the modern state and the society over which it is meant to rule (Dauvergne1998; Kabutaulaka 2005). What all of these have in common is their propensityto evaluate states in terms of institutional capacity and compare theirperformance to a Weberian ideal-type.

    In line with the central argument pursued in this article, this section makestwo principal arguments. First, it aims to show that the concept of capacity isat the core of the neo-Weberian institutionalist approach to state failure.This is both as the very definition of failure and as a way of evaluating itsparameters. Increasingly, capacity provides the very distinction between astate and a non-state. This is because the states capacity to exercise authoritywithin its territory is now considered a condition for its right to retainlegal sovereign status. Second, I argue that, as with neoliberal institutionalism,this way of theorizing state failure is problematic because it is unable to explainthe emergence and possible trajectories of social and political conflicts,while simultaneously providing the rationale for radical forms of interven-tionism.

    That there is a broad and diverse neo-Weberian institutionalist literature onstate failure and collapse is hardly surprising considering the ongoing centralityof the state within neo-Weberian literature (Jessop 1990). Even before failedstates became a major concern for policy-makers in the post-ColdWar era, neo-Weberian theorists have worked to flesh out concepts likestate strength and weakness (Migdal 1988). Indeed, neo-Weberian authorssought to convince readers that states were more than just vessels of society they were potentially autonomous institutions, worthy of investigation in theirown right:

    States conceived as organizations claiming control over territories andpeople may formulate and pursue goals that are not simply reflective of thedemands or interests of social groups, classes, or society. This is what is

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  • usually meant by state autonomyy Pursuing matters further, one maythen explore the capacities of states to implement official goals, especiallyover the actual or potential opposition of powerful social groups or in theface of recalcitrant economic circumstances (Skocpol 1985: 9).

    There are at least two important points we can distil from Skocpols argument.First, it contains the assumption that state and society are distinct by arguingthat it is states that deserve to be examined as the independent variable and notsociety. This is contrasted with pluralist and neo-Marxist approaches withinwhich, Skocpol argues, the state disappears altogether. Second, state capacityhere has two dimensions. The first is recognized by neoliberal institutionalists the capacity to resist societal influence and indeed to shape society. Thesecond, and this separates neo-Weberian approaches from neoliberalapproaches, is the capacity to intervene in the economy in order to shapeeconomic outcomes. Capacity, therefore, defines statesociety relations andstatemarket relations. Whereas neoliberal institutionalists view the market asfundamentally apolitical and abstract, neo-Weberian institutionalists recognizethe potentially useful role that political leadership can play in facilitating andsustaining economic development a role that goes beyond merely protectingmarkets from political interference. In fact, for some neo-Weberians, well-targeted state interference in markets is highly desirable (Weiss 1999).Although strong state capacity is still ultimately associated here with economicdevelopment, sustained growth is not necessarily seen as established on freemarkets but rather on the capacity of state institutions and state elites toharness societal forces and manipulate domestic and external constraints to thestates advantage (Weiss 1999: 45).

    State capacity, however, is not merely a comparative measure, positioningthe state in relation to society and markets. Rather, it is also conceived inrelation to an idealtypical modern state. As Milliken and Krause (2003: 3)point out:

    From the outset, the modern stateyrepresented an ideal of sovereignterritoriality to which rulers aspired, but which they seldom achieved. EvenWestern European states today do not always reach the Weberian pinnaclein which a rationalized central bureaucracy enjoys a monopoly of organizedviolence over a given territory and population (their italics).

    There are, it is argued, certain core functions that a state must fulfilsatisfactorily in order to be a state (Zartman 1995: 5; Fukuyama 2005). Thedistinction between the states capacity to force its will on society and itscapacity to implement proper policies despite societal resistance is preciselythe difference Zartman (1995: 7) identifies between a strong state and a hard

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  • state. Strong states provide positive authority that is fundamentally for thebenefit of their citizens, whereas hard states only repress their citizens andexploit them for the benefit of very narrow interests. Thus we see that theconcept of capacity here is two-pronged: it contains a comparative componentthat measures the states strength relative to society and markets, and anobjective component that measures the states capacity vis-a-vis the Weberianideal. It is important to note that these are two components of the sameconcept and not two different concepts of capacity. It is the objective elementof state capacity that underlines the concern with state functions.

    No consensus exists in the literature over what the basic functions ofstatehood are. The three fundamental functions Milliken and Krause (2003: 4)identify are security, representation and welfare. They argue that at the veryleast a state should protect its citizens; from harm and provide order; representthe symbolic identity of its citizens; and assist in the development of wealth.Others have a more specified list of political goods. Rotberg (2004: 24), forexample, includes health services, infrastructure, law and order, education andmany more, noting that some functions are more important than others, withsecurity both internal and external the most important. Based on this,Neo-Weberian approaches define failed states simply as those whoseinstitutions are unable or unwilling to perform the functions associated withmodern statehood.

    The functions of the modern state, whichever way defined, have two facets inthis literature: institutional and legitimation. On the one hand, state functionsprovide the definition for state institutions. On the other hand, performingthese functions properly is also said to have a legitimizing effect. Let usexamine these in turn.

    Stateness is conditioned, as we have seen, on the states performance. Thearms of the state entrusted with the task of performing state functions are itsinstitutions (Fukuyama 2005: 30). Neo-Weberian institutionalists view thestate itself essentially as an institution or organization, comprised of numerousinstitutions and agencies (Migdal 1988: 19). Each of the states institutions isassociated with an official function, which it is meant to carry out within thebureaucratic order. For example, in an ideal setting the police and the militaryare responsible for providing security, while the treasury is responsible foreconomic policy. The key element of institutional capacity is the institutionsrule-making role in its area of responsibility its ability to plan official goalsand implement these plans successfully. In other words, institutional capacityprovides the link between the institutions function and the ultimate objectiveof stateness. Because some institutions are better at formulating and executingpolicy than others, state capacity the aggregate capacity of all of thedifferent arms of government, as well as the capacity of the states leadership tocoordinate and control other institutions is not necessarily even. States can

    Shahar HameiriFailed states or a failed paradigm?


  • exhibit strong capacity in some areas of public policy and weak capacity inothers. The state can also at times have a powerful presence in some of itsgeographical regions and be practically non-existent in others, as is the case inthe Tamil regions of Sri Lanka and the Colombian regions dominated byMarxist guerrillas (Rotberg 2004: 15).

    Capacity also plays a key legitimizing role for states within this framework.Indeed, state legitimacy has traditionally been a key concern for neo-Weberians: Max Weber (1991) himself, famously defined the state as ahuman community that (successfully) claims the monopoly of the legitimateuse of physical force within a given territory. More recently, Robert Rotberg(2004: 1) has tied legitimacy directly with performance:

    Nation-states fail when they are consumed by internal violence and ceasedelivering positive political goods to their inhabitants. Their governmentslose credibility, and the continuing nature of the particular nation-state itselfbecomes questionable and illegitimate in the hearts and minds of its citizens.

    While Rotbergs very linear connection between capacity and legitimacy isperhaps more narrowly functional than that theorized by many neo-Weberians, it is nevertheless instructive of the sort of analyses provided.Zartman (1995: 7) argues that when a state overplays its control functions, itloses the willing allegiance and support of its population. This does not mean,he maintains, that there are no core functions that all states anywhere have toperform adequately to gain legitimacy. For others, legitimacy has to do withthe fit between state and society (Dauvergne 1998; Kabutaulaka 2005). Thepost-colonial state, these authors argue, has to accommodate, and even cometo approximate at times, traditional forms of governance in order to belegitimate in the eyes of its citizens. This approach has benefits in challengingmore linear approaches to state legitimacy. Nevertheless, it relies on aproblematic distinction between modern and traditional governance, and at itscore it still links legitimacy with state capacity. Essentially, the conception ofcapacity has not changed. What have changed are the approaches todeveloping it.

    There are several problems with this notion of state legitimacy worthreflecting upon. This is particularly to do with its relationship with thebifurcated objective/comparative dimensions of state capacity. Firstly,by positing legitimacy as the dependent variable and state capacity as theindependent variable, legitimacy is made external to social and politicalrelationships. It thus, ironically becomes satisfying about objective capacitycriteria and not any domestic political relationships. Secondly, this way oftheorizing legitimacy reifies the dichotomization of state and society. Theimplicit assumption, not always borne out by reality, is that when statecapacity is high there would be few or no challenges to its authority. The main

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  • issue is not only that this conception of legitimacy reinforces the theoreticalseparation of state and society, but that it also appears that the very definitionof state capacity is reliant upon the statesociety binary. This is because to makesense, the comparative dimension of capacity requires at least two definedentities, and at least one of these entities has to attempt to act on the other. Theoutcome of this attempted transformation is then also evaluated against theobjective ideal-type Weberian state to determine its legitimacy and utility.

    That there is no meaningful concept of capacity for neo-Weberians outsideof the statesociety dichotomy is evident in Zartmans contention that,

    when the state collapses, order and power (but not always legitimacy) falldown to local groups or are up for grabs. These ups and downs of powerthen vie with central attempts to reconstitute authority. For a period, thestate itself, as a legitimate, functioning order, is gone (Zartman 1995: 1).

    When states collapse that is lose capacity and legitimacy the outcome,according to Zartman, is a contestation for power and authority between thecentral state and societal power centres. But this is not all: Zartman argues thatthe uniqueness of the modern phenomenon of state collapse, as opposed toearlier instances of decaying civilizations is that contemporary collapse does notinvolve societal civilizational collapse societies continue to function and tooffer alternative sources of legitimate authority. Modern state collapse is muchmore specific, narrow, and identifiable, a political cause and effect with socialand economic implications, and one that represents a significant anomaly(Zartman 1995: 2). To prevent collapse, Zartman seems to imply, the state has topenetrate society and establish its authority over potential challengers fromcompeting groups located outside the state. While society, in this view, does notnecessarily collapse as a result of state collapse, in order for the state to surviverecalcitrant elements within society must be subdued. This way of imaginingstatesociety relations has strong authoritarian hues, mirroring earlier Hun-tingtonian modernization theory (Bilgin and Morton 2002: 63).

    More than simply a way of evaluating states, state capacity is also increasinglya way of distinguishing between states and non-states. Zartman (1995: 5) definesthe state as the authoritative political institution that is sovereign over arecognized territory. This definition focuses our attention on the relationshipbetween the state as an institution and sovereignty. Sovereignty is constitutive ofthe state, because it provides the most basic distinction, in international relationsterms, between a state and a non-state entity (Srensen 1999), but sovereigntyitself is a multi-faceted and complex concept. The sovereignty Zartman refers tois domestic sovereignty, to borrow Krasners (1999) definition the effectiveorganization of authority within the territory of a given state (Keohane 2003:285). This is different from sovereignty as a legal status, what Srensen (1999:591) calls the constitutive rules of sovereignty. Indeed, as Bilgin and Morton

    Shahar HameiriFailed states or a failed paradigm?


  • (2002: 56) point out, the distinction between failed states and rogue stateshinges on the point that the latter refuse to fulfil the international functions ofstatehood, while the former fail to perform the domestic requirements. Since theend of the Cold War and particularly since September 11, the traditional neo-Weberian concern with the domestic attributes of sovereignty and authority hasfound new significance due to the broader concern with the potential spill-oversof security threats to the West and to countries neighbouring with failed states(Fukuyama 2005). The result has been a tendency towards promoting positivesovereignty as the principle for acceptable statehood to the point of suspending but not cancelling the sovereign status of certain states (Bain 2003).Clapham (1998) goes further to argue that states should only be given sovereignstatus on the basis of their capacity to act like states: rather than distinguishingsharply between entities that are, and are not states, we should regard differententities as meeting the criteria for international statehood to a greater or lesserdegree (Clapham 1998: 143).

    Despite their advance over neoliberal institutionalist approaches to statefailure, the neo-Weberian approaches are still inadequately equipped to explainthe existence and trajectories of social and political conflicts. This isproblematic since the presence of intractable social and political conflicts ofvarious kinds is precisely the common link that binds the states depicted asfailed. Neo-Weberians reject the neoliberal insistence on the universal utility offree markets and therefore allow, as we have seen, for the broadening of theconcept of state capacity to include the states ability to intervene in marketssuccessfully. With this observation, they are able to recognize that at timesliberalization, which tends to unleash the forces of powerful globalized capitalon states (and societies), may actually lead to failure and conflict byundermining state capacity. This is particularly the case in states that arealready weak, when viewed from this perspective (Paris 2004; Putzel 2004).

    However, neo-Weberian approaches still do not theorize the links betweensocial and political conflicts and capitalist development. Instead of examiningthe power relationships that cut across the permeable boundaries of state,society and markets, they remain locked within unhelpful binaries like stateand society, traditional and modern. This way of understanding states,particularly when applied to post-colonial states, de-historicizes their develop-ment (Bilgin and Morton 2002: 63), leading neo-Weberian institutionalists tofocus on evaluating the degree to which certain states approximate pre-existingWeberian benchmarks. Thus, although state capacity is removed from theshackles of neoliberal ideology its definition still embodies a normativepreference for order and stability of a particular kind, rather than a frameworkfor understanding and explaining political and social dynamics, including thosethat may lead to the disintegration of certain power structures. This ultimatelypaves the way to radical, state-building, forms of intervention in those countries.

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  • As we have seen, state capacity is conceived by neo-Weberians as a two-pronged comparative/objective concept. In both dimensions, the concept ofcapacity embodies a technical way of understanding state power thateffectively depoliticizes capacity. While the ideal-type Weberian state thatserves as the benchmark for state capacity in its objective form is clearlydefined by its functionality, both as the institution providing authorityinternally and as a participant in the international society of states, thecomparative dimension of capacity is no less technocratic in its conception.The capacity of the state vis-a-vis civil society and markets is viewed in terms ofthe states degree of penetration into and control over these supposedly distinctspheres. Further, as Chowdhury points out: the state, understood primarily asa set of agencies which have a monopoly of coercive authority remains thecentral conceptual instrument for understanding civil society (quoted in Bilginand Morton 2002: 63). This means that the comparative relationship betweenstate and society is also viewed via the prism of state functionality as relating tothe Weberian ideal-type. The question then becomes who delivers the functionsof the state state institutions or societal groups?

    Capacity in neo-Weberian accounts is depoliticized, not because neo-Weberian institutionalists are unaware of the political struggles that take placewithin elites and between state elites and societal forces. It is depoliticizedbecause, in the same manner as neoliberal institutionalists, neo-Weberianinstitutionalists do not theorize the relationship between capacity, socialconflict and patterns of capitalist development. Capacity remains a technicalmeasure associated with the performance of formal institutions. Therefore, thisliterature is able to describe the parameters of state performance and failure indetail, but is unable to adequately explain the emergence and trajectories ofconflicts. Conflict remains essentially the by-product of low state capacity. Itis in this sense that we can conclude that within this perspective, failure itself isdepoliticized.

    In the final section, I introduce a theoretical framework that can potentiallyovercome the limitations of the neoliberal and neo-Weberian institutionalistapproaches.

    From State Capacity to Social Conflict y and Back

    In this final section of the article, I outline the utility of social conflict theory(Hewison et al. 1993; Chaudhry 1997; Rodan et al. 2006) as a way of explain-ing state dynamics, and particularly the dynamics of states in crisis. Boththe neoliberal institutionalist and the neo-Weberian institutionalist approachesto the study of the so-called failed states emphasize the institutional attri-butes of such states and in particular the capacity of state institutions to

    Shahar HameiriFailed states or a failed paradigm?


  • perform certain functions satisfactorily. What both ignore is the centrality ofsocial and political conflict in the development of states and particularly thosein which the central states authority is splintered from within or challengedfrom without. Social conflict here is understood as the struggle betweeninterests classes, class fractions, distributional coalitions and other societalgroups existing in a dynamic power relationship, over access to stateresources and state power (Rodan et al. 2006: 67). The focus on socialconflict, based on a broader system-level, structural analysis of statesocietyrelations, is able to position state capacity in the context of the historicaldevelopment of the state and the material relations it embodies. This way oftheorizing the state and state dynamics is influenced by structuralistapproaches to state theory, such as Jessops (1990) and earlier, Poulantzas(1978).

    Rather than seeing the state as a set of institutions and agencies, I view it asan expression of power (Hewison et al. 1993: 45). State power is a set ofcomplex social relationships that are dynamic and shape the use of the stateapparatus. Because these forms exist within a context of social relations, it ismisleading to view the state or its apparatus as neutral. The significance ofinstitutions resides not in their capacity per se, but in the sort of interests theypromote or marginalize, and in the sort of conflicts they give expression to, orstructure out of politics (Rodan and Jayasuriya 2006). Therefore, state andsociety are not mutually exclusive, nor is the state merely embedded insociety. In reality, formal and informal institutions of state and civil society areboth spheres in which political power is organized and exercised. Rather thanfocusing on the capacity of institutions bureaucratically defined to carryout certain functions, we need to gain an understanding of the power relationsthat permeate both state and society and the interests that benefit from the wayinstitutions operate. These interests, however, are not the rational individualsfrom Colliers (2000) analysis of predatory behaviour and conflict wementioned earlier, but social categories, such as classes, distributionalcoalitions, class fractions and ethnicities. These categories are dynamic andhistorically specific, and so are the coalitions forged between them. Within theframework developed here, we pay special attention to the historical patternsof economic development within which patterns of resource allocation and/orpredation have developed. This includes examining the ideological dimensionsof co-option, control and subjugation associated with colonial and post-colonial state forms.

    Instead of emphasizing the deviation between the institutional attributes of aparticular state and an ideal-type, my approach is primarily concerned with theexplanation of state power in the context of social conflict. This seeks totranscend normative accounts of state and institutions in order to fullyunderstand the environments of deprivation and contestation within which

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  • state power is exercised, broken up or used to benefit particular interests. Forexample, rather than embodying a universal and rational mode of governance,the governance model that neoliberals term good governance seeks to protectthe interests of property owners and investors (ironically, these interests are inthemselves not actually universal). Therefore, in order to be successfullyimplemented and sustained good governance requires the existence of apowerful coalition of societal forces that supports it while effectivelymarginalizing opposition.

    While the conception of conflict advanced here is useful for identifying theunderlying social cleavages and the way they relate to state power, thisapproach does not aim to provide a universal explanation for the very eruptionof violent conflict. The latter usually has complex and varying causes. Indeed,inequality and social and/or ethnic cleavages are found in nearly all capitalistsocieties and in most pre-capitalist ones, but they usually do not lead to large-scale violent conflict. Even an exploitative political and economic structurethat benefits very narrow interests can be sustained for many years usingrepressive or ideological means, or a combination thereof. Nevertheless, violentconflicts are always grounded in underlying patterns of social conflict, and intimes of serious economic and political crises, such as the Asian crisis of thelate 1990s, these links are often exposed (Rodan et al. 2006: 24).13 In Indonesia,for example, violent anti-Chinese riots in the early days of the crisis were amanifestation of widespread public antagonism towards the small, and oftenethnically Chinese, politico-business elites that Soeharto had nurtured(Robison and Hadiz 2004). Since the deep and often violent conflictsassociated with state failure constitute a direct contestation over access tostate power and limited state resources, identifying social cleavages andconflicts, as well as the societal bases of state power, helps explain the possibletrajectories of conflicts and the ways in which interventions are likely to affectthese conflicts.14

    This brings us to the issue of capacity. It is clear from the critique of theneoliberal and neo-Weberian institutionalist approaches above that the notionof capacity that they employ is problematic for explaining conflict. In bothvariants, conflict is understood essentially as an outcome of low state capacity,itself theorized in objective and technical terms. The relationship betweensocial and political conflicts and capacity deserves, however, much greaterattention than what the institutionalist approaches afford it. Institutionalcapacity develops in an environment of social conflict, and rather thanrepresent the ability of institutions to perform certain pre-given functions itdenotes their capacity to promote certain interests while effectively margin-alizing opposition. But this is not merely a technical skill it is based onparticular political and ideological environments formed in the context ofparticular patterns of economic development.

    Shahar HameiriFailed states or a failed paradigm?


  • The social conflict framework is useful for two primary reasons. First, this isin direct response to the neglect of the existing literature to theorize therelationship between capitalist development and conflict a perplexingomission considering that state failure is widely seen as a problem of stuntedpolitical and economic progress to which development is the only long-termsolution. Crucially, the forms of intervention propagated by the failed statesliterature involve processes that attempt to influence or shape the distributionof wealth and power, whether this is deliberate or not. When interventions donot manage to alter the underlying power structures, as in the case of the IMFsinvolvement in post-Soeharto Indonesia, having a different set of institutions democratic instead of authoritarian does not change the nature of statepower, although the institutional setting does affect the strategies used bypowerful interests to pursue their goals (Robison and Hadiz 2004).

    Second, this approach is able to transcend artificial dichotomies reified bythe institutionalist literature between state and society, formal and informalinstitutions, and traditional and modern institutions, to identify broader socialtrends. Not only is the neoliberal and neo-Weberian institutionalist literatureunable to break free from these binaries, the very conceptualization of capacity,so crucial to their notion of the state and state failure, depends on them.15

    The travails of the Australian-led intervention in the Solomon Islandsdemonstrate well the inability of the dominant theories to provide suitableprescriptions to states in crisis, as well as the ways in which a social conflictanalysis furthers our understanding of the roots of the problems afflicting suchcountries. Operating broadly within a neo-Weberian institutionalist framework,Elsina Wainwright (2003: 18) has tied contemporary state fragility in theSolomon Islands with the failure of the former colonial British administration tobuild the institutions of the modern state properly by the time of their 1978departure. This weakness combined, she says, with entrenched Melanesianinstitutions fundamentally incompatible with the requirements of modernstatehood, such as wantoks (kin groups) and bigmen (Turnbull 2002), toundermine state authority even further, leading to its near-failure before theJuly 2003 intervention. The pre-intervention state, she argues, was corrupt,inefficient and incapable of providing economic development and services to thecountrys mostly provincial populace. This weakness of the central state, saysWainwright, was also the pretext for the emergence of disaffection and violentconflict in the late 1990s. She subsequently prescribes external state building, ledby the regional superpower Australia, as the best possible solution to theSolomon Islands crisis. State building, in this view, involves strengtheningSolomon Islands institutions of bureaucratic, political and economic governance.This is to ensure that the short-term gains of improved security and economicgrowth engendered by the presence of an intervention force are sustained in thelonger term.

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  • The problem with these prescriptions is their assumption that stable politicalparties and functioning central bureaucracies could be willed into existenceoutside of social conflict (Chaudhry 1997: 10). Indeed, the difficult experiencesince July 2003 of RAMSI in the Solomon Islands suggests that state-building isnot merely a technical problem. In the Solomon Islands, patterns of economicdevelopment dating back to the colonial era have been instrumental in shapingthe nature of political governance as well as that of social conflict. The countryhas an export-oriented economy that relies on the extraction of primaryresources by large-scale operations owned by multinational corporations,operating usually on customary lands. This economic structure left the domesticbourgeoisie relatively weak. On the other hand, the state became the key topersonal wealth accumulation through rents extracted from logging and mininglicences and other forms of taxation and revenue. Under these conditions, and inthe absence of wide ethnic cleavages, no social group or class were able todominate the state. Political cohesion was thus maintained, throughout most ofSolomon Islands years as an independent state, by the distribution of stateresources via dense and complex patronage networks permeating all levels ofsociety down to the local villages. This arrangement allowed for some wealthaccumulation by state elites, but also co-opted local and provincial leaders.

    The scope of this article does not allow for an in-depth analysis of how and whythese patronage networks came to be challenged prior to the 2003 intervention. Ihave written about this, as well as on other issues pertaining to crisis andintervention in the Solomon Islands elsewhere (Hameiri 2007). However, for ourpurposes, it suffices to say that it is impossible to understand politics in theSolomon Islands without recognizing the crucial relationship between nationalpolitics in Honiara and localized conflicts over resource allocation anddistribution. The policies that RAMSI has attempted to implement underminethe interests that have benefited from patronage, but in the process marginalizelarge swathes of Solomons society without providing an alternative coalition ofinterests powerful enough to offer national leadership (Hameiri 2006). Hence, onecould argue that although the capacity of the Solomon Islands state to performstate functions in the neo-Weberian and neoliberal sense has undoubtedlyimproved since the commencement of the 2003 intervention, its capacity to absorband mitigate social conflict has not improved in the same way.


    The inability of the extensive Australian-led intervention to ameliorate conflictin the Solomon Islands by building the capacity of the state serves as a timelyreminder for the limitations of the dominant approaches to state failure. As wehave seen, despite some distinctions between the neoliberal institutionalist and

    Shahar HameiriFailed states or a failed paradigm?


  • the neo-Weberian institutionalist camps, both define state failure in terms ofstate capacity. State capacity is viewed in objective and technical terms thatmask the political nature of projects of state-building, as well as abstract thedynamics of crisis and social conflict from historical patterns of statedevelopment and their relationship with modes and patterns of capitalisteconomic development. As a result, the institutionalist literature focuses onmeasuring and improving the functionality of institutions and remainsconstrained by unhelpful dichotomies such as statesociety, formalinformaland traditionalmodern, which are drawn along institutional lines. A moreuseful framework, I have argued, has to focus on a system-level analysis,examining social and political conflicts and the ways in which social cleavages,pertaining to historical patterns of economic development, relate to the stateand to state institutions. The need for such a framework is sadly apparent whenone examines the patchy success record of state building interventions, whichattempt to build institutional capacity as if this is a separate issue to power andinterests.


    I thank Garry Rodan, Kanishka Jayasuriya, Andrew Rosser, Toby Carroll, the editors and three

    anonymous reviewers for their useful comments on earlier drafts of this article. Responsibility for

    the final version is, of course, solely mine.


    1 Examples include the Australian Strategic Policy Institute, an independent, albeit Australian

    government-funded think-tank, that published an important paper Our Failing Neighbour:

    Australia and the Future of Solomon Islands (Wainwright 2003) in June 2003. This report played

    an important part in the Australian decision to intervene, according to Australian Foreign

    Minister Alexander Downer (2003). Also noteworthy are: the AusAID-funded State, Society

    and Governance in Melanesia Programme at the Australian National University in Canberra

    ( one of the main sources of theoretical and empirical

    knowledge on that region for Australian government departments; the DfID-funded Crisis

    States Program at the London School of Economics (; and the

    DfID-funded Institute of Development Studies in Sussex.

    2 In fact, because of the close relationship between policy and theory, the failed states literature

    has ironically developed in a different trajectory to that of state theory. The failed states

    literature is primarily concerned with problem-solving and not with relating notions of state

    failure to the state of the art in state theory. For a comprehensive examination of past and

    contemporary trends within state theory, see Hay et al. (2006).

    3 This eclecticism is particularly pronounced, but not exclusive to, neoconservatives. This is

    because they tend to oscillate between the desire to create liberal-democracies and the utility of

    strong states for the war on terror and other immediate security concerns (Rodan and Hewison


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  • 4 This is particularly in relation to the capacity of well-functioning state institutions to reduce

    transaction costs and infuse stability and predictability in markets.

    5 The definitions of good governance within the donor literature are numerous. While

    the World Bank (2002: 99) and the IMF (Camdessus 1998) avoid issues pertaining to political

    governance and regime type, donor states have tended to include the existence and

    proper functioning of democratic institutions within their definitions of good governance

    (AusAID 2000; USAID nd . Critics argue that because good governance fosters a techno-

    cratic notion of institutions and politics, it is highly problematic. This is for a number of

    reasons: first, it permits the suppression of dissent as bad public policy; second, the

    depoliticization of economic development makes implementation extremely difficult and third,

    the negative effects of marketization has on the most vulnerable are ignored (Soederberg 2001;

    Harrison 2004).

    6 See Burnside and Dollar (1997) for example.

    7 Neoliberal ideology is based on neoclassical economic theory, however neoliberals preference

    for market relations is normative and not based only on functional or technical considerations.

    As Rodan et al. (2006: 3) point out: This is a statement about a preferred set of power relations

    and institutional forms.

    8 Darby and Lothian (1982: 44) noted, however, that while monetary controls were

    tightened in Thatchers early years, no similar progress was made on the privatization

    and fiscal controls fronts. This was largely due to the powerful resistance these reforms


    9 Regrettably, the scope of this paper is too narrow to provide a detailed account of the origins

    and pathways of this ideological transformation (cf. Toye 1987).

    10 Of course, democracy was not a concern of the World Bank or IMF, but during the 1980s and

    1990s it came to be seen by policy-makers in the West as conducive to sustained economic

    growth (Shattuck and Atwood 1998). Some critics argued that the form of democracy promoted

    was only low-intensity democracy, designed to allow conservative US-friendly elites to protect

    their privileged positions (Gills et al. 1993).

    11 Indeed, there is a sizable literature on the resource curse. As the argument goes, without good

    governance and capable institutions, civil wars often take place in resource-rich countries, such

    as the Democratic Republic of the Congo, Liberia, Sierra Leone and Angola, rather than in

    resource-poor ones. This is because there is more to fight over and more resources to

    help insurgents sustain the fighting (Ross 1999; de Soysa 2000). While challenging this

    literatures tendency to seek mono-causal explanations to conflict, Heupel (2006), nevertheless

    has found a substantial link between rebels access to resources and the success of external


    12 The state is not the only institution donors have supported in recent years. They have supported

    decentralization in countries such as Indonesia to increase transparency and accountability.

    Efforts have also been made to promote civil society organizations that are sympathetic to

    reform and other groups and organizations that can create a demand for good governance.

    13 This resonates with Gramscis (1971) notion of an organic crisis.

    14 Bellin (2000) and Rodan and Jayasuriya (2006) argue persuasively that structural relations help

    explain the trajectories of processes of democratization. Bellin (2000), for example, argues that

    contrary to the expectations of modernization theorists, the bourgeoisie and the middle classes

    only champion democratization when it is in their material interests. In this view, democracy is

    not the existence and proper functioning of democratic institutions, but a regime with

    identifiable societal powerbases.

    15 Indeed, Bob Jessop (1990: 287) has already pointed out the artificial distinction between state

    and society as one of the main flaws of neo-Weberian state theory.

    Shahar HameiriFailed states or a failed paradigm?


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    About the Author

    Shahar Hameiri is a Postgraduate Researcher, Asia Research Centre, MurdochUniversity. He is preparing a dissertation on State Building or SocietalTransformation? Regulation and Conflict at the Fringes of the Global Order.

    Shahar HameiriFailed states or a failed paradigm?



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