State Building: Governance and World Order in the Twenty-First Century
by Francis Fukuyama
London: Profile Books, 2004, 193 pp. ISBN 0-8014-4292-3

Fukuyama has done it again. The social scientist from Johns Hopkins University in Baltimore certainly has a knack for identifying the big issues, framing them, and setting the agenda for learned discussions across the international community. He broke into the scene over a decade ago with The End of History and the Last Man (1992), chronicling, in Hegelian fashion, the definitive triumph of liberal democratic regimes over totalitarianism.
Then came Trust: The Social Virtues and the Creation of Prosperity (1995), The Great Disruption: Human Nature and the Reconstruction of Social Order (1999) — with an overt reference to the damage wrought by the birth control pill, and then Our Posthuman Future: Consequences of the Biotechnological Revolution (2002). Now comes this volume on state-building and governance, meant to influence the way institutions develop.
Leviathan, Thatcher and Reagan
Modern politics was conceived primarily for the purpose of taming state power. During the first half of the 20th century, several attempts at a welfare state ended up producing Leviathans of both the right (Nazism, fascism) and the left (Communism). These regimes abolished civil society and subjected atomized individuals to self-serving political ends. They also reduced citizens to penury.
Hence, when the call led by Thatcher and Reagan for cutting back the state to its minimalist liberal form first sounded in the 1980s, it was a welcome one, apart from obvious economic reasons. This call later found an echo in the Washington Consensus – the triumvirate of the IMF, the World Bank and the US Government – which assumed the task of spreading the neo-liberal gospel of free markets among developing countries.
It did not take too long, however, for citizens of these countries to be overcome by feelings of deception and disillusionment with the reforms. What arguably was good for the economy did not turn out to be so either socially nor politically. Neo-liberalism seemed to renege on its promises, but it succeeded in weakening the state, leaving it at times a dismal failure.
The 9/11 wake-up call
September 11, 2001 woke the whole world up to the dire consequences of failed states. Their inability to secure their territories converts them into havens of terrorist groups, such as al-Qaeda in Afghanistan, or into plantations and processing centers of harmful drugs, such as the hinterlands of Colombia.
The incapacity of these states to provide basic services in health and education provokes dreadful pandemics, as in the case of AIDS in large parts of sub-Saharan Africa. And their sheer lack of operationality makes them prone to triggering widespread human rights abuses and major humanitarian crises in cases of internal conflict due to ethnicity (Rwanda, Burundi), religion (Bosnia, Kosovo) or a mixture of both (Sudan).
What is the reason behind state failure? For Fukuyama, it comes from a confusion of state strength and scope. By rolling back the size of the state to promote economic growth, many countries have neglected to support some very important and necessary functions of the state. These range from defense, law and order to the ability to policies on competition, wealth redistribution, social welfare, and so forth.
As Milton Friedman acknowledged in a 2001 interview, referring to the privatization mantra that he helped spread a decade earlier, “I was wrong. It turns out that the rule of law is probably more basic than privatization.” How to remedy this present situation is the daunting task that the Fukuyama sets for himself.
Rebuilding states
Fukuyama articulates his reasoning in three main sections. The first constructs a framework for understanding the different dimensions of “stateness”, and the academic disciplines under which each belongs: organizational design (management, public administration, economics); institutional design (political science, economics, law); basis of legitimization (political science); and sociocultural factors (sociology, anthropology).
When it comes to transferring state-building expertise from one country to another it is clear that governance, or institutional capacity, does not travel as easily as financial capital, raw materials or industrial equipment.
It is odd, nevertheless, that Fukuyama’s focus in state-building continues to be narrow, economic growth, rather than integral human flourishing within a wider, political context. This leaves the reader with the impression that an important lesson has been missed.
How to organise?
Given these components, what is the best form of organisation of a state? Conventional approaches are overly dependent on doctrines from the private sector. That renders them hostage to neo-classical assumptions about economic actors: individualism, utilitarian self-interest, unresolvable conflicts of interest in collective action, propensity for shirking — assumptions put in doubt by a more enlightened perspective on the human being.
Attempts at a scientific status for public administration are also plagued by ambiguity of goals, excessive emphasis on formal systems of monitoring and accountability, and powerlessness regarding delegated discretion.
As Fukuyama notes, a large part of these public administration quandaries arise from the pursuit of an objective, value-neutral technique of public administration independent of the moral qualities or virtues of actors. Such a bias yields only external, procedural rules which soon prove ineffective.
Globalisation and what comes after
The final part considers the difficulties that surface in the international community from the continuous erosion of state sovereignty. The discussion pits the unilateralist US view on nation-building against the multilateralist European one. Each side is heavily influenced by its own historical experience of the nation-state.
Americans view the nation-state as the only legitimate form of democracy, one that should basically serve the individual. By contrast, Europeans see the international community as guardian of universal principles of justice, and they also believe that individual interests should be subject to those common to the state.
The US is now the world’s only superpower, with the European Union a very distant second. Fukuyama adopts the role of Solomon by affirming that although Europe may be right in theory, it is nevertheless wrong in practice, because ideals will always need to be embodied – however imperfectly – in institutions. And such institutions will always have to rely on substantial enforcement power – formerly the exclusive competence of states – for their effectiveness.
In effect, we have become witnesses to the twilight of state sovereignty in the past quarter of a century. Perhaps that is what globalization really means. What comes after has been, up until now, nothing but a mysterious void. The time has come for a healthy realism to take over: neither the optimism of declaring the state to be the greatest good on earth, nor the pessimism of pronouncing it the greatest evil.
The state, a strong state, is a necessary, albeit lesser good for human flourishing. But determining the right mix of strength and scope demands something more than organizational theory and economic planning. Above all, it requires the moral regeneration of statesmen and leaders.
Alejo José G. Sison works at the Philosophy Department and the Institute of Enterprise and Humanism of the University of Navarre. ajsison(at)

Alejo José G. Sison teaches ethics at the University of Navarre and Georgetown. His research focuses on issues at the juncture of ethics, economics and politics from the perspective of the virtues and...