World development report 1997 : the state in a changing world

TLDR

The World Development Report 1997 examines the evolving role of the state in development, noting that many governments are reducing market interventions after failed state actions. The report argues that an effective, rule‑of‑law‑enforcing state is essential for development, opposing minimalist governance and advocating a facilitator role for private enterprise. It proposes a state‑reform framework that first aligns state activities with its capabilities and then revitalizes public institutions to enhance those capabilities. Illustrations of successful and unsuccessful state reforms demonstrate the framework’s relevance.

Abstract

This is the twentieth in the annual series assessing major development issues. The report is devoted to the role and effectiveness of the state: what it should do, how it should do it, and how it can improve in a rapidly changing world. Governments with both centrally-planned and mixed economies are shrinking their market role because of failed state interventions. This report takes an opposite stance: that state's role in the institutional environment underlying the economy, that is, its ability to enforce a rule of law to underpin transactions, is vital to making government contribute more effectively to development. It argues against reducing government to a minimalist state, explaining that development requires an effective state that plays a facilitator role in encouraging and complementing the activities of private businesses and individuals. The report presents a state reform framework strategy: First, focus the state's activities to match its capabilities; and second, look for ways to improve the state's capability by re-invigorating public institutions. Successful and unsuccessful examples of states and state reform provide illustrations.