The interest in state-building in post-colonial development thinking is relatively new. Historically, the need to ‘build states’ has received less attention than the need to build effective markets to generate wealth, or build effective political institutions to deliver democracy and respect for individual rights. Since the 1990s, however, there has been a stronger focus on the role of the state in development. There is, for example, a wider recognition – perhaps even a general acceptance – that ‘governance matters’ for development, and that patterns of state/society interaction will shape overall development outcomes.

As part of this discussion, some commentators have tried to reconceptualise what ‘development’ means to emphasise that it must include an increasingly sophisticated bureaucratic capability alongside traditional conceptions of greater economic output and more inclusive political institutions. ‘State weakness’ – an inability of the state to deliver basic public goods or undertake essential functions – is increasingly seen as a key challenge for global development. The problem of ‘state weakness’ is often expressed in the concept of a ‘failed’ or ‘fragile’ state, defined as states that are unable – or unwilling – to protect their populations from insecurity, to foster economic development or deliver basic public goods. For some thinkers, fragile states represent the central problem of development in the modern era.

This report aims to provide practitioners with an accessible guide to the existing academic and policy literature on the relationship between fiscal governance and state-building.