This paper is intended as a contribution to a dialogue about the role of the state in promoting development and about what the international aid community can (and cannot) do to help build stronger, more effective and better governed states in the developing world. It draws together academic research and recent evidence on the role of the state in developing countries and reviews how the current aid system interacts with states. It analyses the key issues raised in the Paris Declaration, but also points to problems in the aid system which lie beyond the Declaration's remit. Based on this, it brings forth a number of policy implications for international assistance.