Free Political Order and Political Decay by Francis Fukuyama

a spectrum of state functions from minimal to activist in which modern governments can engage.

    FIGURE 3. The Scope of State Functions
    SOURCE : World Bank, The State in a Changing World
    But while many contemporary political arguments concern how far state intervention should go, there is an equally important question about state capacity. Any given function, from fighting fires to providing health services to undertaking industrial policy, can be done better or worse depending on the quality of the state bureaucracy charged with performing that function. Governments are collections of complex organizations; how well they perform depends on how they are organized and the resources, human and material, at their disposal. In evaluating states, then, there are two axes of importance, a horizontal axis defining the scope of state functions, and a vertical axis defining the capacity of the state to undertake a given function (see Figure 4 below).

    FIGURE 4. State Scope and State Strength
    There are a number of rough measures for how far out on the horizontal axis a given state is. The one most typically used by economists is the proportion of total GDP taken in through taxes; alternatively, one could measure public spending as a proportion of GDP since that amount is often larger than taxes and covered by borrowing. These measures are not wholly adequate, however, since some activist functions, like regulation and industrial policy, have large impacts on society without necessarily affecting fiscal policy.
    MEASURING THE QUALITY OF GOVERNMENT
    Measuring the strength or quality of the state—that is, its position on the vertical axis—is far more complex. Max Weber famously identified a modern state with a set of procedures, the most important of which had to do with the strict functional organization of offices and the selection of bureaucrats based on merit and technical competence rather than patronage. 4 Some of Weber’s criteria are not necessarily conditions that we would today accept as necessary for good bureaucratic functioning, such as the office constituting a lifetime career and the need for strict discipline and control through an administrative hierarchy. The idea, however, that bureaucrats should be chosen according to their technical qualifications and promoted on the basis of merit rather than through personal connections is both widely accepted and correlated with positive governance outcomes like low corruption and economic growth. 5 Whereas Weber highlighted bureaucratic form, political scientist Bo Rothstein has suggested the use of “impartiality” as a measure of government quality, a normative characteristic that he argues correlates strongly with efficient performance. 6 Conversely, one could also assess the quality of government through measures of dysfunction, such as perceived levels of government corruption like Transparency International’s Corruption Perception Index. 7
    Measuring the strength of government through procedures alone is unlikely to capture its real quality, however. Weber’s classic definition assumes that modern government is a rigid, rule-bound institution that is mechanically tasked with carrying out the functions set it by the principal. But in fact procedural rigidity, rather than being a virtue, is at the core of what people dislike about modern government. Weber himself spoke of bureaucratic administration as an “iron cage” in which people were trapped. 8
    An alternative method to a procedural approach is an assessment of the capacity of a government to formulate policies and carry them out, or what Joel Migdal calls the ability of a state to “penetrate” the society over which it presides. 9 Capacity, in turn, is defined by a number of factors, including the size of the bureaucracy, the resources at its disposal, and the levels of education and expertise of government officials. Some scholars use the rate at which a government can