# 212: BOOK OF THE WEEK — “State-Building: Governance and World Order in the 21st Century”
Story behind the Book Choice
Today’s book choice is related to a research idea. It is not even an idea anymore, it is a plan now. I have not read Fukuyama that much — or not at all, actually. But today was the right time. The book brought a breakthrough for my thinking. The subtitle is not that relevant, actually. Even the title is a bit confusing. Yes, the book is about state-building but it deals with state-maintenance just as much. In sum, I would say it is a brilliant and concise summary of the relevant literature on governance throughout history, including the keywords of bureaucracy and globalization.
- Big and small government
This passage appears in the introduction and it sheds light on an overarching theme that is very important as a frame of mind for the entire book. The question of a strong or weak government is as old as government itself. But when I read the passage in this book on state-building in the present, I immediately noticed that we might live in a time now when these opposites do not hold anymore. Maybe we have come to a moment in history where neither “strong” nor “weak” or “big” and “small” are appropriate descriptions anymore. Rather, there is a possibility that both are possible simultaneously. Fukuyama introduces the concepts of strength and scope for this and I do think that this structure and related models are helpful.
The result for Fukuyama, to already anticipate the ending, is the trend towards small and strong. That made me think of startups, of course, and of all alternative institutions and governance models out there. I am deeply convinced that we live in an age when the design and the workings of our existing structures have come to an end. Our institutions have failed us but some do not want to see it and others who have been seeing it for a long time are still experimenting with alternatives. Sometimes, this trial-and-error learning leads them back to the “old” institutions which makes me wonder if we are reinventing the wheel or if we really are at a breaking point because the way in which technology is working now is really unprecedented.
2. Cultural context
There are two crucial thoughts in this short paragraph. I am going to start with the latter one which is the Weberian model. The prominence of Weber in the book, as a reference point, made me aware again of how much bureaucracy is still the norm. We do not have many other options on the state level, except for chaos and failed states. But the context in which bureaucracy in the Weberian tradition it is mentioned here also makes it clear that this European model has in fact precursors in many other regions in the world, e.g., Asia. And this takes me to the next and from my perspective even more crucial issue: culture.
Our institutions are bound to the cultural and historical circumstances and this is something that classical economics have traditionally ignored. If you look at the curricula of business schools in the present, you could still argue that this finding is not being taken seriously. The idea of the rational agent, which Fukuyama goes into deeply in many other passages, has been outdated for a long time in theory. In practice, scientists are holding on to it as if it where the end of economics if you gave it up. This is exactly where the perspective of other disciplines, particularly the humanities, can create value — if they decide to participate in these debates, of course. So far, there is a long way to go.
3. Demand for institutions
This passage about institutionalization as the consequence of a demand was really striking to me. Especially in Germany, we seem to have a culture in which “let us found an institution to take care of a problem” thinking seems to have become an immanent part of culture — one that is not very helpful. The idea that there needs to be a demand for an institution, a need, puts insitutionalization into a market logic; a fruitful one, actually. It takes us back to history and the early beginnings of democracy. Political formations come into existence as soon as societies feel the need for order, structures, and, above all, rules.
The joke that Fukuyama recalls about the student and the economist puts the lid on the irony. The economist’s behavior stands for the automatism that especially scientists have in mind according to which there is a theory about an economic logic and this logic represents human truth. We know that this is not the case. The only way that we can start understanding how much is in-between the “rational” and the completely “non-rational” actor is by looking at individuals in all their complexity more closely and to complement our “models” with these insights. It is not an either/or but a both/end approacht— this also applies to state-building as Fukuyama presents it.
Reflection Questions
1) Does your country have a small or a big government? Has that changed historically?
2) How do you think about the concept of bureaucracy?
3) Do you believe in a political world order beyond nation states? Where do you see examples?