Here we go again… State capacity is generally defined as the ability of the state to fulfill its intended policy aims. Yet, how to precisely conceptualize and measure state capacity has been one of the most debated topics in historical political economy. To illustrate the challenges with this definition, let’s consider a state that has invested in the size and training of its public sector workforce, which should enhance its state capacity. However, the goals of the state’s leaders are at odds with the long-term, institutionalized objectives that public sector employees hold dear. This creates a conflict between leadership and bureaucrats over state output. Should this state be characterized as having a high capacity to achieve its intended ends? And which are the appropriate policy goals to examine in order to evaluate this state’s capacity?
In a forthcoming article in the JOP, I ask whether state capacity should emphasize the transient goals of state leaders or focus on the more durable missions of bureaucratic agencies. Arguing for the latter, I also integrate prevalent features of public administration and bureaucratic politics, such as principal-agent relationships and social norms, in considering the implications for government output and long-term capacity. By doing so, I aim to address a common shortcoming in the state capacity literature: state capacity is too often treated as a “black box.” State investments and policy choices are inputs, and realized government policies are outputs; yet, the internal process is left obscured or oversimplified (e.g., Besley and Persson). As a result, our conceptual framework of state capacity has become imprecise, occasionally leading to ill-fitting empirical measures or incompatible theoretical conclusions.
To address this weakness, I argue that we must clarify how we conceptualize state capacity. As a first cut, we should be precise about what we mean (or whose interests we capture) when we specify the intended aims of the state. Second, rather than abstracting from it, we should crack open the black box to more closely examine the process of transforming state inputs into realized government outputs. By taking into account, for example, the role of bureaucratic culture in shifting state output, we can better understand when critical factors such as investments in the public sector workforce effectively enhance state capacity. I refer to this tactic as an “endogenous approach” to state capacity.
Opening the black box
I am far from the first person to critique state capacity. Excellent Broadstreet posts by Pavithra Suryanarayan, Volha Charnysh, Scott Gehlbach, Mark Dincecco and Yuhua Wang, among others, have sieved through multitudes of measures and approaches to state capacity to reveal their limitations.
Critically, several recent studies have taken what I term an “endogenous approach” by identifying factors that alter the link between investment in the state and its policy outcomes. These include accounting for factors such as the role of identity and ethnicity of citizens and bureaucrats (Charnysh 1, 2; Suryanarayan 1, 2; Balán et al.), national culture (Besley), social networks (Wang), or the form of rule (Garfias and Sellars). Additionally, Charnysh argues that there has been a dearth of scholarship on how cultural norms shape state capacity. My article aims to address the gap that Charnysh raises, even as it asks us to reevaluate how we define the goals of the state in the first place.
Organizational hierarchy and norms
One of the clearest shortcomings of treating state capacity as a black box lies with neglecting organizational dynamics that surely affect government processes and ultimate policy outcomes (a criticism raised by Williams). This is characteristic of the frequent disconnect between the innerworkings of bureaucratic capacity (or infrastructural capacity, to use Michael Mann’s term) and state capacity.
To address how organizational concerns shape state capacity, my article examines how top-down changes to the goals of an organization, initiated by its leadership, shape both the policy implementation and the composition of the bureaucrats who staff it. The theory highlights how shifts in social norms and the culture of an agency can alter the output of the state and, critically, who participates in government. This argument is captured by a formal model that details a two-level principal-agent hierarchy: lower-level workers implement policy and are managed by supervisors. The organization is directed by a leader who can attempt to redirect the agency’s goals by altering career incentives (see Figure 1).
United States Environmental Protection Agency
Consider, for instance, the U.S. Environmental Protection Agency. Suppose it is led by a political appointee who seeks to radically undermine environmental regulations, as has been the case under several recent presidential administrations (most notably under the leadership of Anne Gorsuch Burford in the early 1980s and, more recently, under several Trump appointees). This objective is at odds with the agency’s legislated mission and with the goals of most employees, many of whom likely joined the agency because of a commitment to environmental protection. In order to divert the organization from its mission of environmental regulation, the appointee must not only lead employees to act against their preferences, but also combat prevailing norms within the agency that establish what is considered acceptable behavior among bureaucrats.
This tug-of-war can affect the agency’s immediate policy output but will also impact its long-term capacity to enforce environmental regulations. This is because the disruption implemented by the leader may alter the composition of the agency’s workforce by driving capable, mission-driven employees out of the public sector while discouraging similarly qualified employees from joining. As a result, the leader alters not only short-term performance but also the state’s ability to achieve its legislated goals. As highlighted in the article, implementation of environmental regulation suffered not only during Administrator Burford’s tenure but for years following. The agency essentially had to reset itself once under new leadership, realigning its practices toward environmental protection and rehiring mission-driven employees.
Figure 2 illustrates this potential consequence. The relative desirability of leaving the public sector is on the vertical axis and the initial proportion of government supervisors who care deeply about their agency’s mission (as opposed to, for instance, their own career advancement) is on the horizontal axis. In the yellow region, norms within the agency that pressure employees to produce mission-aligned policy output are relatively weak. However, it is not worthwhile for employees to leave, which leads employees to produce output “temporarily” misaligned with the agency’s institutional mission. In the green region, strong norms may manifest in outright resistance by employees to policy changes implemented by leadership misaligned with agency goals. Here, the agency’s output continues to align with its institutional mission. In both cases, the latent capacity to implement policy that is consistent with the agency’s mission is unchanged because mission-oriented employees remain part of the agency. However, in the blue region, such employees leave for the private sector, eroding the capacity for the agency to fulfill its mission in the long-term. This finding echoes research by Suryanarayan and White, which calls attention to the underexplored phenomenon of state capacity erosion rather than enhancement.
Clarifying our aims
The study addresses “mission” rather than “state” capacity to distinguish it from the typical focus within state capacity on the goals of leaders. The latter approach, which is characterized by frequently shifting goals as leaders change, is arguably appropriate for non-democratic settings prior to the twentieth century. However, it fits less well with Weberian bureaucracies, which are characterized as neutral, meritocratic, and often have stable missions. In these circumstances, should the “aims” of the state be determined by current politicians, public sector leaders, or organizational missions set by past legislation? Given the long-term perspective emphasized by state capacity, I argue for prioritizing organizational missions that ensure continuity across political regimes (while allowing new legislation to shift these objectives). This approach works well over the past century as a barometer to measure if an advanced industrialized nation’s capacity to achieve its core goals has shifted. Thus, I argue that norms can protect both mission capacity and overall state capacity from radical shifts. Whether this approach or one focusing on the goals of leadership is the correct tactic likely depends on the HPE setting. Regardless, what is crucial is to clearly specify what we mean by the goals of the state.
Overall, state capacity is an appealing concept that we return to again and again because of its simplicity and explanatory power. While nuances are inevitably lost in favor of abstraction, by delving into the endogenous determinants that shape potential and realized government output, we can gain a fuller picture of state capacity. Additionally, by being clear about the goals that state capacity addresses, we can facilitate the accumulation of knowledge about the factors that shape state performance. My study seeks to take this approach by focusing on institutional goals and investigating the organizational dynamics that determine when the state can achieve these ends. Regardless of the approach, if we remain clear about the goals and the mechanisms at play, state capacity will remain a valuable common measure that cuts across subfields and disciplines to uncover tangible insights into the factors shaping the enduring capacity and performance of the state.
Header image: “The tax-collector’s office” by Pieter Brueghel the Younger