The State, Society and Development: Competing Theories


The theoretical concern on the state has been stimulated by the important role the state plays in the governance and development of society. The state emerged out of society as a historical construction, which has been largely associated with the compromise of national ruling class with the society and accepted by the social forces as a credible, legitimate and acceptable governing institution. It is important to bring insights of various theories of the state into this analysis and concretize the study in the light of those theories and approaches. The state, or more concretely, public order and administration, is the capacity for effective political action in the society. One of the central characteristics of a state is its sovereignty which espouses the idea of jurisdiction over territory and population inhabiting it as societies. The society is defined as an “ensemble of systems of action” wherein power is dispersed and relocated to the field of symbolic struggles over the control of historicity: that is, the cultural, cognitive, economic and ethical models by which a collectivity produces a culture” ( Touraine, 1988:30-40). State power depends ultimately on the acceptance of its authority by the stakeholders of society such as families, communities, voluntary associations, religious associations, business enterprises, research institutions, media, local governance institutions and the nation.

Ferdinand Tonnies while studying the rise of capitalism, modernity and the modern nation-state, elaborated two distinctly ideal concepts Gemeinschaft (inherited community) and Gesellchaft (self-chosen society and association). To him, rural communities are governed by folkways, religion and tradition rooted in the family while urban communities are based on rational self-interests, laws and social contracts. Acutely aware of the maladjustment of conservative elites caused by individual rationalism and capitalism he strongly supported the “organic solidarity” of labor movements. Emile Durkheim rejected the individualist basis of society made by a “contract” between individuals and argued that the norms that govern contracts are embedded in a social solidarity—mechanical and organic, the former refers to primitive society with little division of labor while the latter includes highly specialized division of labor. To him, society is prior to individual and, therefore, cannot be reduced to individual’s psychology. In this context, the ability of the state to promote public goods and services, resolve conflicts and command loyalty and compliance of citizens depends very much on how it is embedded in the midst of society, a society that “finds its unity in the political life and organiza-tion of the state” (Habermas, 1996: 1). This view holds that the society is centered in the state and, consequently, the state balances the general and particular interests of society, between economic and civil society and keep the pressure of social diversity and social complexity in manageable proportion. The development of market requires the formulation of rule of law by the state so that the entrepreneurship and transactions of society can take place.


A number of disciplines have dealt with the theory of the state. “The economic theory of the state regards internal and external protection and the provision of public goods as the central duties of the state. Legal theory discusses the functions for regulating human co-existence in the relevant state and identifies peace, liberty, social security, social integration and cooperation as these duties. Sociological theory established the classic distinction between civil liberties, political participation and social subjective rights—that is, legitimate demands on the state and the modern political economy identifies the political regulation of the market, the provision of a public infrastructure and sociopolitical adjustments as the main functions of the state within the socio-economic sphere” (Zurn,1 999:38).

The profound societal transformation of the Industrial Revolution innovated the notion of citizenship, self-determination of nations and the ideology of nationalism. The emergence of state as distinct organization has been facilitated by its monopoly over the extraction of revenues, standing army, police and bureaucracy as well as other resources from society, expansion of the state organizations, the imposition of state interests and activities, a mechanism (technical, bureaucratic and organizing) for maintaining effective control over the public and private lives of citizens and prevent rebellion. Beefed up by the ideology of mercantilism associated with protectionism and economic nationalism, the “reasons of state” subordinated the society and economy and formulated public policy on the basis of political determination of economics. Economic nationalists hold the primacy of national interest as opposed to class interest as Marxism believed or competing group interests as liberalism claimed. Marxists doubt on the homogenous formation of “national interests” and make distinction between the particular interest of “political regime” and general interests of all the citizens. To them, national interests often conceal some very specific interests because homogeneity usually occurs within classes, not states. Liberals claim that an increase in the scope of state’s power has produced proportionate decrease in its authority. For example, the rights of citizens against the state entrenched in the idea of democracy and development of humanitarian norms, including international law, softened the absolute power of the sovereign to encroach upon citizens’ lives. The traditional division of labor in society and its hierarchical control which enhanced the political equilibrium of state are facing the pressure of horizontal forces such as market, civil society, solidarity associations based on language, memories, affinities, region and communities and sovereign citizens who know they are the authors of law and the state power has to circulate at their will. The frame of reference of “development” also fundamentally altered from the historical notion of “liberation from oppression,” “individual rights,” “entitlements,” to newer concepts blended with “social opportunities” deemed essential for the self-realization of people in a sustainable manner.


Today, statehood comprises three critical dimensions: “recognition, resources and the realization of governance goals. Statehood in the national constellation was characterized by a convergence of all these three elements in one political organizations, that is the nation-state” (Zurn, 1999:2). It is inaccurate to use the terms “nation ” and “state” as interchangeable. “The state, in the modern sense, implies a population that occupies a definite territory, subject to a government that is accorded sovereignty and has a regime recognized as legitimate by other states…while the nation is a large social grouping whose people share common customs, language, heritage, and a sense of group identity” ( Lopez and Stahl, 1989:7). In the “pluralist conception, the state itself is equated with the ‘political system’ and as such becomes the main focus of democratic political pressure.


Johan Galtung, for example, talks about balanced development. He says: “ If development is the progressive satisfaction of needs of human and non-human nature, then the problem of environmental degradation becomes a priority. Three propositions are relatively clear: homo-centric development, whereby human needs are given priority to the exclusion of nature’s needs (or more precisely, non-human nature), a nature-centered development, whereby nature’s needs are given priority to the exclusion of human needs; and homo/nature-balance development, whereby some compromise is struck” ( Galtung, 1996: 129) Not all states can be labeled as nation-states, for example, some are based on civic nation embodying shared commitments to the constitution and representative government; while others have propensity towards cultural nationhood based on the active conformity of its citizens to shared understanding of national culture, history and civilization; still, some are ethno-national states based on common ancestry, race, religion and institutions. The transnationalization of economy and information technology today has provoked increased ethnic consciousness, emergence of ethnic organizations and ethno-nationalist movements and affecting the base of civic nation-state. The growing ethnic movements are creating new identities and shared interests for “virtual communities” that transcend geography, gender and sociopolitical boundaries.


If society comprises a whole series of interest groups more or less in competition with one another for economic resources and access to political power, then the state’s role is to balance these pressure-group claims in order to secure political and social stability” ( McLennan, 1993:83). Conflicts among various interest groups represented through political parties express a democratic manifestation of the class struggle though with the decline of ideology other social attributes such as age, sex, religion, region, caste and ethnicity are affecting the formation of class. The state essentially means a fixed polity commanding authoritative and legitimately influential roles by which social forces are organized, ordered and regulated. The “legibility of a society provides the capacity for large-scale social engineering, high-modernist ideology provides the desire, the authoritarian state provides the determination to act on that desire, and an incapacitated civil society provides leveled social terrain on which to build” ( Scott, 1998:5). The state system “can likewise be treated as an imagined political community with its own specific boundaries, conditions of existence, political subjects, developmental tendencies, sources of legitimacy and state projects” ( Jessop,1999: 3). The degree of autonomy and legitimacy of the state determines the integrity and stability of the political system. The states are central nexus of governments’ institutions; they are not only repressive and extractive force but also ideological and cultural ones that help shape political culture and collective action. A state, in this sense, marks fundamental distinction from the government; the latter only executes the short-term and long-term programs of the state according to the principles of utility and ensures the conditions of public good that are necessary to the birth of a “shared national community,” linked to the historicity of people residing in a territory. “Historicity helps erode traditional forms of consciousness, linking history with nationalist claims to sovereignty” (Tucker, Jr. 1998:121). In democracies, every state is served by the periodic alteration of governments and the state is more effective in ruling than the government. Sometimes, the state can set itself above and outside the constitution deliberately and detach much of its activities from democratic oversight, especially on questions of national security. “The governments only represent the state, they cannot replace it. A government is not a sovereign body: opposition to the government is a vital activity at the heart of liberal democracy; opposition to the state is a treason” (Taylor, 1985:110). The “arts of state” or statecraft is, however, coterminous with the performance of governance though assuming office of government does not guarantee full access to the instruments of state power. From ancient Athens to today “the historic purpose of democratic government has been to protect the poor from the rich” ( Parenti, 1995: 2), defend people’s needs and not just defend property rights. The decisive thrust toward the consolidation of state can take place only if lower strata of population can articulate claims for participation and build up their own efficient organization. Government refers those units that formulate, execute and adjudicate the laws and regulations according to which the state conducts its domestic and foreign policy. Behavioralist scholars like Arthur Bentley and David B. Truman reduced the process of government to an informal process of more or less well organized interacting groups of society in political competition with each other. Their analysis tended to lay entire stress on processorientation of checks and balances found in society and rules of the game and disregard the role of formal institutions. These groups exert pressure on the government for producing favorable policies to them and they satisfy through incremental adjustments. Interest-based logic of development is becoming more, or less, plausible among the policy-makers in East Asia. “Some combination of markets, bureaucracies and informal mechanism in the pursuit of power and conventional material gains makes sense both to political leaders and to people in the street” (Evans, 1996:5).

David Easton, on the other hand, considers the concept of state superfluous and favors instead the “political system” because, to him, multi-functionality of polity is sufficient to maintain the boundary between the society and the polity. He argues “The reintroduction of this nineteenth-century term (ideologically closely tied to the notion of sovereignty) into the contemporary research lexicon contradicts our frequently expressed desire to increase the clarity of our tools of analysis rather than to compound their obscurities” ( Easton, 1997:2526). Gabriel A. Almond by articulating a plurally functional system rather than self-interested state views “an image of public authority as relatively, or at least ideally, disinterested and managerial, processing inputs into outputs, managing the flow of stimuli into feedback, and guarding good-fences-good-neighbors difference between polity and society” ( Emmerson, 1986: 143). Constitutionalism and comparative politics are considered “system maintaining” theories while Marxism-Leninism as smashers of liberal/ pluralist paradigms. Liberalism’s thrust on the separation of state from civil society is essential prerequisite of a democratic order, provisions of fundamental rights of citizens and the creation of a space for individual autonomy, initiative and creativity including the preservation of other values such as respect for minorities, human rights and democracy. The state is often linked to “civil society,” the whole range of intermediary non-governmental, popular institutions, networks, voluntary relationships, associations and social movements that make up a vibrant public life. Civil societies, as shared enterprises, are organized from below, work for the promotion of public good and are relatively independent of the state and market institutions. The administrative power of the state regulated through political control differentiated itself from the regulation of economic system and thus produced the separation of civil society from both the bureaucratic state structures and the free market institutions. Civil society thus constituted through voluntary participation and spontaneous initiative of people created institutional basis of welfare state politics and the development defined as the realization of human interests without destroying the regenerating capacity of nature. There are several competing theories to explain state-society relations and their contribution to development. Each theory, in turn, has a distinctive set of implications for state policies and societal practices. This study, however, focuses on three major strands: liberal/pluralist, Marxist and political economy— combining both non-Marxist and neo-Marxist schools.

The idea of liberal/pluralists is the “neutral state” that seeks to create a just society, a society that does not impose any particular conception of the good but allows individual citizens to chose competing concepts of the good life according to their own preference. The liberal conception of politics is underlined by three conditions: “first, a specification of certain rights, liberties and opportunities (of a kind familiar with democratic regimes); second, a special priority for these freedoms; and third, measures assuring all citizens, whatever their social position, adequate all purpose means to make intelligent and effective use of their liberties and opportunities” (Rawls, 1996:xlvii). These conditions combine the realization of a state both strong enough to do its job and democratically legitimate to develop subjective and objective rights of the citizens as a basis of social unity. The development of democratic welfare state following the Second World War and Keynesian economic policy while allowing the expansion of capitalism brought the state and economy into democratic scrutiny and enforced social welfare measures to pacify the class conflict in the sphere of production.


The steady development of the “democratic welfare state is directed against those modern relations of power and dependence that arose with the capitalist enterprise, the bureaucratic apparatus of domination, and, more generally, the formally organized domains of action of the economy and the state” (Habermas, 1995:336).

By combining economic freedom and social responsibility, it politicized the formulation of economic policies and beefed up the power of governmental hierarchy by increasing its capacity to regulate market forces as well as protect people from uncertainty. The post-war system in most liberal capitalist states provided the parastatal and bureaucracy a decisive role in governing the patterns of organizational innovation, structural change and a means of exercising power. It invented the concept of “social labor previously subordinated to the unrestricted power of disposition and organization exercised by private owners of the means of production” (Habermas, 1995: 361) and established the legitimacy of high spending for social purposes. Sociologist Daniel Bell popularized the idea of the “end of ideology” as the welfare state and mixed economy achieved pluralist consensus and removed ideological conflict at the national and international level. After the 1970s the Keynesian rationales for state expansion and state management of total demand for goods and services to suit the interest of full employment as the key to capitalist prosperity suffered. It hit the developing countries’ demands for a massive transfer of international loans and then debt repayment. As the economic strength of welfare states became weak, it led to chronic budgetary deficits, distributional conflicts, social movements and the revival of right extremism who were not adjusted to the consensus on welfare state. The authority of the state to define the theory and praxis of development was subsequently questioned. The retrenchment of welfare functions of the states and the spread of laissez-faire, structural adjustment and domestic restructuring following the collapse of communism in Eastern Europe also caused economic, ideological and geopolitical crises and reversed policymakers’ attitude towards government spending. Interventionist state found a lack of supporters as the “primacy of public” marked a paradigm shift to public-private mix and even an increased role for private sector. This also set a trend toward the monetization and capitalization of politics. Big theoretical assertions were made by the proponents of neoliberalism in favor of a minimalist state. This condition even posited problems to the constitutional state and its constituent parts. How to combine the respect for national sovereignty that is still in vogue with popular sovereignty that goes beneath and beyond it? How can a democratic government promote egalitarian rights of citizenship and tolerate class inequalities generated by the operation of free market economy? By implication, how does the state manage an uneasy coexistence of citizenship and class as well as social cohesion and social differentiation? Can a democratic state really coexist with an economy drifting towards globali-zation? It is difficult to answer straightaway. Liberal/pluralist theories regard politics and economics as two separate and relatively autonomous sphere of activities and assume that power and wealth are sought by a variety of social forces, including the state and non-state organizations, civic and private institutions, political parties, social classes and business groups that generate liberty and produce pluralistic goods of free society. An efficient functioning of the market economy and property rights will allow individual citizens to choose their own conception of the good. They believe that public policy is best determined by the pluralistic struggle among all the legitimate interest groups. But, the states are the crucial ones because they set rules and procedures that enable the society to secure these goals. State apparatuses acquire distinctive public space related to the sphere of power, authority, responsibility and accountability while the society constitutes a private sphere outside the direct control of the state though it provides a unifying political framework for a series of identity-forming societal forces—both institutional and cultural, existing within state boundaries. The behavior of states and those of other forces is, however, determined by the constraints, incentives, institutions and the critical resources available to them. The power of the state to penetrate society and exercise subtle forms of social control and the power of society to make the state authorities accountable to their actions constitute the dynamics of state-society relations.

Perceiving the danger of absolutist state, liberal theorists tried to construct popular sovereignty, seeking to neutralize its despotic power through internal pacification process such as constitutional mechanism of separation of power and checks and balances among the functionally differentiated governmental institutions, citizenship rights, legitimate laws, sociopolitical reforms and accountability. “To split or decentralize power is necessarily to reduce the absolute amount of power, and the competitive system is the only system designed to minimize by decentralization the power exercised by men over men” ( Hayek, 1972:145). Decentralization of power and decision-making might allow the participation of people from the base, reform the state and delegate public functions. But in many developing countries, decentralization has involved not these functions but only the atomization of conflicts. Liberal thinkers, therefore, propounded the doctrine of a non-interventionist state on economic transactions and underlined the freedom of choice to matters as diverse as marriage, religion, economic and political affairs and uphold the values of reason and toleration in the face of tradition and absolutism (Held, 1989:13). To them, the structure of economy is considered as non-political because it is regulated by private contracts, not by the state. Yet, critic argues that an economy cannot be isolated from the labor and environment. A massive division between those who own and control the means of production and those who live by wage labor create uneven political power in society. “By defending private property in the means of production, the state has taken a side” ( Held, 1989:145). How can a state that takes the side of capital against workers embedded in society as a neutral institution and claims to be an autonomous entity? Through free exchange of commodities, removal of restriction on private investment and the division of labor in society spawn benefit to all as a result of the optimum utilization of the nation’s scarce resources. Constitutionalization of arbitrary authority (specific to feudal and praetorian regimes) of the state and society strongly applies a weak state but by no means inefficient or relatively less autonomous one. The requirement of the democratization of bureaucratic authority of the state brings to close the process of will-formation and public discourse as well as horizontal and vertical linkages of the state with society so that society
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Gunnar Myrdal views that the establishment of “ strong states” in South Asia is hampered by the attitudes, institutions and inhibitions of rulers and ruled alike. The resistance to authority, personalism and the lack of social discipline created what he terms as “ soft-states,” where hard policies are difficult to implement. Despite the leaders’ pronouncements of social and economic revolutions, the policies of the region are often piecemeal and gradualist (1972:182). Patronage type of political economy in which management often produce inefficiency, overstaffing and corruption consequently weakened the process of both economic development and democratic culture. Nepal’s case fits with this notion of soft-state, having weakness, ineffectiveness and inefficiencies in policy formulation and implementation . Despite the practice of multi-party democracy over more than a decade, governance goals have remained unattainable and the role of international institutions and foreign aid too favored the state agents (political classes) and economic interests without strengthening either the state, economy or the society. This explains the reason of societal resistance to globalization sponsored by the state agents and economic interests. This paradoxical situation also indicates as to why policy interests of the state is institutionally disembodied from the public. The government’s rush for the privatization of public wealth (industries), public power (downsizing of state) and public welfare (public utilities, health and education), etc indicates a trend towards public deficit in favor of particular interests. Due to inconsistencies in policies foreign direct investments have been geographically clustered in a few locations of the East and Southeast Asian nations. This clustering has roots in the policy initiatives of developed countries than just the recipients of foreign direct investments. Social scientists characterize the states on the basis of their functions, such as collapsed state (Somalia), ineffective, inefficient and weak state (Rwanda), predatory, corrupt and rogue state (Guatamala, Cambodia), and cooperative, accountable, flexible and developmental states (Southeast Asian Nations). “Vertical relations plagued by inequality and an unequal distribution of power and opportunity (often accompanied by exclusion and indignity) can instigate violent conflict. The absence of horozontal relations —of cross-cutting ties between unlike groups in a multicultural society—can erupt into hostilities if one group is seen as monopolizing resources and power to the disadvantage of others” (Colletta and Cullen, 2000:15).


supplies the critical resources to the state’s organizational integrity and functioning. Liberalism considers that individuals are prior to society and, therefore, political system and the state should allow them requisite freedom to pursue self-determined goals. It rests on social, institutional and methodological pluralism in which each competes for power and resources but shares values and norms with the other. Yet, none in society is entitled to special privileges. “The primary units of the state’s social basis were individual political subjects endowed, as citizens of the national state, with various legal, political and social rights and organized as members of economic-corporate organizations (trade unions and business associations) and/or a supporters of responsible political parties” ( Jessop, 1999:6). The state thus focuses on the citizenship—the identification of individuals with the state, constructs national ideology for the citizens and links that ideology with the collective identity, symbols and consciousness ensuring their loyalties. Those scholars who do work in pluralist paradigm rationalize the democratic constitutional state assuming that it limits the absolute political authority, provide political framework for social and economic justice and democratize the state power by providing the citizens rights of political participation and right to development. It is also associated with utiliterianism of J. S. Mill, laissez-faire economics, property rights and the creation of egalitarian society by the state. Liberal, representative democracy is institutionalized in state structures. “Liberalism includes individua-lists such as John Locke and Robert Nozick, who deduce the just society from the principles of personal and voluntary choice, as well as system theorists such as Emile Durkheim, Talcott Parsons and John Rawls, for whom institutions are judged in large measure by the social effects that they foster and sustain. The social commitments of liberals are no less diverse: they have both favored and opposed monarchy, popular democracy, free trade, rights of workers’ association, government intervention in economic affairs and the welfare state” ( Bowles and Gintis, 1986: 14-15). The capacity of states to implement social and economic policies and to mobilize public support rests on the structure of society as well as compliance, participation and legitimation available to state leaders in their pursuit of social control over power, markets and identities. Liberal democratic states have put a premium on a large middle class assuming that this class has the propensity to develop a more gradualist views of political change as well as craft social contract as a legitimate and secure principle of government. Accordingly, they entered into mediation between the labor and the capital under the constitutional rules of the game. They derive legitimacy from general elections and the provisions of freedom to organize political parties and civil society. These states also rendered economic decision-making accountable to the heterogeneous societies whose strength vary in their coherence, organization, leadership, ideology and shared cultural attributes. They thus established the notion of popular sovereignty which means political power is accountable to the citizens which in no way absolute and unitary as described by Jean Bodin, the sixteenth-century philosopher or even Thomas Hobbes who recommended to remove all sources of competing political authority in the state so that it can counter the threat of anarchy and preserve peace, security and freedom. The rise of modern nation-state in eighteenth and nineteenth-century following the wave for constitutional democracy removed the state’s absolutist character. There is “the multiple centers of power in liberal democratic capitalism and indeed in most social orders, and that this pluralism of power captures an essential aspect of a democratic society” ( Bowles and Gintis, 1986:4). An ardent advocate of pluralist theory, Robert A. Dahl, states that elections, a free press, autonomous associations and inclusive citizenship are among the liberal institutions required to make “polyarchy” ( 2000:37) functional. But, this does not mean that state provides equal rewards to each man and women, age cohort and social group of society. Rewards very much depend on their political clout, skills in negotiation and bargaining.

Each citizen has equal voting power in the polity does not mean each enjoys equal sovereign power. In democratic societies political priorities are set by political process and the concept of democratic accountability is sustained by the government by becoming increasingly sensitive to the weight of public opinion. Critical pluralists affirm that “business corporations wields disproportionate influence over the state” (McLennan, 1993: 85) and manipulate the state system. Why should economic actors wield disproportionate power and play a privileged role in governance when they constitute only a part of the whole and do not make up representational power? How can the state serve as mediating agent among societal asymmetries in such a condition? Or, is liberal state less interested in regulating the powerful private sphere? The obvious answer is that in the developing countries bureaucracies are weak and the state, public and private sector economies are fused in those dominant interest groups whose leaders wield enormous economic power and control political decision making processes. But, these interest groups are also enmeshed in an institutional structure of the state, pay taxes and are bound to orient towards public interest functions. If the state cannot regulate economic actors and fail to deliver public goods, the politics of identity becomes salient. The ideological orientation of decision-making elites seeking the autonomy of economy reflects a trend towards the social disempowerment of the state which increases the costs to both civil society and democratic development.
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The state is treated as a set of institutions which manages the provisions of public goods and services for the society. This view has been the center of analysis among liberal/pluralists. As power is dispersed in society, persistent political competitiveness in sustaining the commitment of political parties, whether in or out of the government and social mobilization can help the construction of mass participation in the decision-making of the state. Political parties and functional interest groups mediate between the state and society as a transmission belt and increase the participation of social forces in the political system. They also aggregate various interests, present themselves in the everyday life of society, provide sustained political education, elect and control the performance of representa-tives in the parliament and serve as integrative forces by means of socialization and mobilization. High participation of public reflects mass consensus for the political system. The nature of state is determined by the shape, institutions and socio-economic dynamics of social formation because inputs flow into the state from the various competing interest groups of societies including social classes and these inputs are subject to conversion into outputs for decisions and/or feedback to and from the state policies for either decision legitimation or again input formation. In this cycle, state institutions are considered to be impersonal and neutral bodies to which different groups in society can articulate and so produce policies that favor their members. Since modern society consists of very many overlapping interests –labor, farmers, business, home owners, consumers and so on –no one group is ever able to dominate the state

Taking cue from Karl Polanyi, Karl Polanyi Levitt argues: “In the course of past two-hundred years, economic life has been progressively disembedded from the societal and cultural matrix. As “improvement” (read “efficiency”) conquers “habitat” (read “security”), as labor, land and money have become commodified, the economy has acquired an existence of its own, driven by “laws” of its own, whether conceived in classical or Marxist terms. It is the central argument of The Great Transformation that the liberal “Utopia” of a generalized “self-regulating” market is a prescription for disaster” (1995:4). He argues that disembodied capital must be regulated and contained by the role of state in society. Held, for example, argues : “Liberalism’s thrust to create a sovereign democratic state, a diversity of power centers and a world marked by openness, controversy and plurality is radically compromised by the reality of the so-called free market—the imperatives of the system of corporate power and multinational corporations, the logic of commercial and banking houses and the economic and political rivalry of the power blocs” (Held,1989:166).


and each state is in effect an umpire adjudicating between competing interests. The balance of interests served very well as governments change but the state remain pluralist in nature and able to respond to a wide range of interests ( Taylor, 1985:118). Democracy provides scope for consensus, compromise, competition and coordination among contending groups and serves as institutionalized mechanism to mediate state-society relationship. The state can serve the people only if democracy is well established in society. The questions that hit often the liberal/pluralist paradigm are: how can a political community or the state emerge in a condition when each political or interest group of society inclines to satisfy the claims of its own interest without any care for the expectation of others? To be more precise, when inequalities are dispersed among the groups in society and one group dominates the other, how can the state stabilize social and political life against the rise of authoritarianism? One obvious answer can be by preventing the totalitarian tendency of each subsystem such as economy, class, caste, ethnicity, religion, etc which purports to transform the entire society in its own image and undermine a variety of plural life-worlds. The other can be by institutionalizing, diffusing and devolving political power to macro and micro-institutions of self-governance and crafting an integrated political community building project. The idea is that a healthy community life is essential to prosperity. A society lacking political community often resorts to primordial loyalties. And a lack of political institutionalization, meaning “adaptability, complexity, unity and autonomy” ( Huntington, 1968:13) of the institutions of the state as well as regularized, stable and continuous participation of society for mutual advantage under common agreement on law suffers from a crisis of governance.

The liberal democratic thinkers strongly argue that the logic of global capital and its mobility reduce both the autonomy of the state, its sovereignty in policy matters and ownership over those policies due to the dependency of each nation-state on global processes, institutions and norms. Robert A. Dahl notes the cohabitation of liberal state with capitalism and democracy and observes that “democracy and market capitalism are locked in a persistent conflict in which each modifies and limits the other.” Because market spurs growth, allocation of income, therefore, satisfaction of human needs. Balancing the hierarchical requirements of the state and decentralized requirements of the market constitutes the constitutional reality of liberal states. In the 1980s, the ideology of the New Right, most notably represented by the philosophy of Friedrich Hayek and Robert Nozick, submitted the neo-classical thesis on supply side economics and the “roll back the state” or even deregulation of societies in social and economic management. The neo-classical thesis of this roll back that came to be known Reaganomics and Thatcherism depends on the economic policy of monetarism and creation of private opportunity in all areas of life by minimizing the role of overloaded state teetering on the brink of crisis and facing legitimacy deficit. The neo-classical thesis rests on a number of key assumptions: first, individuals’ rational motivation for profit create efficiency in the marketplace and efficiency is important to promote economic growth, secure public interest and social goods. The drive for achievement cannot be socialized. Second, the state fails in efficient allocation of resources because it is not able to collect and process all the necessary information for market. And third, market economies enable an efficient use of information through specialization and efficiency. For them, the key economic problem is not the optimal efficiency in the allocation of resources but how to secure the best use of resources known to individuals of society for

The state fosters a “sense of community among its otherwise unrelated members, institutionalizes their sense of mutual concern and gives their collective life both a public focus and historical continuity. By interposing itself between society and government, it protects each from the unrestrained domination of the other, and creates conditions for a relatively inviolate private realm, an autonomous civil society, and an efficient, rationally planned and professional management of public affairs” (Parekh, 1996:45).

objectives whose relative importance only they know. Accordingly, the policies of individualism, market discipline, privatization, denationali-zation, deregulation, tax reduction, cuts in public expenditure, etc assumed utmost priority. To them, development is an apolitical process. In other words, globalization of economy has been regarded as a liberation from national constraints which have limited economic activities to territorial inscriptions. The proponents of neo-liberal school claim that national borders are insufficient territories for the state to function as self-contained economy and government intervention distorts the market decision-making processes as well as individual freedom. The new ideology of the market forces thus allows to challenge those national regulations that have protective impact forcing them to adopt “flexibility” on economy and create a framework of stability that is conducive to foreign investment. They believe that economic exchange maximizes the gains to those states disadvantaged by political and geographical isolation and facilitates integration process. They further argue that such regulations create costs for the production of goods which may turn out to be counterproductive in terms of competitive-ness. Nation-states have reached a degree of globalization which make their strength too narrow to face the modern challenges. In the future, therefore, the “firms will locate and relocate their production on a global scale so as to minimize their expected future costs; the employment prospects in each country will therefore depend on each nation’s ability to create an attractive business climate; and the ability of any governing group to secure reelection will depend on important measure on the employ-ment situation in the period preceding elections” ( Bowles and Gintis, 1986: 189). If the reality of market dictates the term of economic life where is the place for social consciousness? Why should the citizens hold by the idealism of national constitution? And how can every men and women be able to realize their self-worth? The decline in national economy not only deepened de-industrialization, dis-investment in public sector undertakings, skill obsoleteness, job layoffs and caused indiscri-minate exploitation of natural, ecological and labor resources but also created a crisis of political representation. It thus underestimated the role of nation-states as intermediary institution between the society and global regimes that helped to articulate national aspirations. Development economists thus more concretely argue that if individuals are accorded absolute sovereignty to pursue their own rational self-interests, then they will undermine the legitimate claim of community for common good with the peril of increasing dissolution of community lives and citizenship. Sensible democrat even admits the need of a balance between money and equality to increase social liberties: “If drastic limits are placed on inherited wealth, it would neither result in a paralysis of capitalist impulses nor would it restrict democratic liberties excessively” ( Peters, 1996:50). The classical liberalism from the days of Adam Smith often viewed “ society as a mere sum of individuals” and, therefore, rejected the traditional arrangement of society while neo-liberalism of today subordinated social goals of the family, community and the state to market institutions and the legal framework made for them. The neo-liberal project thus favors the minimalist state and prefers the subordination of political and civil society (also state) to the market in the hope that market promotes innovation, competitiveness and efficiency. In the execution of the global neo-liberal model in a competition of nation-states where each state seeks to maintain national security and promote economic growth but constrained by its own limits to attract international capital, the state is “reduced to the equivalent of the perfectly competitive firm in neoclassical economics. Unable to control prices and other aspects of the economic environment, it simply does the best it can within the constraints set by these parameters” (Bowles and Gintis, 1986: 190). The transcendence of markets beyond the economy to other boundaries established by constitutional process, accountable neither to the citizens nor to civil society constitutes a

setback to the social contract built on constitutional state provoking reactive re-tribalization of minority groups. The relaxation of barriers to capital flows allowed a new predatory form to take roots in speculation around currency prices, market shares and other derivatives thus enlarging the gulf between value and price. “The free trade argument directly and concretely challenged the sovereignty of countries, their authority to regulate borders, evoking a confrontation between nation-states and markets, where the market position was represented by Washington Consensus” (Wachtel, 2000:247). The rationalist discourse in political science focused on international regimes and international institu-tions. An increase in the growth of international regimes above the nation-state level points a transformation of sovereign states and popular sovereignty towards post-national solution. Jurgen Habermas argues “The globalization of commerce and communication, of economic production and finance, of the spread of technology and weapons, and above all of ecological and military risks, poses problems that can no longer be solved within the framework of nation-states or by the traditional method of agreements between sovereign states” ( 1998: 1).

The weakening links between territorial states and their corresponding national societies affect the capacity of the nation-state to achieve governance goals. The rationalist realm of profit and cultural realm of identity trespassed the institutional boundaries of state. Post-national state forms are “oriented to the management of recently rediscovered or newly formed regional economies on various sub-and supranational scales, including localized cross border linkages, as well as their articulation with the emerging global-regional dynamics”(Jessop,1999:7). Critics, however, argue that the operation of neo-classical political economy at the state, regional and international level cannot be expected to promote either social stability, democratic pluralism or sustainable development. Institutional development theorist strongly argues, “Neo-classical theory is simply an inappropriate tool to analyze and prescribe policies that will induce develop-ment. It is concerned with the operation of markets, not with how markets develop. How can one prescribe policies when one doesn’t understand how economies develop? The very methods employed by neo-classical economists have dictated the subject matter and militated against such a development”( North, 1996:342). In many developing countries the intensification of social struggle for political power and their social movements for access to resources became identical as both aim to secure essential public goods through the use of alternative institutions such as the state, NGOs, community, self-help and other indigenous organization in the mediation of development process. A central consequence of neo-classical theory on the state, ecology and workers is that it revitalized the importance of participatory development that valued local knowledge and autonomy, devolution of power, self-governance and social mobilization to overcome obstacles to collective action through networks and plurality of institutions.

3.0 MARXIST THEORIES: 3.1 Orthodox School

Since the evolution of the General Agreement on Tariffs and Trade (GATT) in 1947, the multi-lateral trade negotiations set the lower trade barriers and tried to remove government intervention at the borders and tariffs on manufactured goods. In the Kennedy Round (1964-7) GATT focused its attention to nontariff measures, in Tokyo Round (1973-79) and Uruguay Round, its attention shifted to government subsidies, anti-dumping, government procurement and customs and licensing procedures. As the GATT was replaced by World Trade Organization (WTO) in 1995, the question of regulation got applied to not only the state but also the non-state societal actors. The WTO meeting in Seattle in 1999 indicated that the global consensus for free trade has broken down. The developing countries had made major concessions on trade with the hope that developed countries would open up their markets. On the contrary, developed countries remained unyielding for their own domestic political reasons.

Marxist conception of the state refers to the radical critique of capitalism. Its theories on the state can be divided into several competing schools and tendencies yet all believe that public policy reflects the interests of capitalist class. The orthodox (Marxist-Leninist) school conceives the state a special repressive force of bourgeoisie to dominate and exploit the masses. In “The Communist Manifesto” Marx and Engels say that “the modern state is but a committee for managing the common affairs of the whole bourgeoisie.” It is deeply enmeshed in the capitalist mode of production and works for the general interest of capitalist class to create social order, institutions of private property and development spur. According to Marxist conception, economics determines politics and political structure of the state. The state, however, maintains relative autonomy from the members of the particular segment of capitalist class. Marx suggested that the state gains ‘ relative autonomy’ by balancing the interests between competing segments of the ruling class. He envisioned a classless society to eliminate exploitation and alienation through the abolition of private property and sought the ultimate “ withering away” of the bureaucratic state and capitalist economy by a proletarian revolution for the creation of a democratically self-regulating society. In such a democratically self-regulating society production of goods and services would be based on social utility, rather than maximiza-tion of profits. Marxist scholars from structural school acknowledge that “a relatively autonomous state is viewed acting as a factor of cohesion for the bourgeoisie and as a facilitator of the bourgeoisie dominance over the economy and society” ( Koo,1984:43). F. Engels in his “The Origins of the Family, Private Property and the State” ( 1894) supposed the state a product of society at a certain stage of development, but it is placing itself above the society and increasingly alienating from it. He attributes the sexual division of labor, exploitation of working class and the formation of state to the private ownership of the means of production. Under Marxist theories, this study includes orthodox, instrumentalist, structuralist, derivationist, and commodity-centered political economy and hegemony schools. The core propositions of orthodox school rest on the fact that the state is a mere superstructure dependent on economic, social and political power of dominant class and, therefore, serves their common interests; the state and its bureaucracy are the class instruments, not neutral or non-partisan entity; it coordinate the divided society in the interest of ruling class; the state defends the private ownership of the means of production; and only through the struggle for resources and their allocation restructuring of property relations can be made. With the application of collective action by working class ( revolution) the proletariat can achieve human emancipation. In the “ State and Revolution” (1917) V.I. Lenin recognized the existence of state within capitalist society but claimed that the needs of different national capitalisms to expand domestic production markets led to geopolitical conflicts and the expansion of monopoly finance capitalism, including its highest form—the imperialism. Lenin favored the use of revolution to seize the state apparatuses by the working classes and transform economic and social relation for the creation of a new socialist society free of human exploitation and class antagonism. Many of these conceptions could not establish their validity on the way of the dissolution of capitalist states. The functions of state became irreversible even in those countries such as former Soviet Union, China, Cuba, Vietnam, etc which established communist regimes and even became life-chances for a number of social groups of society. When communist parties captured the state they developed a “new class” of entrenched oligarchy enjoying privileges over the working classes (for example, Yugoslavia) or committed class suicide and even developed state-conscious-ness (Mazrui, 1996: 56). Some totalitarian state completely embraced the activities of society and individuals, undercut their autonomy and displaced societal institutions.
3.2 Instrumentalist School

The modern version of Marxist theories of the state has been provided by Ralph Miliband who says that the “state in capitalist society is the capitalist state,” not the neutral arbiter among social classes as pluralist theorists maintain. Specific private interests have nexus to particular institutions of the state. But in general the state represents class interests and, therefore, it is an intrinsic part of, and a player in, defining social relations. Miliband provides instrumentalist theory of the state as he views the state an instru-ment of capitalist class. It does not stand above society. As it represents class interests it does shape the social dynamics within the classes, regulates property relations and the rules of social, economic and political engagements in society. While trying to prove the class nature of the pluralist state, he collected data on the social, economic and political background of the state class and revealed that all came from the same dominant elite group who owned and controlled the means of production and produced consensus in the transformation of capitalist economy into capitalist society through the strategies of repression and ideology including the doctrine of anticommunism. This class is able to manipulate the state apparatuses irrespective of democratic constitution, existence of majority of working class in the country and whichever party is in the government. Miliband believes that “state apparatus is a crucially important and committed element in the maintenance and defense of the structure of power and privilege inherent in advanced capitalism” (Miliband, 1969:129). He claims that pluralist competition in election is a myth because the dominant class monopolizes the intellectual, informational, commercial, political and social capital of society through their disproportionate representation in the institu-tions of governance. And economic power behind capitalist interest groups is far more influential than other groups in society. To him, minority interests of the burgeoisie dominate state politics. He, therefore, believes in the “class struggle from below” through a partnership between democratic socialist state and the movements of social power. The strong function of the state is to supervise the transition from capitalism to socialism. ( Kovel,1994:57).
3.3 The Structuralist School

The structuralist position on the theory of state has been maintained by Nicos Poulantzas. He developed a critique of economic determinism specific to orthodox school and opposed the stress on individual actors and their motivations revealing that the state is broadly determined by the structures of society and constitutes a creating, transforming and making reality. Poulantzas viewed that modern capitalism has three components—the state, ideology and the economy—each maintains relative autonomy to the other. The power bloc in society is composed of the condensation of class relations emerged out of political practices of the ruling classes in a capitalist formation. “It depends on the existence of a ‘plurality’ of dominant classes (and fractions) characteristic of this formation” (Poulantzas, 1973:231). He asserts that the state is a factor of cohesion for capitalist system and serves the needs of its interests, regardless of private-public collaboration. To him, bureaucracy and social structure are mechanisms used by state apparatuses to link the state with capitalist class. But, the capitalist state separates economic from political and maintains the relative autonomy of the state from the dominant class. It is this relative autonomy that makes possible for the state to pursue general interests of the capitalist class and political action as a whole against particular interests and policies of specific capitalists. This freedom of movement enables the state to forge class alliance with bourgeoisie while devitalizing the unity of workers through the transformation of workers into individualized citizens.

In that sense, it cannot cohesively function by coercive means alone. The state maintains ideological domination of the working class through socialization, constitutionalized form of

coercion, training and subjection into various positions and occupations to produce. And the classes are not determined by economic factor alone but also by political and ideological factors. “The state is capitalist because it operates within the capitalist mode of production. This sets constraints on the range of actions that is possible so that the state has no option but to conform to the needs of capital. The introduction of liberal democracy does not change this fundamental property” (Taylor, 1985:119) of the stability of capitalist system, the reproduction of capitalist production relations and the continuation of capitalist domination. As Poulantzas does not differentiate class power from the state power, he considers the state as a vehicle of system maintenance—the maintenance of capitalist system while at the same time concludes that political practices brings about social changes by recognizing the state as a locus of conflict and cohesion. The state can only function if it has the power to raise tax and material resources. To him, the nature of state is always determined by the need to sustain capitalist accumulation. He, therefore, pleads for a continuous process of class struggle for improving their position in the state power and resources. The weakness in Poulantzas’ view is that it does not differentiate state power from class power. How an internally divided (on class lines) state supports its own reproduction and expansion?
3.4 Derivationaist School

The derivationist school rejects both instrumentalist and structuralist schools in favor of Keynesianism. The evolution of the social democratic state marked the “reproduction of a skilled and healthy labor force for the long-term interests of capital. In this role of coordinating capital and reproducing labor the state may appear neutral and above the political conflict between capital and labor” ( Taylor, 1985:120). Taylor argues that “The Marxist political analyses, developed by Miliband and Poulantzas in their different ways, cannot adequately answer this question because they have foresaken the holism of political economy” (1985: 120). Yet, both went beyond the traditional Marxist theories of the state. Eduard Bernstein and Karl Kautsky made systematic attempts to revise and reform Marxist assumption of the inevitability of the collapse of capitalism. The ameliorative trends in capitalism, the expansion of small scale enterprises and social welfare programs preventing class polarization and the growth of educated and civilized public led to the development of social state with what Joseph Schumpeter calls “socialization of the economy.” By explaining changes in the social, economic and political nature of Western capitalism, derivationist school attempts to identify the condition which resurrected a new form of collective action—a form which legitimized, among others, the class and non-class based movements of people, renegotiation of social contract, right to free collective bargaining and co-determination.
3.5 Class Mediating School

Influenced by the Frankfurt school, Claus Offe offers commodity-centered approach to the state and contradicts the view of Poulantzas’ that the state is intrinsically capitalist and Miliband’s thesis that the state enmeshed in capitalist society is capitalist state. Offe argues that the state is independent of instrumental and structural control but it is caught in capitalist contradictions and, consequently, seeking to maintain its own legitimacy by means of mediating the demands of working class. On the one hand the state has to sustain the process of accumulation, the private appropriation of resources and commodification on the other hand it has to manage the crisis to guard the commodity form by several methods: inaction (hoping for self-corrective mechanism of the market), and subsidies to both labor and capital to participate in exchange relationship and arbiter class interests, thereby legitimating its power (Held, 1984: 71). “The problem with this welfare state type of dealing with decommodified values is that it becomes too costly in fiscal terms, thus sharpening the fiscal crisis of the state” (Offe and Ronge,1982: ).

There is institutional self-interest of the state in accumulation of taxation, production and finance and that the state does not defend the interests of one class, but the common interests of all members of a capitalist society. There is a “dual determination of political power in the capitalist state: by its institutional form access to political power is determined through the rules of democratic and representative government, by its material content, the use of political power is controlled by the course and the further requirements of the accumulation process” (Offe and Ronge, 1982). Offe and Ronge conclude that the “link between the political and economic structure of capitalist society is the commodity form. Both substructures depend upon the universalization of this form for their viability.” Owing to increasing bureaucratization of state, institutionalization of everyday life of citizens and the colonization of the life-world by the system, movements of the new political paradigm adopt autonomous and extra-parliamentary forms of struggle which take place within civil society—in an intermediate space between the private and the public sphere, where they challenge both the boundaries of state-sanctioned politics and liberal ideology ( Offe,1985:820). New social movements comprise three segments of social structure—the new middle class, elements of the old middle class and those people outside the labor market or peripherally involved and their demands are non-negotiable, such as peace, environment, gender rights, etc. They seek to politicize civil society in ways that are not constrained either by the state or bureaucratic and political authorities. In a society divided by plurality of interests, interest groups engage in intermediation, linkages and negotiation to determine the status and life of groups rather than becoming more involved in class wars. Offe believes that an alliance between the new social movements and the traditional left, especially unionized working class can lead to an effective and successful challenge to old form of politics where collective bargaining and representative party government were the exclusive mechanism for resolving political and social conflicts. The importance of state action in “enabling the capitalist system of the industrialized world increased, not reduced, as that system spreads internationally. If states do not control the movement of capital or of goods, it is not because they cannot but because they will not—it is an abdication of state power, not a lack of power” ( Marcuse, 2000:25).
3.5 Hegemony School

The theory of hegemony has been provided by Antonio Gramsci. He argues that dynamics of struggle for domination and opposition among the social groups contributed to the formation of nation-state and its ideology. To him, the state is run by the ideas of ruling class and those ideas generate ideology in society. The media, schools, political parties and religion are used to educate and persuade as well as to muster consent from the governed to produce hegemonic sense of state legitimacy. This view has been shared by others too. For example, Parekh says “every modern state has relied on education to propagate a common system of values, a shared sense of national identity, and a uniform conception of the good citizen to bring about the cultural and political homogenization of its members” ( 1996:37). Gramsci asserts that “ The modern state substitutes for the mechanical bloc of social groups, their subordination to the active hegemony of the directive and the dominant group, hence abolishes certain autonomies, which nevertheless are reborn in other forms, as parties, trade unions, cultural associations. The contemporary dictatorships legally abolish these new forms of autonomy as well, and strive to incorporate them within state activity: the legal centralization of entire national life in the hands of the dominant group becomes totalitarian” (1996:54). In the 1960s and early 1970s, three trends appeared to have dominated the state-society discourse: anti-state ideology of social movements groups that offered “alternative” vision for the transformation of society; New Left tried to revive and rehabilitate traditional form of

workers-based class power and devised a political strategy on behalf of the working class; and inter-movement solidarity groups and civil society that sought to democratize the state power and tried to counter the ideology of neo-liberalism through democratic means. The state through intellectual and moral leadership entertains hegemony over other authority and people and consolidate the sovereignty of the nation-state in the internal and external affairs. Critiques argue that although the state “retains its capitalist nature and many of the structural and cultural features of the past, contemporary society operates under a different capitalism, one not only engendered in the market but also promulgated under the state tutelage” (Chodak, 1989:19). The neo-Gramscian thus treats the modern state an “ensemble of socially embedded, socially regularized and strategically selective institutions, organizations, social forces and activities organized around (or at least involve in) making collectively binding decisions for an imagined political community” ( Jessop, 1999:2).

Political economy refers to the methodological and substantive use of economic reasoning to explain the interrelationship of economic and political factors with the society and the state, and the adoption of public policies by the government to accumulate resources and power needed to achieve social objectives. “The distribution of power creates patterns of property rights within which wealth is produced and distributed; changes in productive efficiency and access to resources affect relations of power in the long-run” ( Keohane,1984:18). A more practical approach to political economy defines political activity as a “contest for power to determine the distribution of economic resources or status, or to make, defend and change the rules of the game; where as the political arena is the state” ( Bowles and Gintis, 1986:23). The struggles around political power are ultimately about socio-economic resources and their allocation. The concept of power includes all relations in society that are needed to shape the state-society relations. Out of a commitment to development or to stay in power, the state class tries to control the behavior of the certain economic and social actors and extract resource while at the same time appeases powerful interest groups of society to secure special advantages thus rendering the determination and execution of public policies to little consequence to the powerless sections of society. The dynamics of power relations in society is a function of the reciprocal interaction between power and wealth. A more radical version of political economy has been provided by neo-Marxist theories divided into four schools—world system, dependency, modes of production and unequal exchange. Meanwhile, this study also deals with non-Marxist rational choice, Weberian and state-in-society schools. These theories provide critical insights into the global process of capital accumulation and expansion as causes of underdevelopment of developing countries. All these theories reduce political institutions and the state to the mode of production.
4.1 World System Theory

The cardinal point of world system theory is not to explain the domestic class relation but of global division of labor, the movement of advanced capital and the cycles of global capitalism. It purports to explain the specific position of peripheral nation-state in the context of global dynamics of capitalism. The key assumptions of world system theory expounded by Immanuel Wallerstein is that capitalist world economy transcends the state boundaries. The drive for capital accumulation causes increasing competition among capitalist producers for labor, goods and markets. The uneven development causes the growth of three types of societies—the core societies have strong states, powerful industrial base, a large wage labor class and are engaged to influence the policies of non-core societies. The peripheral societies have weak states, a large

peasant class, produce raw materials and are dependent on core societies for their survival and development. The semi-peripheral societies are caught in between the two, limit the polarization and provide continuity to the state system. The world system theory examines the consequence of changes into its sub-units, for example, the states, nations, regions, classes and ethnic groups. Wallerstein theorizes that “since the states are the primary arena of political conflict in a capitalist world-economy, and since the functioning of the world-economy is such that national class composition varies widely, it is easy to perceive why the politics of states differentially located in relation to the world-economy should be so dissimilar. It is also then easy to perceive that using the political machinery of a given state to change the social composition and world-economic function of national production does not per se change the capitalist world-system as such” ( 1979:293). This suggests that only strong states promote development goal because they are capable of appropriating the surplus of society of both semi-peripheral and peripheral states and develop their society for the general good of all. This process locks the development of peripheral states into “metropolis-satellite” chain and promotes “dual” societies and economies in the underdeveloped countries contributing to what Andre Gunder Frank calls “the development of underdevelopment.”
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4.2 Dependency Theory

The proponents of dependency theory assert that nothing could be imagined outside the dominant logic of a single world capitalist system. Dependency theorists stipulate “ We conceive the relationship between external and internal forces as forming a complex whole whose structural links are not based on mere external forms of exploita-tion and coercion, but are rooted in coincidences of interests between local dominant classes and international ones, and on the other side, are challenged by local groups and classes” ( Cardoso and Faletto, 1979: XVI). All states participate in the world capitalist system and are variously constrained by it. But what is more “important is the organizations of production, the class relation-ship, and the class character of the state which differentiates societies and ultimately provides meaning to their insertion within the world system” (Petras, 1978:36). The rise of globalism is intimately related with the logic of capital, technological change, declining profits for state, crisis in welfare and Soviet states and the demise of national development thereby sapping the popular aspirations for nation-building in the periphery.

Explaining the role of activist state of the Third World in dismantling welfare measures for the sake of neo-liberal ideology of globalization Petras and Polychroniou assume “There is a dialectical relation between the state role in the domestic economy and in the process of globalization. By pursuing policies of lowering wages, implementing social cuts in the budget,

Strong states are those which have a high capacity for promoting the economic development and which can perform well in terms of the welfare of entire population in general. A high degree of autonomy is a precondition for development strength of the state. “The original placement of a state in this inexorable international division of labor determines whether a state is hard or soft. Whereas the former is able to resist external market forces, channel them to its own advantage, and can effectively manage its own economy, the latter is pliable, at the mercy of external market forces and cannot control its own economic affairs. Thus soft states and dependent economies are caught in a web of market forces from which escape is very difficult” (Gilpin, 1987:71). Frank suggests that “global extension and unity of the capitalist system, its monopoly structure and uneven development throughout its history and the resulting persistence of commercial rather than industrial capitalism in the underdeveloped world (including its most industrially advanced countries) deserve much more attention in the study of economic development and cultural change than they have hitherto received” (1992:117).


transfering pensions to private capital, the third world state reconcentrate income upward for overseas expansion (globalization or capital relocation )” and suggests “ in order to counter effectively the process of globalization, bridges of international labor solidarity must be urgently built and the state must be viewed as a major resource and lever for change. This view must be accompanied by an approach that minimizes bureaucracy and maximizes the redistribution of resources within civil society” (1997:2250-52).
4.3 Modes of Production

Modes of Production School (MOP) emerged as a critique of dependency theory chiefly articulated by Frank and Wallerstein. It rejects economic reductionism, determinism and structuralism. This school elaborates the domain of capitalist mode of production to embody pre-capitalist (primitive communal, ancient, slave and feudal mode of production), capitalist and non-capitalist economies existing in the peripheral states and societies where power is dispersed and fragmented. It is determined by the social rather than economy, state or other institutions. Political socialization of rural societies into national political culture, the commercialization and industrialization of their economies and spread of education and communication began to redefine the development process of class formation and economic growth. Accordingly, power is reproduced and contested through the articulatory practices constituting social relations. Ernesto Laclau and Aiden Foster-Carter are, among others, chief exponents of this school who made comprehensive survey about the under-development of Latin American states. According to Laclau, modes of production combine four factors: the patters of ownership of the means of production, the forms of appropriation of economic surplus, the degree of division of labor, and the level of development of the forces of production (Laclau, 1971:39). Applying all these variables he concluded that a lack of uniform capitalist mode of production in peripheral states produces new politics of democratic pluralism. This means there is a scope for the articulation of indigenous development.

4.4 Unequal Exchange

Unequal exchange school is represented by Samir Amin. He agrees with Paul Baren who identified monopoly as the source of “unequal exchange” and affirms that the process of “unequal exchange” between the core and periphery produced auto-centric and dependent development. Amin argues that the dynamic core is autonomous and the periphery adjusts to the demands and constraints of dominant capital. The condition for unequal exchange rests on productivity and specialization differences in which surplus of periphery acquired through primitive accumulation is transferred to the core. The monopoly capital created a structure in which exports of the periphery were highly considered while their imports were overvalued. Amin sees the role of state in regulating competition between units of accumulation and, therefore, stands above them. In order to set constraints on imperialism arising out of unequal development within the capitalist system there is a “necessity of a state, not only in the nature of things belonging to the world system of states, but also necessary to articulate the popular hegemonic alliance and to organize development of the forces of production. The state is then the locus of these struggles between the ‘socialist path’ and the ‘capitalist path’, that is the path of constituting a new mode of exploitation (revisionism). Since the state is locus of these struggles, the option for social management by the masses (in contrast to a management by cadres) remains imperfect, contradictory and under permanent threat” (Amin, 1990:136). To him, in the real class struggle state becomes effective means to defend

“The distribution of the fertility rents among labor (higher wages), consumers (lower prices), the state (taxes), interest groups (privileges) and citizens (protective regulations, public amenities) is necessarily a matter of politics. In these matters nation-state are sovereign. They are also sovereign in the distribution of the costs and benefits of adjustment to changes in national and international markets. The world market cannot dictate employment or wage levels in a country. The primacy of politics implies the responsibility of politics for the social effects of the market system—that is, for its domestication” (Kamppeter,1995:241).

the weak member of society. Inspired by neo-Marxist school, Raul Prebisch made policy prescriptions for altering the structure of production, largely through an active state in importsubstituting industrialization, large public sectors, trade diversification, access to foreign markets and the formulation of related tariff policies.
4.5 Rational Choice

Robert Bates provides rational choice paradigm as a critique to the neo-Marxist theories arguing that underdevelopment of African states is largely the consequence of government’s policy choice rather than the structure of dependence. Rational choice model reduces political structure and institutions to the choice processes of decision-makers. He asks, “How do public choices, ostensibly made for the public good, become the basis for private aggrandizement? By what process does a vision of the public order erode?” ( Bates,1981:6). Explaining the plight of African peasants and societies owing to underproduction in agriculture, massive rentseeking and corruption, excessive reliance on imported foods in already commodity rich states and overtaxing of peasants, Bates affirms that the state intervention in the markets is meant to generate “political resources to be distributed to build organized support for the political elites and policies they propound” (Bates, 1981: 7). Likewise, he asserts, the development programs are largely used to build “political organizations” and to “institutionalize the patterns of bias” in the development process. Mancur Olson, however, thinks that the state intervention may be justified for “public goods” services for which no market exists or likely to emerge. He explains that the growth of government is caused by “economic prominence,” yet the entrenchment of interest groups in political organizations for their own benefit caused economic decline. DeLong, therefore, finds the benefits of rapid market-generated economic development for three reasons. ““First, productivity gap between periphery and industrial core has never been larger. Second, government now have a larger number of positive examples to copy (as well as negative examples to avoid) in planning market-conforming development strategies. Third, investors in the industrial core now have the confidence and resources to materailly assist in peripheral development” ( 1999:10). Amartya Sen agrees on the overall achievement of the market but says that those achievements are “deeply contingent on political and social arrangements” and that opportunities offered by them are “reasonably shared” (1999:142). South Asian states including Nepal looked for favorable foreign investments and aid as a means of escaping from capital constraints as well as to increase capital goods imports, improve the balance of payments, reduce inflation and facilitate technology transfer. While Weberian thinkers call this rational-choice theory ahisto-rical, asocial and partial because they believe that agenda, activity and paradigm of the state do not change by the sole motivation of policy makers. They have historical sequence and outcomes. Neo-mercantilist theories, therefore, criticize both liberal and Marxist assumptions for underesti-mating the significance of the nation-state, emphasize on national political goal of economic takeoff, situate the nonstate actors in the context of the interest of nation-state and narrate the role of state in crafting public policies in order to increase the power of state to negotiate with the actors that constitute international regimes.

4.6 Weberian School

The Weberian scholarship constitutes a new thinking on state theories but goes beyond the definition of Max Weber who says that the ideal-type state is based on “a system of order” that exercises binding authority and monopolizes the legitimate use of coercion within its

jurisdiction. To him, the crucial factors in politics are not the classes, but bureaucracies which shape the social order by means of domination—whether patriarchal, patrimonial and legalrational. As organizations become more bureaucratized power becomes concentrated in the hands of elites at the top to strengthen what Robert Michels calls “the iron law of oligarchy.” Peter Evans, Theda Skocpol, Dietrich Reuschmeyer and Szymon Chodak, among others, are the prominent thinkers who contributed to state-oriented literature and analyzed the role of state in relation to social structures and processes and its contribution in initiating vast socioeconomic change without “glorifying state power or overstating its efficiency” ( Evans, Ruesch-meyer and Skocpol, 1989: 305) as Hegal, Hobbes and Machiavelli did. The state does maintain political neutrality or relative autonomy because of the diversity of production structure and that no class holds the absolute balance of power in the economy and society. The state is an integral unit within a configuration of domestic and international forces and, therefore, continues to mediate between the capital and labor and between domestic and international capital. The three actors: the state, local and international capital constitute what Peter Evans calls “triple alliance” for the domination of state, society and economy. To most dependency theorists, the triple alliance naturally constitutes the power of a “comprador class,” which in alliance with international capitalist class subordinates national industries for its own material interests, facilitates the flow of primary products, allows capital flight and circumscribes the social and economic basis of the state. Others, however, argue that the transfor-mation of state on particular type depends on the political culture of the ruling elites. Criticizing the bias of the neo-liberal and neo-utilitarian paradigm in social science of the more advanced countries that treated the Third World states as “predatory” and “rentseeking,” Evans pleads for a more differentiated view of states depending on their development perfor-mance. He draws inspirations from organiza-tional theories, for example, how economic models about bureaucrats function and what kind of incentive system bureaucrats create. Evans cites the cases of three different types of states, for example, “incoherent absolutist domination” of the “klepto-patrimonial” Zairian state, “embed-ded autonomy” of the East Asian developmental states and the “intermediate state,” of Brazil achieving different types of development payoffs . Evans upholds that “the efficacy of the developmental state depends on a meritocratic bureaucracy with a strong sense of corporate identity and a dense set of institutionalized links to private elites” ( Evans,1989:561). To him, the most effective states are characterized by “embedded autonomy” with dense societal ties but without dominating their societies as predatory state does. Active government and mobilized communities can enhance each other’s development efforts to capture the possibility of state-society synergy—a synergy that combines complimentarity and embeddedness (Evans, 1996:178).

Evans asserts that developing countries are underdeveloped not because they lack adequate capital to invest. What they lack is entrepreneur-ship in the sense of willingness to


Citing the Zairian case Evans argues “Personalism and plundering at the top destroys any possibility of rule-governed behavior in the lower levels of the bureaucracy, giving individual maximization free rein. At the same time, however, marketization of the state apparatuses makes the development of a bourgeoisie oriented toward long-term profit-based productive investment almost an impossibility” (1989:570). In the case of developmental state of Japan he affirms, “That formal competence, rather than clientilistic ties or traditional loyalties, is the prime requirement for entry into the network, makes it much more likely that effective performance will be a valued attribute among loyal members of various batsu” (1989:573). While the Brazilian case illustrated largely the predominance of clientelistic norms. “Unable to transform the bureaucracy as a whole, political leaders try to create “pockets of efficiency” within the bureaucracy, thus modernizing the state apparatus by addition rather than transformation” (1989:577).

risk the available surplus by investing in productive activities. A developmental state can take risks while others cannot, whether they are auto-centric or dependent. In explaining the notion of “depen-dent development” he summarizes the key features of Brazil’s post-world war development trajectory. Evans, notes “if classic dependence was associated with weak states, dependent develop-ment is associated with the strengthening of strong states in the semiperiphery. The consolidation of state power may even be consi-dered a prerequisite of dependent development” (1979: 11). He argues that the prevailing neo-liberal political economy served as a source of prescription for policies in order to promote economic growth, but it did not provide a tool for the institutional analysis of the state itself. Evans claims that in the developing countries the “states expanded, not because of increased demand for collective goods, but because of self-seeking bureaucrats. Rent-seeking took what had been traditionally seen as aberrant, corrupt practices and transformed them into the core of the political economy of public institutions” (Evens, 1997:75) thereby weakening the power of state. His solutions are: “reducing the resources allocated” by the bureaucracy, replacing the norms of public service and marketizing the administrative structure to produce state-society synergy.

Influenced by the comparative-historical research of Marx on political structuralism and Max Weber on macro-sociological variables, Theda Skocpol combines the role of state structures, class relations and international forces to explain the origin and success of social revolution and the dialectics of social change. She asserts that the contradiction in the old regime of France, Russia and China, with the dominant class and international competitors caused revolution and the post-revolutionary states had been used to transform societies. But, she does not believe in either economic determinism of Immanual Wallerstein or reducing the state to class power advocated by orthodox school, even relative deprivation of non-Marxist school yet grudgingly admits the role of ideology used by classical Marxists. Throughout modern history the state “represents an analytically autonomous level of transnational realism —interdependent in its structure and dynamics with world capitalism, but not reducible to it” (Skocpol, 1979:2). Agreeing with the softer-type of structural Marxism she asserts that the state is “potentially autonomous organizations located at the interface of class structures and international situations—to the very centers of attention” ( Skocpol, 1979:33). She explains that the states are “organizations claiming control over territories and people” which “formulate and pursue goals that are not simply reflective of the demands or interests of social groups, classes or society.” “State autonomy is characterized by its independent goal formulating ability while state capacities refer to implementing official goals, especially over the actual or potential opposition of powerful social groups or in the face of recal-citrant socioeconomic circumstances” ( Skocpol, 1989:9). Skocpol also elaborates the rationality of state actions because “state officials are judged to be specifically capable of formulating holistic and long-term strategies transcending partial, short-sighted demands from profit-seeking capitalists or narrowly self-interested social groups”( 1989:15). She views revolutions as radical political processes springing from the dynamics of political culture, coalition building and agency. The revolution thus occurs as a consequence of state weaknesses combined with institutional deficit that provide seeds to dissatisfied elites and popular groups with opportunities for effective collective action against the state’s efforts at the domestication of society and imposing uniformity. A weak state, a state that lacks proper authority and power, fails to meet the needs of its diverse population, faces the emergence of anti-establishment forces and loses the loyalty of its citizens. In a recent effort to refine state-society relations Skocpol et al. (1985) in their “Bringing the State Back In” provide powerful arguments in

The development state has the propensity to prioritize the interests of those who are in need of development. This means development states defend, protect and execute people-oriented policies and programs based on the diverse social, economic and cultural needs and priorities of people by means of restoring their capacities and fulfilling their cognitive, material, moral and spiritual needs.

defense of the state as an autonomous actor capable of shaping the social and political processes, economic policy and influencing political cleavages and collective action in the context of societal forces under which it has to operate.
4.7 State-in-Society Approach

Joel Migdal et. al. ( 1994) have emphasized on contemporary emergence, development and impact of social forces on the state and how these forces have made the state “contested arenas.” They, therefore, focused on “state-in-society” approach. They argue that states are embedded in society, beef up their capabilities on the basis of societal support and reshape each other’s goals, policies and strategies. Migdal rejected the view of state autonomy and viewed that states are dependent on societal support for their survival and legitimacy. States make policies in response to the claims of social forces. In response to the widespread resurgence of social movements, states are increasingly yielding a portion of their sovereignty downwards though the degree of devolution differs from decentra-lization, local autonomy, self-governance, federalization to even self-determination. “The ability of any social force, including the state, to develop the cohesion and garner the material and symbolic resources to project a meaningful presence at the society-wide level depends on its performance in more circumscribed arenas. In those arenas, it must dominate successfully enough (close to total transformation or, at least, incorporation of social forces) so as to be able to generate resources for application in other arena struggles and, ultimately, the society as a whole” (Migdal, 1994:30). The state-in-society approach provides a counter-point to the modernization theory that recognizes the centrality of central governmental institutions in transforming society from tradition to modernity. It focuses on the mutual transformation of the state and society and, consequently, the reshaping of the patterns of authority, order and compliance in society. In order to be effective, the state has to appeal to the “authority of human reason present in society” (Rawls, 1996:383). Migdal thus trims state’s engagement with social forces, starts with process rather than structure and provides a blueprint that focuses on a limited state (1999:221). Political scientist Francis Fukuyama who says that social world is too complicated to be reduced to economic means has laid the primacy of social over the state and economy. To him, creation of prosperity is based on social virtues and trust what he terms as social capital—a term first invented by Jane Jacobs and used by James Coleman to describe the “ability of people to work together for common purpose for wealth-creation.” Fukuyama reveals that in the Southeast Asian region states are the major instruments to garner social capital for development. While Brazil combined the role of state to expand domestic market expansion, South Korea utilized the state for the expansion of external market. To Robert D Putnam, the interpretive schemata of social capital includes the features of social life, such as “networks, norms and trusts – that enable the people to act together more efficiently to pursue shared objectives.” It refers to social connections of the people with the life of their families, communities and societies as well as secondary type rationalized associations though he misses the organizational dynamics, vibrant ties across classes and localities by which civic association actually form. State power becomes less cohesive if polity as an institution of representation becomes an instrument of political party in power and lacks autonomy and institutionalization. In such a situation, political contestation for control over public power and state institutions becomes a narrow game and, consequently, might lose the purpose of public orientation. The autonomy of polity is measured by which it has public power, interests and values of its own separate from other sectoral institutions, such as the market, civil society, class, caste, interest groups and political parties.

4.8 A Synthesis of Theories

The various approaches to the state offer contending arguments and debates providing framework and setting their openings to each other. The analysis above raises certain key premises: whether the mediation efforts of different approaches on state do help to capture the gaps in societal asymmetries especially between the rich and the poor, between the needs of the present and future generations, between economic efficiency and sustainable development and between technological evolution and society’s ability to absorb them for fulfilling people’s basic needs; whether the modern state assists to nurture participatory development opening itself to social, political and economic decision-making leading to the self-determination of people; and whether the state helps promote the viability of grassroots democracy and development based on the decentralization of power and wealth. Liberal pluralist and Marxist theories of the state have their origin in the Enlightenment project and, therefore, both attempt to emancipate people through the rationality of technology, ideology and reason though both resort to disharmonious means. Both defend the “relative autonomy” of states serving as umpire, refereeing among competing interests of society and economy and mediating the contradiction of society. Both agree that global expansion of transnational corporations has constrained the state’s ability to formulate and execute policies in the interests of public. In the early 1970s, this “convergence of assessments of the ability of transnational corporations to constrain state power had virtually become an orthodoxy in the growing literature on international political economy”( Biersteker, 1989:41). Liberal thinkers perceive threat from the absolutist state to individuals and tried to minimize its activities, Marxists also consider the threat of capitalist state to underclass and tried to minimize, and even eliminate its exploitative capacity while mercantilists view the state as neutral arbiter to prevent domestic conflict as well as exploitation by external forces and, consequently, tried to expand its role. Sustained economic development has been the drive of economic nationalists to develop national power as a precondition to the source of growth and they argue that non-state actors and international economic order can be understood only in reference to the state. As the state expanded to promote development, control of the state by patrimonial elite facilitated both personal accumulation and the class formation in many countries of Asia, Africa and Latin America. This weakened the base of broad-based development. Successful countries of Southeast and East Asia, however, became able to limit the negative effects of corruption and maximized investment in infrastructure and export capacity while Brazil achieved high economic growth through income distribution.

Multiple structures of the states with widely different tasks and interests continuously engage and involve in diversified functional groups of the society, garner support for governmental success, monitor the centrifugal and centripetal forces of society, seek social capital and political legitimacy for the development process. The questions are: how democratic forces and their state regulate, utilize, possess, deploy and manage the capital as well as state institutions in order to reshape the relationships of the various structures of society? What role does the state play in relation to capital and property relations? These two questions are critical in defining the terrain of discourse on the state around matters of ideology, institutions, economy, political power and development. The rediscovering of the state as an autonomous actor is an important contribution to the state-insociety debate and to address the question whether the transfer of sovereignty from the public power of the state that are transparent and accountable to private hands that do possess neither of them would be beneficial to promote development process.

The distorted state-society relationship caused democratic breakdown, entrenched corruption and rent-seeking, affected the level of development and prevented the emergence of an autonomous, productive entrepreneurial class capable of fostering development.

In the post-war period, the growth of state was affected by three developments: the evolution of social democratic and welfare states in the West based on Keynesianism; construction of national development state in the developing countries and the existence of Soviet and Chinese-style state system subsisting relatively independent of the dominant world capitalist system. All these three systems politicized the economic rationality and the content of public policy. In the developing countries, the state maintained commanding height of economy, public resources and their use. It was an important indicator of the control of state power to maintain internal stability, by setting rules for and determine the accumulation and employment of capital as well as securing external sovereignty. Owing to the fear of the fallout of geopolitical contest of the cold war in many developing countries, the freedom of people and social forces was compromised for the sake of political stability and order and the flow of external assistance assisted the state power to control and regulate society. This legacy still bounces back today. “The state, in a sense, is now in the process of superseding class and other societal structures that brought it into being” ( Chodak, 1989: 19) and formulating counter strategy to the denationalized solidarity of societal forces by strengthening the intensity of inter-state relations. “Different state agencies—regulatory agencies, courts, executives and increasingly also legislatures—are networking with their counterparts abroad. Learning from counterparts can be considered as the major goal of these trans-governmental exchange” (Zurn, 1999:16). The state as a rational actor sought to maximize its own interests by means of acquiring control over a number of areas “the reproduction of the labor force, which implies a relatively complete and balanced development so that local agriculture can be, inter alia, in a position to provide the basic ingredients of that reproduction of capital; national resources; local markets and the capacity to breakthrough into the world market in competitive conditions; financial circuits making it possible to centralize the surplus and direct it to productive uses; and technologies in use at the level of development of productive forces reached” ( Amin, 1992:54). The states, therefore, made a difference in the lives of people and the state officials, institutions and resources have reshaped the political, economic and social lives of society. For example, in South Africa, the state became an instrument to accumulate, utilize and allocate capital in the interests of the white community. Recent concerns on the state center on the exact nature of state autonomy in the context of globalization, maintain a distinction between the weak and the strong state, soft and hard as well as socially embedded, de-coupled or captured by the class, etc. Political realists maintain that the states cannot be entirely reduced to societal power—class, caste, elite hegemony, religion, ethnic group or the structure of capitalism and are not intrinsically predatory. Nor social power can be reduced to or couched in the state power and its mechanism. The subordination of society to the state may be illegitimate while the subor-dination of the state to society may discourage political order, institutionalization and stability. States operating along such lines are facing societal de-legitimation, rationality deficit, crisis of overload, ungovernability, over accumulation etc. Neither are the states intrinsically benevolent serving the interests of citizens for freedom and development. Realists tend to agree that “the state is capable of acting more or less


One prominent scholar on development argues that problems of development in the contemporary world can only be clarified in the light of “the choices of alternative institutional arrangements and what this implies for the constitutional choices people might make; the collective choices that might be taken, given the terms and conditions that apply to the organizations and conduct of governments; and the great multitudes of operational choices that become available when people can relate to one another through diverse institutional arrangements, organized according to rules that are constitutive of fair games” (Ostrom,1999: 184).

purposefully in pursuit of larger economic or geopolitical goals; and they clearly regret those occasions on which the state is not autonomous, believing in particular that this adversely affects the conduct of foreign policy” (Hall and Ikenberry, 1997:12). The impact of state on society and the modes of popular consent, even opposition to institutional processes from which political culture is derived are important to grasp the nature of state—weak or strong, soft or hard, autonomous or embedded, and developmental or predatory. The direct intervention by the state against society to suppress opposition, contain dissent and control societal pressure easily provoke exclusionary aspirations and, consequently, ignite resistance to violate all the constitutional taboos and thus resort to rebellion. Egalitarian societies with robust political opposition provide fertile ground for synergistic state-society relation while in-egalitarian society with fragmented and dependent political groupings resorts to dissimilar strategies posing anti-synergy for governance and development. The social formations—nations, castes, classes, communities, civil society and social movements— from which political class or leadership emerge are central process of institutionalizing politics in society. Because it is from this process emerge a visionary and efficient type of leadership with the ability to shape the state and society nibble in right direction. Only such leadership can establish a positive role for the state in promoting coordination in society through rational control of the environment, maintaining a modicum of harmony among the sub-systems of the state and steer society towards common ends of development.
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