Chapter 6 examines the development and implementation of Peru’s 2009 Universal Health Insurance (Aseguramiento Universal en Salud (AUS)) reform. Unlike other Latin American cases, Peru’s party system at the time was highly fragmented and non-programmatic – political parties lacked core values and were therefore disengaged from health policy. This void allowed technocrats, particularly those supported by United States Agency for International Development (USAID) and the private sector, to dominate the process. The AUS reform provided formal insurance coverage to millions but failed to specify long-term funding or infrastructure development. Debate around the reform was limited, and key decisions were made by a small group of technocrats and advisors rather than through participatory party politics. As a result, the law was poorly specified, with insufficient attention to state capacity and the practical challenges of expanding healthcare access. The reform led to dramatic increases in theoretical insurance coverage, but actually achieving access to care was hampered by resource shortages, inconsistent funding, and limited political commitment. The Peruvian experience highlights how non-programmatic party systems defer policy authority to technocrats, risking unsustainable reforms that do not deliver on their promises, particularly in times of crisis such as the COVID-19 pandemic.

Chapter 7 investigates how national governments can reduce corporate exposure to climate risks through public policy. It identifies three categories of policies that potentially reassure investors: governance and planning, which encompass national climate strategies and institutional coordination, capacity building, which includes disaster preparedness and public infrastructure for resilience, and incentives and regulations, such as environmental standards and climate-related fiscal policies. The chapter examines whether these policies moderate the negative relationship between climate vulnerability and foreign direct investment identified in Chapter 4. Using cross-national empirical analysis, it finds that in countries where these policy areas are relatively strong, investors’ concerns about climate risk are significantly mitigated. These results suggest that government-led adaptation efforts can serve as credible signals of state capacity and long-term stability, thereby strengthening confidence among multinational firms operating in or entering climate-vulnerable economies.

Chapter 4 examines the policymaking process behind Chile’s AUGE healthcare reform, enacted in 2004. Driven by the center-left Concertación coalition, the reform aimed to expand equitable access to healthcare by providing explicit guarantees for prioritized diseases. The Chilean parties’ strong programmatic commitments were central, ensuring cohesion from agenda-setting through implementation. Political debates focused on balancing public and private sector roles, sustainable funding, and gradual expansion of coverage. Internal disagreements on strategy existed, yet the coalition’s programmatic nature enabled compromise and long-term planning. The reform introduced new regulatory institutions, increased public funding, and improved infrastructure and human resources. Opposition came from right-wing parties, private insurers, and medical groups, but political leadership and consensus-building allowed the reform to pass and be sustained under subsequent governments. Ultimately, AUGE expanded insurance coverage, reduced unmet healthcare needs, and demonstrated how programmatic party commitment shapes effective and sustainable social policy.

In this chapter, we trace the history of how the EU emerged as a leader in using development aid and diplomacy to restrict migration, particularly from Africa. We also broadly describe the scope of migration management projects, including their intended impact on state capacity, economic development, a country’s domestic governance including civil society, and the return of a country’s nationals via forced and voluntary repatriation. We then turn to the EUTF, analyzing where and how the EU spent more than €5 billion across the African continent. We explore which actors benefited the most, what projects received the most funding, and where these interventions had the most impact. Overall, the EUTF prioritized state capacity, security, and economic development, while civil society and other non-state actors received significantly smaller allocations.

Chapter 1 introduces the key concepts of the book, lays out the main argument, and discusses the empirical approach and data used in later chapters. It emphasizes that variation in governance outcomes cannot be understood without examining the incentives and interactions of politicians, bureaucrats, and voters. Ultimately, I argue that politicians in developing democracies have incentives to hire competent bureaucrats but will simultaneously retain tools to influence their career progression. Using tools of career control – interference in bureaucrats’ promotions, work locations, and day-to-day work tasks – politicians can extract bureaucratic loyalty. The introduction also situates the book within existing scholarship. The empirical strategy combines qualitative interviews, survey experiments, and observational data, largely drawn from Ghana but supplemented with comparative insights. Ultimately, the chapter frames the book as an inquiry into how the competing incentives of politicians and bureaucrats shape governance.

Chapter 2 develops the theoretical framework that underpins the book. It argues that politicians in developing democracies face a dual incentive: they need competent bureaucrats who can implement programs effectively, yet they also desire control over those bureaucrats to secure loyalty and political advantage. As a result, politicians often recruit based on merit but retain formal or informal levers of influence, such as control over promotions or geographic transfers. The chapter distinguishes between programmatic and non-programmatic distribution, emphasizing that politicians often require bureaucratic loyalty to engage in non-programmatic distribution. Further, politicians have greater incentives to engage in non-programmatic distribution when local elections are highly competitive. Accordingly, I expect that intense local electoral competition will result in worse governance outcomes, including higher levels of corruption and partisan allocation of public goods. This framework provides the theoretical lens to interpret the empirical evidence presented in subsequent chapters and situates the book’s contribution within broader debates on state capacity, bureaucratic autonomy, clientelism, and democratic accountability.

State intervention can spur development, but only when executed with competence and accountability. This chapter explores when, how, and why state action works. It surveys successful industrial policies and failed ones, identifying the institutional conditions that distinguish them. Rather than demonize or glorify the state, it argues for adaptive, evidence-based strategies that blend public purpose with market discipline.

Chapter 3 finds that regional favoritism in the subnational allocation of development finance was relatively limited under Ethiopia’s Ethiopian People’s Revolutionary Democratic Front (EPRDF) regime (1991–2019). This restraint stemmed from low political competition, which reduced electoral pressures, and from the EPRDF’s ethnic federalism, which ensured ethnolinguistic representation at the leadership level and proportional allocation based on population and tax revenue. The Tigray People’s Liberation Front (TPLF)-led government centralized rents to pursue national development goals, channeling both Chinese and traditional finance into state-led plans regardless of financier conditionalities. This combination of weak political competition, strong state capacity, and centralized rent management helped suppress regional bias. However, the regime’s centralized structure also bred fragility – marked by repressed dissent, a lack of institutionalized succession, and rising ethnic tensions – which ultimately contributed to the EPRDF’s collapse and the outbreak of civil war in 2020.

The Ptolemaic state did not pursue a policy of ‘state monopolies’ in industry and trade. Although state intervention was extensive in some sectors, markets played an important role in others. Fiscal contracts leased out to entrepreneurs shared certain procedures and terminology, but the reality of state control was different in every industry, determined by strategic concerns and practical considerations. Together, these institutions show a pragmatic state concerned primarily with securing revenues from economic activities. While the papyri also highlight the limits of state control and the possibilities to evade regulations, they do not show a general decline of state capacity in the second century. The impact of the regulations on economic performance varied. While the ‘oil monopoly’ caused significant inefficiencies, the same was not necessarily true in other sectors. The regulations stimulated the circulation of coinage, leading to increased market performance, to an extent supported also by state enforcement of agreements and property rights. Finally, the analysis underscores the significant fiscal and economic role of temples and professional associations.

This chapter introduces the central puzzle of this study: why, in contrast to other states in Southern Africa, have Zimbabwean democratic institutions stagnated or even declined since independence in 1980? To begin to answer this question, an overview of the resource sector in Zimbabwe, particularly the large diamond found in 2006, and the development of institutions since Zimbabwe became independent in 1980, is given. Furthermore, an institutional analysis, a brief overview of past studies, and a research design are outlined. In terms of case selection, Zimbabwe is placed in the overall population of cases when it comes to resource curse dynamics, and the concept of the “opaque” state is defined. Furthermore, Zimbabwe is defined in terms of democratization and state capacity, concepts that will be used throughout the study.

This chapter draws on past theories of ownership structure in the oil sector and applies them to the alluvial diamond sector in Zimbabwe. The alluvial diamond sector in Zimbabwe presents a natural experiment for understanding ownership structure in that the state and ruling party have been the same since 2006. Still, at least six different ownership regimes have been attempted. This chapter traces each of these and examines how the unpredictability of ownership in the diamond sector has often led to large-scale diamond smuggling and a regulatory framework reflective of political dynamics. The unpredictability of ownership has, in and of itself, caused difficulty in the Zimbabwean diamond sector and has reflected the unpredictability of state institutions. Thus, this chapter argues that past approaches that have been developed to examine the oil sector of states have some relevance for states that have a large amount of alluvial diamond wealth. However, the unique ability for a large amount of diamond wealth to be smuggled into a small space has made the significant increase in diamond wealth since 2006 a challenge for the formal economy and state capacity.

The final chapter generalizes the theoretical development from other chapters of this book to states in different regions. Venezuela, similar to Zimbabwe, has also experienced many similar dynamics: hyperinflation, decline of the formal sector, and while at one time having a similar if not better level of development to other countries in its region, has now fallen distinctly behind. However, similar to ZANU-PF and the large diamond production after 2006, the PSUV in Venezuela also had a source of funding to perpetuate its rule after 2012: alluvial gold. Eritrea also has some similarities to Venezuela and Zimbabwe, as they have produced and continued to discover a large amount of resource wealth in a single-party dominant political system. Nonetheless, Eritrea may have avoided some of the extreme pitfalls of Venezuela and Zimbabwe. The rapid increase in Zimbabwean diamond wealth and the resulting “opaque” institutions provide lessons for states with a large amount of resource wealth. This study illustrates that different types of resources offer some commonalities but also distinctly different challenges for the institutional trajectory of states and overall capacity.

This chapter develops the book’s main theoretical argument, positing that American economic hierarchy has generally enhanced property rights and state capacity in partner states over the past forty years. It traces the shift in United States’ economic priorities toward property rights promotion in the 1980s, driven by foreign direct investors and exporting firms. The chapter explores the mechanisms linking property rights to state capacity and discusses the contrasting effects of American security hierarchy. It also considers alternative explanations and potential scope conditions.