In recent years, the World Bank has been at the vanguard in pressing for a circumscribed role for the State in developing countries. It therefore comes as somewhat of a surprise that the 1997 World Development Report (WDR–the World Bank?s annual flagship publication), The State in a Changing World, underscores the continuing significance of the State in LDCs.
The WDR is generally successful as a didactic device, both in refocusing attention on roles and capabilities that enhance state effectiveness and as a guide to policy makers on the "what": the State?s role must focus on social and economic fundamentals, but should always be tailored to capabilities. It is, however, much weaker when it comes to the "how". Its recipe for reinvigorating institutional capabilities—increased competition, decentralization and participation, and international collective action—is neither controversial nor novel. Myriad exercises at quantification to "prove" its case, especially with regard to the importance of State "credibility", are often misplaced and analytically flawed. And by avoiding contentious issues at the heart of the State, in particular those related to politics and power, and instead genuflecting to current intellectual fashions, the report says more about the World Bank than the role of the State in LDCs.