Low State Capacity in Southeast European Transition Countries

Under socialist rule, the state in Southeast European countries ranged from the totalitarian to the more liberal. When transition began about ten years ago, much discussion revolved around the role of the state, especially in a market economy. However, this new role was not understood or implemented correctly. Several state failures during transition in the Balkans paint a picture of low state capacity and weak states. ¹ Moreover, the state in several countries has failed to develop comprehensive reform strategies, evidenced by poor public governance, high corruption, inability to introduce a proper legal framework and weak institutions, public and private. How does one define low state capacity? Several state weaknesses have accompanied transition in Southeast Europe, including first, low capacities to provide public goods and services, ² such as public governance, health and education systems, social services and security; and second, an inability or unwillingness to enforce rules of law in a democratic context. This article examines how the concept of low state capacity in Southeast Europe relates to public governance, institutional reform, the extent of corruption and the unofficial economy, and structural changes and economic performance. The paper concludes with some policy implications.