ABSTRACT
Three interrelated sets of institutional mechanisms can improve the credibility, accountability, and responsiveness of governments: effective rules and restraints, competitive pressures, and voice and partnerships. This chapter illustrates how a combination of institutional mechanisms can improve the state's institutional capability to undertake collective actions at the lowest cost to society. It discusses formal checks and balances, including judicial independence and the separation of powers. The chapter examines institutional mechanisms to build a more capable public sector in three core areas: policymaking, service delivery, and fostering motivated, capable staff. It shows that corruption is a symptom of underlying incentive problems, which can be addressed using the same mechanisms that enhance state capability more broadly. In Guinea, for instance, an exercise to cost out policies to meet the government's stated priorities revealed that the three priority programs were grossly underfunded and that their share would need to triple over four years.
