Occasional Paper Series COD #5. Towards An Agent-Structure Approach to Understanding the Rise of Reformative State and its Choice of Policy

Even the most ardent advocate of neo-classical economics would admit that the state has a role to play in the economy, especially in the provision of public goods. In reality, many states in the South do not have the capacity to perform even the minimal functions that neo-liberal economists advocate, much more of a developmental state. Many scholars attribute the effective implementation of policies to state capacity. However, the concept of state capacity is one step ahead. Institutions have to be put up to transform an "incapable" state into a "capable" one. The transformation experiences of Third World countries vary and, in many of them, have been problematic. Some have succeeded while others failed. The paper introduces the concept of reformative state which is described as the state's receptivity to and capability to adopt change. The success rate of adopting new policies becomes higher when the state reaches its reformative status. What accounts for the rise of reformative state and under what circumstances does receptivity to change occurs? The article provides a discourse of the current literature on the reform process. The primary aim is to advance a framework for inquiry which will aid scholars and policymakers understand what delays or speeds up the state's receptivity to reform. The proposed framework combines both the agent and structure approaches and assumes that their interaction is dialectic.