The Problem of State Weakness
In the late 1980s and early 1990s, when the "third wave" of democratization was sweeping over much of the globe, it was widely held among scholars and policy makers alike that democratic reform entailed shrinking or neutralizing the state.
Yet after a decade during which so much emphasis has been placed upon restraining the state, a look at the political map of the world reveals scores of fake or incomplete democracies, and even a few cases of outright "democratic reversal."
Small wonder then that more scholars are coming to see the viability and effectiveness of state institutions as essential to prospects for democracy. As Samuel P. Huntington notes, "authority has to exist before it can be limited." 1 No matter how democratic a government is, if it cannot perform basic state functions its people will not benefit from it.
A democratic regime that is viable and effective, therefore, will be a compound of state-enabling institutions and democratic institutions. The former will enable the government to govern, while the latter will enable citizens to hold the government accountable.
A further implication is that in many cases democratization will involve two separate processes:
1) a process of transition from a nondemocratic regime to a more or less democratic one, and
2) a process of state building or rebuilding—which means in turn [End Page 36] that it is ill-advised for any country to damage or weaken essential state capacities during its transition.
Essentials of an Effective State
To govern effectively, the state must have the ability to perform the following six critical functions:
1) Monopolize the legitimate use of force. By Max Weber's definition, the basic test of statehood is whether or not the national government can lay claim to a monopoly of force in the territory under its jurisdiction, with military services and police agencies capable of repelling foreign foes and preserving domestic order. Here I want to emphasize the importance of developing a professional, resourceful, dedicated, disciplined, and uniformed police force governed by law. Interestingly, although repressive regimes are often called "police states," they actually tend to have fewer police officers per citizen than do free societies, where the police are more plentiful and more restrained.
2) Extract resources. Just as a human cannot live without blood, so a state cannot function without revenue. It is the availability of resources that permits the state to carry out its other tasks. In this sense, an effective government must be able to extract sufficient resources from the society, aggregate those resources into a national pool, and use them for national purposes. If a state is not fiscally viable, it cannot be effective.
3) Shape national identity and mobilize consent. Maintaining order by coercion alone is not feasible over the long term. There must be some shared identities and values that go beyond local or kinship ties and knit together the society as a whole. The recent history of the Balkans, Rwanda, Indonesia, and parts of the former Soviet bloc remind us that the absence of an overarching national identity can be a centrifugal force of frightening power. A state also needs a citizen body characterized by a certain baseline moral unity—a set of core principles that go beyond mere national identity—if it hopes to govern without having to resort to excessive and costly coercion.
4) Regulate society and the economy. Modern societies are full of hazards engendered by industry, commerce, urbanization, and asymmetries of power and information. To protect people and the environment, therefore, the state needs to pass rules affecting many aspects of economic and social life ranging from weights and measures to food and drug quality, safety standards, and even parental powers and duties. Although there is surely a place for arguments about the proper bounds of [End Page 37] the "regulatory state," no one can deny that all reasonably well-ordered modern societies, whether democratic or not, are highly regulated.
5) Maintain the internal coherence of state institutions. A modern state needs an effective bureaucracy, meaning a large and complex set of organizations with many moving parts whose gears must mesh. Neither the common bureaucratic tendency toward "departmentalism" nor the corruption or incompetence of individual officials can be allowed to reach the point where they undercut the internal coherence of the state administration itself.
6) Redistribute resources. Redistribution refers to the authoritative reallocation of scarce resources among different social groups. Its purpose is to provide the least fortunate with economic security as well as to forestall the political instability that tends to bedevil societies where there are gross disparities of wealth and few or no opportunities for social mobility. A moderate redistributive policy enables the state to maintain order and enhance its legitimacy.
Governance Crisis in China
Measured by these six criteria, the Chinese Communist party-state is a weak one. It is highly intrusive, making huge claims to authority and seeking to penetrate every corner of society, but intrusiveness is not effectiveness. In fact, an intrusive state may be bad at making and implementing policy, and even at handling routine administrative tasks. China's two-and-a-half decades of market-based reform, deepening integration with the world economy, and unprecedented prosperity have only made the state's ominous "capacity deficit" more glaring. As China's economy and society become ever more complex and open, the country's political and administrative institutions lag ever farther behind. Indeed, numerous signs indicate that China is in the midst of a deep and perhaps overwhelming crisis of governance that encompasses each of the six dimensions discussed above.
The first sign of the governance crisis is the lawlessness that besets so much of China. The annual number of reported crimes per 10,000 persons has exploded, going from 5.5 in 1978 to 28.8 in 2000. The incidence of violent crime has risen even faster, especially in the last few years. The country's understaffed, underfunded, and underequipped law-enforcement agencies cannot cope. The old Maoist approach to crime prevention through neighborhood and work-unit surveillance committees no longer works in a vast society with an increasingly mobile population. With just one officer for every thousand residents, China is one of the most sparsely policed countries in the world. In certain localities, criminals actually outnumber and outgun peace officers, 443 of [End Page 38] whom were killed in the line of duty during 2001. Some local police departments have been subject to criminal infiltration or corrupted into providing paid protection for gangs who rule the streets and break the law with impunity.
China's public finances are a mess. The overall tax burden remains heavy, especially for farmers, even as many county and township governments in central China cannot pay salaries and pensions regularly or even provide basic public services. Central-government revenues have averaged a very low 8 percent or less of GDP in recent years, leaving Beijing conspicuously unable to perform many vital governmental functions, including financing a modern police force. As figures for 2000 reveal, moreover, formal government revenues at all levels equal only about 15 percent of GDP while so-called informal revenues kept spiraling upward, and now probably total two-and-a-half times the amount of formal revenues. No other country in the world has seen so many public funds go into off-budget accounts. Collected in the name of the state but subject to fewer controls than formal revenues, informal revenues furnish ample opportunities for official graft and corruption.
National identity is not a fully resolved issue in China, but it poses no major threat to the country's territorial integrity. Only in parts of Tibet and Xinjiang can separatism claim a limited degree of popular support. More dangerous is a spiritual void in this country of 1.3 billion souls. After the foundation of the People's Republic in 1949, Maoism purported to provide a sense of purpose. Whether it ever actually did so, there is no doubt today that the rise of commerce and markets has reduced Maoism to little more than a shell of its former self. As social disparities widen and corruption and insecurity mount during a time of dizzying change, millions of Chinese find the world around them pitiless, alienating, and devoid of meaning. Many have become cynics. Others long for spiritual moorings, wishing for the seeming "good old days" of Mao or flocking to established religions such as Christianity and Buddhism or new sects such as the officially banned Falun Gong.
The fragility of the Chinese state is also manifest in its sadly inadequate regulatory capacity. Widespread counterfeiting is a telling example. Nearly anything can be faked, including not only Rolex watches but seeds, fertilizer, pesticides, medicines, agricultural machinery, official seals, identity cards, passports, car-inspection stickers, tax invoices, licenses of all kinds, marriage certificates, servicemen's certificates, customs documents, bank notes, coins, Harry Potter books, World Cup trophies, and more. Forged university diplomas are so common that the 2000 national census recorded at least 600,000 more college or university graduates than the actual number of degrees awarded. Even those dressed in police uniforms may not be real police officers. Over the last five years, the government has uncovered nearly 320,000 fake police [End Page 39] uniforms, badges, vehicles, and weapons and detected some 10,000 phony police officers. In 2001, 192,000 people died after using bogus or poor-quality medications. Despite government efforts that led to the shutting down of 1,300 pharmaceutical factories, or half of the entire industry, that year, the first half of 2002 brought an additional 70,000 deaths from fraudulent drugs.
Horrific as those figures are, more deadly still has been the state's inability to regulate workplace safety. The number of reported deaths from industrial accidents has increased every year since the early 1990s. In the first half of 2002 alone, more than 53,000 people died in almost 450,000 workplace mishaps. Nearly 3,400 of the dead were miners killed on the job. As Earth's largest coal producer, China has an output that is somewhat higher than that of the United States, but the Chinese death rate per million tons mined is more than 100 times the U.S. rate and 20 times the world rate. While in decades past a handful of large state-run mines dominated the industry, today Beijing faces the nearly impossible task of regulating thousands of small privately owned mines, many of which are deathtraps. The government has reduced the number of open mines from 82,000 in 1997 to about 15,000 currently, but fatalities remain appallingly high.
The Chinese state is often viewed as a machine whose parts all mesh smoothly. In fact, the system of central control and coordination is largely a sham. Closer to the mark is Kenneth Lieberthal use of the term "fragmented authoritarianism" to characterize the regime. The problems of fraud and workplace fatalities—which persist despite what must in all fairness be acknowledged as serious central-government campaigns against them—expose not only the Chinese state's inability to regulate society but also that state's inability to get its own agents to do their jobs. Some officials are simply corrupt, and wink at dishonest or dangerous enterprises in return for bribes. Other officials, particularly at the local level, see millions of people looking for work and want to help generate jobs even if it means tolerating unsafe or unsavory businesses. Besides, cash-strapped local governments rely on such activities for tax income, while central decrees often appear as nothing but unfunded mandates. So corruption and other forms of disregard for law continue apace, with each new scandal further eroding the moral foundation of the regime.
In retrospect, reform in China has gone through two distinct phases. The first began in 1978 and ended around 1993. During this span, reform was a "win-win" game; all segments of society benefited in absolute terms, even if some did better than others. Starting around 1994, however, growing unemployment and rapidly widening inequality began to make large numbers of farmers and workers net losers, even in absolute terms. The game of reform had become a zero-sum affair, in which some gained at the expense of others. Today, China is a much more socio-economically [End Page 40] unequal society than ever before in the history of the People's Republic, with the Gini index of inequality in income distribution at around 0.43 now as compared with 0.32 in 1980.
To the extent that this is a problem, redistribution by the state could be the answer, but the Chinese government's weak extractive capacity severely limits its ability to play this role. In 2000, China's spending on social "safety-net" programs accounted for less than 1.2 percent of GDP. Public spending on education and health care amounted to less than 3.5 percent, a far lower percentage than the corresponding figure that one finds in most countries, including developing ones. As a result, despite a fast-growing economy and prosperity for many, China has also seen living standards fall among a large section of its population, leaving behind a legacy of frustrated expectations, reduced support for market-based reforms, exacerbated grievances, heightened conflicts, and intensified pressures upon the state.
All the symptoms of the "governing-capacity deficit" identified above are most readily apparent in rural central and western China. In some parts of the Chinese countryside, state institutions have simply stopped working and traditional clans or criminal gangs are filling the vacuum. With even the most basic tasks required of the modern state being left undone, rural dwellers are coming to view the state as more than anything else a nuisance to be avoided in their daily struggle for survival.
A New Priority
Since an effective state is a prerequisite for democracy and China currently does not have such a state, it would be folly for China to follow the conventional third-wave wisdom and conceive of pursuing democracy as a matter of weakening state institutions. The governance crisis has already caused grave social harms; if left unchecked, it could damage China's prospects of becoming a full-fledged democracy. For this reason, rather than singlemindedly trying to restrain state power, democratic reformers should make efforts to strengthen state capacities in the course of democratization.
There are four additional reasons for China to embrace the rebuilding of the state as the nation's top priority. First, most Chinese have a desire for their government to become more capable of performing essential state functions effectively and efficiently because state incapacitation has done a great deal of harm to their socioeconomic well-being. Second, democracy by itself cannot cure state incapacity. Special efforts must be made. Third, democracy—precisely because it allows the widest possible competition for political power and therefore institutionalizes uncertainty—positively demands a highly effective state that can keep the nation's business moving forward despite political turnovers. The challenges brought by liberalization and democratization to a country [End Page 41] like China only underscore this need. Finally, democratization will unleash forces that are likely to put enormous pressures on the system. The end of authoritarianism may usher in territorial disintegration; popular respect for government may plummet; rising expectations may outstrip the government's ability to respond; the demise of the old ruling party may leave behind a vacuum; and pressures for greater uniformity (a result of expanded citizenship) may expose and exacerbate previously suppressed regional, ethnic, class, and religious tensions.
None of this is to say, of course, that a crisis of governance constitutes an excuse to embrace an ironfisted state. While an effective state is a necessary condition of stable democracy, it is by no means sufficient. The best strategy for China is democratic state rebuilding—namely, to strengthen essential state governing capacities while institutionalizing "inclusive participation" and "public contestation," two basic features of democracy as described by Robert A. Dahl. In China today, socioeconomic polarization; urbanization; and increases in literacy, education, and media exposure have conspired to give rise to enhanced aspirations for participation in decision making. If groups within society cannot find institutional channels through which they can express their needs and interests, their repressed discontent could erupt in violence. To let off some of the steam, the state must gradually incorporate those social groups that acquire political consciousness during the process of transition and guide their participation in ways that foster political integration.
In this sense, institutionalized participation constitutes not only a
device to mitigate the domination of the state but also a safety valve
by means of which the state can reduce state-society tensions. In the
long run, as the variety and complexity of interests being articulated
increase, the time will come for the country to replace its monopolistic
structure of interest aggregation with a competitive one.
Shaoguang Wang is a professor of political science at the Chinese University of Hong Kong. He has authored or coauthored more than a dozen books, including Failure of Charisma: The Chinese Cultural Revolution in Wuhan (1995), The Political Economy of Uneven Development: The Case of China (1999), and The Chinese Economy in Crisis: State Capacity and Tax Reform (Studies on Contemporary China) (2001).
1. Samuel P. Huntington, Political Order in Changing Societies (New Haven: Yale University Press, 1968), 8. See also Adam Przeworski et al., Sustainable Democratization (Cambridge: Cambridge University Press, 1995), 13; and Juan J. Linz and Alfred Stepan, Problems of Democratic Transition and Consolidation: Southern Europe, South America, and Post-communist Europe (Baltimore: Johns Hopkins University Press, 1996), 17.