World Development Report 1997, the twentieth in this annual series, is devoted to the role and effectiveness of the state: what the state should do, how it should do it, and how it can do it better in a rapidly changing world.
These issues are high on the agenda in developing and industrial countries alike. For many, the lesson of recent years has been that the state could not deliver on its promises: transition economies have had to make a wrenching shift toward the market economy, and much of the developing world has had to face up to the failure of state-dominated development strategies. Even the mixed economies of the industrialized world, in response to the failures of government intervention, have opted for a decided shift in the mix in favor of market mechanisms. Many have felt that the logical end point of all these reforms was a minimalist state. Such a state would do no harm, but neither could it do much good.