This chapter focuses on the processes of state formation in developing countries. Until recently most economists ignored the relationships between state formation and economic development. Nevertheless, political and economic developments are closely interconnected. For example, it is of little use to discuss the economic development of Nicaragua in the 1980s without taking the war with the USA into consideration. Also, it is not much use analysing the economic development of African countries, if one does not realise that many countries on the African continent are in a state of open or latent civil strife or international conflict. At the moment of writing (2003), this applies for instance to countries such as Burundi, Congo, Côte d'Ivoire, Liberia, Nigeria, Rwanda, Sierra Leone, Somalia, the Sudan and Zimbabwe (Marshall and Gurr, 2003).

The political aspects of development will be discussed from two perspectives with which the reader will by now be familiar. In the first place, the interactions between state formation and economic development will be analysed. In this context an interesting paradox comes to the fore. The tasks and demands nowadays facing the government apparatus in developing countries are heavier and more comprehensive than ever before in economic history. At the same time, the apparatus of government is less well-equipped to fulfil these tasks.

In the second place, the characteristics of state formation and political development will be discussed as important independent aspects of development in their own right.