The political economy literature has focused far too much on “institutions” that constrain the state and comparatively little on state capacity itself. (I’m thinking about the newer quantitative literature and not the comparative politics literature, which is much deeper). Many papers confuse institutions and state capacity.
Anyways, this new paper by Francis Fukuyama looks very promising:
This paper points to the poor state of empirical measures of the quality of states, that is, executive branches and their bureaucracies. Much of the problem is conceptual, since there is very little agreement on what constitutes high-quality government. The paper suggests four approaches: (1) procedural measures, such as the Weberian criteria of bureaucratic modernity; (2) capacity measures, which include both resources and degree of professionalization; (3) output measures; and (4) measures of bureaucratic autonomy. The paper rejects output measures, and suggests a two-dimensional framework of using capacity and autonomy as a measure of executive branch quality. This framework explains the conundrum of why low-income countries are advised to reduce bureaucratic autonomy while high-income ones seek to increase it.
I would personally put my money on a decidedly unsexy word–“bureaucracy”–becoming one of the most sexy and important topics of PE research in the next few years.