State theory is faced with a similar paradox: the massive expansion of bureaucracy, the continuous growth of public budgets and the increasing number of government interventions do not strengthen, but rather weaken the state. In general, experience shows that the great extension of state activities exceeds the capacity of political systems, leading to what has been called ‘governmental overload’.

For Pradip N. Khandwalla, Professor of Organizational Behaviour at the Indian Institute of Management, the decline of the contemporary state across different countries was the starting point of his reflection on the future of the state. But Khandwalla does not want to stop with the analysis of the state’s problems: his aim is to go beyond the analysis and to seek working solutions which would then be designed to revitalize the state.

His investigation is led by two principal questions: first, how to ensure that the state is responsive to citizens’ demands and serves the public’s long-term interests. The second question deals with the problem of the effective management of the state. To get a solid analytical basis for his proposals, Khandwalla identifies four different types of states which have the strongest influence on the formation of societal and political development in the twentieth century: the interventionist welfare state, the developmental state, the ‘reinvented’ entrepreneurial state, and the World Bank model of the human market-friendly state.

In his analysis, Khandwalla attempts to show that there are two main areas in which the failure of the state becomes evident: governmental bureaucracy and the polity. In both fields, the author claims, ‘the machinery of the state has been hijacked by self-seeking politicians and bureaucrats, often in connivance with corrupt businessmen, so that plunder has supplemented mismanagement’.

Based on these analytical categories of state types, the author illustrates which specific problems occur in different countries and why they occur with the help of international and intersectoral case studies. Whereas the western welfare states with interventionist traditions fared rather well in coping with the problems, among other ways by reinventing entrepreneurial state models, the ‘world’s poor societies have not in the main been served well by their states’.

For the first aim of revitalization – recharging the bureaucracy – it should be noted that the efficiency of bureaucracy is undermined by typical bureaucratic elements such as fully specialized departments and their standard operating procedures. This results in specialists tending to lose sight of generalist concerns. Therefore, one instrument to avoid sub-optimal results would be to have better co-ordination between different organizations. As several case studies of Commonwealth and East Asian countries indicate, there is indeed a possibility of strengthening the efficiency of bureaucracy, for example through the institutionalization of values like quality, productivity, discipline, etc.

Another way to make bureaucracy more effective and closer to the people is to give the units of the state more autonomy. One of the important advantages of fragmenting and decentralizing the state is the fact that, on the one hand, more autonomous public units have greater freedom to be innovative; but on the other, their responsibility and the pressure of good performance increase, since they are confronted with their customers’ rights on a daily basis.

Downsizing the state by selected forms of privatization or deregulation could be another important instrument for revitalizing the state. For instance, the field of telecommunication policies in varying countries demonstrate that deregulation or privatization of former governments’ functions promotes competition and serves the customer’s needs.

In a next step, Khandwalla gives some advice on how to promote the work of politicians and of the government. Strategies such as strengthening fair representation of voters’ interests or testing the competence of politicians are discussed and are widely highlighted by several examples. Finally, the book gives proposals on how this knowledge could be used to improve the efficiency of the Indian state.

Khandwalla’s book is worth studying, especially since he stresses that there is no ‘best way’ for revitalizing the state – the strategies and instruments must be selected with regard to the institutional conditions and the level of development of a country. To say it in his own words: revitalization has to be ‘tailor-made to the state’s context’. Although Khandwalla approves strategies like privatization or deregulation, he recognizes that a minimal or even ‘nihilist state’ is not the solution for the current problems. Especially in developing countries, it would be dangerous to view the market as a panacea for the state’s defects. On the contrary, the case studies indicate that welfare in poorer societies needs to be supported by vast public activities.

Of course, one could criticise a few of Khandwalla’s proposals on several accounts. He generally seems to underestimate the fact that the intended revitalization depends on political support and that political processes and negotiations tend to be slow moving. In his book, how successful reforms should be designed is widely discussed, although taking the fact of different institutional arrangements into account, there is still little discussion about the complicated bargaining processes between different political actors in the various political systems. Furthermore, the author’s statements regarding reinvention of the democratic state are sometimes too generalized, for example in his discussion of the positive effects of direct democracy. It is necessary to remember that direct democracy may help those politicians who use this form of election only as an instrument for their personal aims. In another perspective, direct democracy does not necesssarily foster innovative political decisions, since political actors fear that their decisions may be rejected.

In summary, Khandwalla’s book is a useful source for scientists and practitioners alike who are dissatisfied with the simple complaints about the state’s defects, and who aspire to know which solutions actually do exist.