
TL;DR
This paper presents a theory explaining how states can maintain nominal sovereignty without effective capacity due to institutional, geopolitical, and recognition dynamics, with Palestine as a key example.
Contribution
It introduces a novel political-economy model of statehood without capacity, highlighting the divergence between symbolic recognition and actual state functions.
Findings
States can remain recognized without effective capacity due to external transfers and weak incentives to consolidate.
Recognition and legitimacy can increase independently of domestic administrative performance.
The model explains phenomena like fiscal fragility, corruption, and conflict vulnerability in weak states.
Abstract
This paper develops a political-economy theory of statehood without capacity. I argue that under specific institutional and geopolitical conditions, a polity can become trapped in an equilibrium of nominal statehood: a state in which claims to sovereignty, external recognition, and symbolic legitimacy persist or even strengthen while the coercive, fiscal, administrative, and legal capacities required for effective statehood remain weak. The mechanism is driven by three forces. First, fragmented elites may privately benefit from preserving autonomous control, patronage, and localized rent extraction rather than consolidating authority into a unified state. Second, externally mediated transfers can reduce the immediate costs of institutional non-consolidation and thereby stabilize a low-capacity equilibrium. Third, international recognition and symbolic endorsement may be only weakly…
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