Thanks Heather, for your comment. I responded to Suvojit using what looked like the postmodern generator (http://www.elsewhere.org/pomo/ -- generates random essays). I am all for opening up a wider discussion on the role of the state, and I can't see how to have that discussion without bringing in political philosophy, notions of state legitimacy and the relationship between a state and its citizens. That discussion should be had, it will always remain a contested site, and we should ensure adequate space for contestation through argumentation rather than (what Paul Starr calls) "cultural authority". A couple of (negative) examples may help clarify what I mean by encouraging contestation and debate.
One is the idea that we should look for a "champion" or try to get a "seat at the table", to "push our ideas". I find that problematic, first, because it circumvents a larger process of democratic conversation around difficult questions, which in turn undermines the institutions necessary for informed debate. Equally, some of the worst policies around the world have been perpetrated by experts who were convinced that what they were "pushing" would help the poor. Just given the nature of our work, its likely that 95% of the times, we miss important things or just get it flat out wrong. So, ensuring open debate is, for me, an extremely important priority.
The second example is a favorite of donors--capacity building. Nick van de Walle, in his wonderful work on the "Permanent Crisis" in Africa takes this head on. His point is that capacity is endogenous to the functioning of the state and he makes it beautifully by showing that even as the number of tertiary graduates in some African countries increased after independence, the "capacity" of the state declined. So, low capacity states are not necessarily states that don't know how to build capacity, its that they may not want to. The lack of state capacity fundamentally reflects an underlying breakdown of the relationship between the state and its citizens. Much of Daron Acemoglu's work shows precisely how such a breakdown can persist for a long time, and its detrimental effects on development. Unfortunately, while perpetuating such a breakdown seems to take precious little (Acemoglu's work often relies on breakdowns arising from colonial rule, for instance), building it back appears to be a long, hard route, with no clear directions from the research thus far.