In the early years of this century most of the legal and judicial reform work of International Development Agencies (hereafter IDAs) focused mainly on state institutions. Today, things have changed. After the disappointing outcomes of many years of legal and judicial reform and in view of the enormous challenges posed by state building in numerous fragile and failed states, IDAs are beginning to accept that governance and justice mechanisms that operate either outside the framework of the state or in the fringes between state and society — non-state justice systems (hereafter NSJS) — are indispensable components of reform processes aimed at improving the overall performance of legal and judicial institutions. The materials discussed in this paper, drawn from Latin America and Africa, suggest that any successful engagement with NSJS requires a deep understanding of both local state structures and political processes. It also requires an in-depth understanding of the state and community within which NSJS operate. Indeed, as this paper shows, successful engagement should be seen as part of a continuing process of state building. Unless IDAs are willing to take a wider and more political approach to their involvement with NSJS, they will not achieve meaningful progress in rule of law and governance projects.