Chapter 1 introduces the central puzzle the book seeks to solve. We start from the proposition that limited statehood is not a historical accident or some deplorable deficit of most Third World and transition countries that has to be overcome by the relentless forces of economic and political modernization in an era of globalization. We suggest that “limited statehood” is here to stay. Governance research has to account for limited statehood. Accordingly, we ask how effective and legitimate governance is possible under anarchy. How can political rule as well as security and other collective goods be provided when the state is weak or even absent? Areas of limited statehood are neither ungoverned nor ungovernable. We find great variation with regard to effective and legitimate governance, pertaining to both rule-making and the provision of public goods and services. The chapter goes on to discuss the book’s theoretical contributions in addressing this puzzle, as well as its normative, political, and world order implications. We conclude with a roadmap of the book.

Chapter 2 introduces the main concepts, namely “areas of limited statehood” and “governance.” We discuss functional and institutional conceptualizations of the state and explain why we settle for an institutional understanding in the tradition of Max Weber. We conceptualize areas of limited statehood as referring to those spaces where state institutions are too weak to implement and enforce central decisions and/or to uphold a monopoly of the use of force. We continue by discussing measurement issues and providing empirical examples for measuring limited statehood, including subnational levels. We then turn to introducing our understanding of “governance,” which we define as institutionalized modes of social coordination to adopt and implement collectively binding rules, or to provide collective goods and services. The chapter concludes with a discussion of several issues emerging when applying the governance concept to areas of limited statehood. This concerns, on the one hand, the distinction between the “public” and the “private” spheres common to Western modernity, which has to be adjusted to conditions of limited statehood. On the other hand, the inherent intentionality and normativity of the governance concepts need to be taken into account.

Chapter 8 summarizes key findings of the book and explores the feedback loops between legitimacy, institutional design, social trust, and effective governance. We also discuss various implications of our findings. First, we turn to the ambivalent role of the state in areas of limited statehood. Effective governance in most issue-areas is not possible without some degree of security and without some basic infrastructure. Yet, the residual state often behaves as a governance spoiler rather than an active supporter. It needs to be tamed by the rule of law and participatory institutions. Second, we discuss the implications for international affairs. The international system shares the “anarchy problematique” with areas of limited statehood. Many IR theories are highly relevant for explaining effective governance in areas of limited statehood – and vice versa. The global governance system and areas of limited statehood are also firmly intertwined in a multi-level governance system. Third, we discuss the political implications of our findings. Most analysts and policy-makers alike agree that comprehensive state-building efforts in ALS have largely failed. Rather than lowering our normative standards, we suggest a paradigm shift from state-building to governance promotion.