In the following section, I provide a framework for analyzing the Ceara story, applying the logic of economic theory. But before that I anticipate the following question that might arise naturally in readers’ minds: if the Ceara example has been around since the 1990s, why has this strategy— of a media blitz combined with public sector management reforms—not been tried elsewhere where primary health services are sorely needed? How is the Ceara example different from, say, the media campaigns to eradicate polio in India? I answer these questions as follows. The case of Ceara is different because the media campaigns were not primarily targeted to achieve _household_ utilization of _one_ health input (such as, the polio vaccine), but rather _municipal politicians’_ support of the _professionalization of local public health systems_ .

The reason the Ceara example has been sitting around on the shelf for so long is that reform leaders have not received these ideas from experts, until now. One, because policy-relevant questions of state capacity to deliver public goods have been falling through the cracks between disciplines. Economists have not taken sufficient account of politics when generating knowledge and giving policy advice. Political scientists have not examined equilibrium economic policy outcomes of political markets, and how transitions can happen from a low-level to a higher-level equilibrium. Two, international development partners fear political sensitivities when raising the role of politics in development. This inhibits policy dialogue on addressing political constraints in the problem of building state capacity. Three, my extended interpretation of the Ceara example is new, and motivated by advances in political economy research since the 1990s on the role of politics in shaping norms in the public sector. Applying the lessons from Ceara is not as simple as replicating it;<sup>4</sup> rather, the Ceara case serves to support the following theoretical framework which links politics to bureaucratic productivity. Lessons can be tailored to other contexts using this theoretical framework to understand the problem of state capacity.

# **_Understanding state capacity: A framework_**

Economic theory lends itself to a framework to understand state capacity within a series of interdependent “principal-agent” problems in which one type of actor, the agent, takes actions on behalf of, or at the behest of another, the principal.<sup>5</sup> Public policies are selected<sup>6</sup> and implemented by the state within the following principal-agent relationships illustrated in Figure

> 4 The success of the media strategy adopted by Ceara’s reform leaders might be difficult to replicate. For example, in places where politics is polarized along party lines, information provided by senior political leaders might not be credible to all citizens. The following sections will break down the problem of how politics influences state capacity to derive lessons for different entry points across different contexts. 5 This framework was developed in the World Bank’s Policy Research Report on governance (World Bank, 2016).

> 6 State capacity involves both take-up and implementation of policies. Part of the problem of state capacity is to foster a culture of policy-making on the basis of technical merit, accessing “experts” and debating options on the basis of the best available evidence.

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