My first post on this topic was prompted by reading newspaper stories about Afghanistan and having lunch with Jim Robinson shortly afterwards.  (For example, Karzai is sacking trusty lieutenants and moving to form a coalition with the Taliban and perhaps Pakistan.)  But who has thought deeply about this issue and come up with some interesting insights?  The answer is of course: Roger Myerson.  He has an informal overview of his thoughts on state-building.  To understand his ideas fully, you have to read the overview.  Here are a few insights I pulled out that are most related to my earlier post.

One issue I raised was: How do you ensure political competition is constructive not destructive? Myerson says the key is that the losers in any political competition feel they have the opportunity to win a future competition.   Otherwise, what choice to they have but to compete from outside the political system and trigger conflict?

An alternative might be to install a puppet dictator who faces no competition.  But here I repeat my earlier point: this dictator will be rapacious and steal from his citizens.  To keep him in line, constructive political competition is necessary.

Myerson’s overview has his thoughts on how to build constructive national and local competition.  Again, I recommend you take a look.