Summary The World Development Report 1997 provides a refreshing perspective on the state in developing countries. It suggests a strategy to increase state effectiveness by matching roles to capacity while also increasing state capacity. However, the attempt to combine a narrow technocratic and a broader political approach to governance issues leads to contradictions. In this article, several problems inherent in policymaking processes in developing countries are reviewed. The Report underestimates problems related to the autonomy of the state in policymaking, and exaggerates the value of the solutions it recommends. Further, the Report pays insufficient attention to the international factors affecting policymaking in developing countries, including the influence of donor institutions and inconsistency of donor policies towards developing countries.