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The Capability State: Delivering Beyond 2030

Rainer Kattel

What if the key to achieving sustainable development is not just more financing, but more capable states?

The Sustainable Development Goals shortfall is not mainly a financing problem. Four decades of targets, audits and outsourcing built an accountability architecture that left states formally responsible for everything and capable of almost nothing. The alternative – this paper argues – is the capability state: a market shaper rather than a market fixer, built from structural capacities, organizational routines and dynamic capabilities, and led by distributed public leadership rather than charismatic power brokers. A Beyond 2030 framework should pair each goal with a state capacity dimension, fund the building of capable states rather than only the projects they deliver, and measure capability alongside outcomes.

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The capability state

The capability state

Kattel, Rainer | Bonn : Friedrich-Ebert-Stiftung, September 2026

delivering beyond 2030

The Road-to-2030 series calls on leading experts across multiple fields to address the question, “How should we approach a global development agenda beyond 2030?” With papers on financing, economic principles, state capacity, gender justice, workers’ perspectives, peace and security, and other critical domains, the series ex­plores the key questions and challenges to create an ef­fective multilateral framework for global development.

For more information, visit https://ny.fes.de/topics/2030-agenda.html

About the Author

Rainer Kattel is a professor and deputy director at the Institute for Innovation and Public Purpose, UCL. He has published extensively on innovation policy, its governance, and specific management issues. His research interests also include public sector capabilities and innovation, digital transformation in the public sector, and urban governance. His recent books include The Elgar Handbook of Alternative Theories of Economic Development (edited with Erik Reinert and Jayati Ghosh; Elgar, 2016) and How to Make an Entrepreneurial State: Why Innovation Needs Bureaucracy (with Wolfgang Drechsler and Erkki Karo; Yale, 2022). The latter is the 2023 winner of the George R. Terry Book Award by the Academy of Management.