State Capacity, Social Fragmentation, and Public Goods Provision: A Cross‐National Comparative Analysis

ABSTRACT This study investigates why state capacity does not always translate into improved public goods provision. I argue that the effect of state capacity depends critically on state–society interactions, which are shaped by regime type and, more decisively, by social fragmentation. While existing research often assumes a uniformly positive impact of capacity, this study shows otherwise. In democracies, institutionalized responsiveness ensures that higher capacity consistently enhances provision, regardless of fragmentation. In authoritarian states, however, outcomes hinge on the degree of social fragmentation: where fragmentation is high, strong states provide more goods to mitigate conflict and maintain legitimacy; where society is cohesive, high capacity may instead be diverted to elite projects, exclusionary distribution, or control. Using panel data on 177 countries (1960–2015), I demonstrate that state capacity's effect is conditional, not absolute. These findings highlight how social fragmentation, interacting with political regime, fundamentally shapes the governance returns of state capacity.