The accepted definition of the term state capacity places emphasis on preserving the potential for the effective implementation of public policy in the face of changing external and internal conditions. There are three categories of development to which this understanding of the state's potential is applicable: (1) to the assuring of the basic functions of the state with regard to the political and economic systems of a given country; (2) to the assuring of the economic competitiveness of the country within the global economy and (3) to a given country's effective joining of regional integration processes. In the era of globalisation, a particularly essential aspect of the state's potential is the building of new potential for the country's economic development, including the forecasting of growth trends in a high-technology economy and the creation of conditions appropriate to the stimulation of the development processes in line with those trends. Also of great importance is the appropriate adjustment of the national model of capitalism to conditions of global competitiveness. Those states whose political system underwent a transformation found themselves in a particular situation; having discarded the economic institutions of socialism, they were forced to make radical changes to the economic model. This led to the adoption of institutions which mirrored those from outside without sufficiently adapting those institutions to local conditions and, more often than not, without proper concern for the cost of reform to the home economy. A further stumbling-block for these countries was that the very serious challenge of transformation coincided with a low level of state resources. An additional factor in the diminishing of state capacity was the state's withdrawal from a great many areas of social life as a result of the 'flight' from the model of the socialist state.
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