The article presents a survey of the arguments relating development and governance to the prospects of successful state formation. Political institutions that are accountable, good governance and economic development indeed enable central governments to let minorities share in the gains in wealth and security. The political allegiance of minorities thus acquired is likely to strengthen the process of state building. Conversely, poor governance implies that the state fails to satisfy collective needs and fails as an arbiter in civil conflict. If so, a central government has to rely more on the political and economic coercion of minorities and thus increases the probability of violent escalation of civil conflict.