they couId contribute to economic efficiency and that what mattered for the Bank was not 'governance' in any comprehensive sense, but only 'state-versus-market' issues in the realm of economic administration. He found that the Bank's policy advice in this context was not only much too general to be of use in formulating viable operational plans for reforms, but in any case the empirical evidence on the efficacy of the advice was not conclusive. Guhan argued that in the ultimate analysis, for its advice to be accepted by its client governments, the Bank had to rely far more on its leverage as a provider of funds than on its propaganda about or the inherent persuasiveness of the virtues of its advice. However, such aid- related conditionalitics were most often ineffective. Also the Bank did not seem to realise the contradiction involved in its advising the state to retreat in favour of the marker, while recognising that only a strong state could resist the vested interests having a stake in the status quo: such a strong state might be less willing to retreat. In Cuban's view, the Bank had been asking the less developed countries to adjust to adverse changes in their external environment while ignoring that some of these changes had in fact been the results of actions of the developed countries themselves or international institutions in which they were extremely powerful Alter discussing the philosophical underpinnings of a theory of state, Guhan identified six desiderata for the state from the perspective of good governance. These described a state that (a) enabled the full and free development of its citizens; (b) sought to promote cohesion amidst political and social pluralities: (c) exercised effective authority which is subject to responsibility; (d) maintained due separation and balance within the triad of basic institutions: the legislative, executive and judiciary; (e) governed an economy that was pluralistic, technically efficient, socially just and morally acceptable in terms of its relations with the market and in its handling of corruption and of interest and demand groups; and (ft sought to promote these various objectives in practical action through tan optimal contribution of the reform of institutional structures and the promotion of values and virtues required to sustain them.