Donor nations may advise and counsel, but the creation of a liberal nation state falls to its own people. They must create laws, exercise their liberties, provide freedom of belief and expression, and protect individual property rights. No nation becomes or remains free unless its people build, use, and defend these institutions, and protect them with understanding, vigilance, and effort. The Political Economy of Nation Building reviews the effects of political structures on the evolution and stability of liberalism in developing nations and considers the outlook for their success.Discussing the origins and applications of the modern liberal state from an explicitly Anglo- and Euro-centric view, Mack Ott addresses the origins of the rule of law and innovations that led to the rise of a market economy, separation of faith and governance, and the autonomy of finance - key components of the liberal state. He then addresses the emergence of sustained economic growth, a bridge between the liberal infrastructure and its application during the construction of a nation.Ott examines budget policy and laws, and accurate and timely economic and financial statistical reporting that assure donors that the recipient government is operating within the constraints of law. He addresses the beneficial effects of privatization of state-owned industry, examines the costs and benefits of nurturing non-governmental associations, and concludes with a review of transparent fiscal and monetary policies and the importance of non-interference in financial markets by the state.