This paper views seeking the optimal balance between state strengths and the scope of state functions for 'good governance' as the formation of a homogenization-heterogenization matrix of policy initiatives in different social settings. Homogenization refers to a global tendency for institutional changes and governance framework to change state capacity, while heterogenization refers to the local adaptation of these global transformations. The paper attempts to take educational decentralization as an example of policy initiatives to assess and analyse the significance of the two opposite poses in four East Asian newly industrialized economies (NIEs) (Hong Kong, Singapore, Korea, and Taiwan). The paper's position is that it may be useful to see these four NIEs as making up two clusters. It sees political democratic transitions in Korea and Taiwan as important local factors affecting the developments of educational decentralization in the two societies, while reforms in Hong Kong and Singapore seem to be more consequences of managerial and market values. However, the NIEs face the question of how to maintain sufficient 'stateness' in the decentralization process. To conclude, the paper considers that achieving the balance of 'stateness' is the key to success in state-building.[Copyright of Compare: A Journal of Comparative Education is the property of Routledge. Full article may be available at the publisher's website: http://dx.doi.org/10.1080/03057920903156888]
