The ‘political settlement’ concept has been around fora long time, but like any smart virus it has morphedalong the way to suit its various hosts. It appeared firstand has its widest currency in the international relationsand peace literature, where it describes a negotiatedsettlement to conflict which spells out how power isto be distributed and managed in the post-conflictstate.1 Its next relevant incarnation, for the purposesof this paper, was in the mid-1990s in the writing ofMushtaq Khan, who used the concept to challenge theexplanations offered by new institutional economics forstate failure in developing countries (Khan 1995). Don’tjust focus on the institutions, he argues, but look to thepolitical settlement.