Many measures of state power are defined in terms of the material capabilities of states, but ignore important differentials in the state's capacity to convert material resources into political power. This paper presents a theoretical rationale for a measure of government performance that takes into account differentials in a political system's susceptibility to external shocks from the global environment and its ability to respond to these through domestic policy adjustment. This approach differs from other empirical definitions of power in that it taps a government's strength with respect to its own society and to the international environment. The paper's main contribution is to describe and to operationalize a way of evaluating state power with respect to both the global environment and to society, based on the twin functions of penetration and extraction.
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