How can effective and legitimate governance be ensured where state institutions are weak? This is a key question for domestic and international politics. One answer to this question that has received considerable attention in political science, but also among development agencies and international organizations, is virtuous circles of governance. In such circles, effective and legitimate governance are thought to be mutually reinforcing. The idea is that more effective governance leads to more legitimacy and more legitimacy to more effectiveness in governance. In many parts of the world, however, state institutions are weak and citizens perceive governance as ineffective and governance actors lack legitimacy. This places a large question mark behind the idea of virtuous circles of governance. asks: How likely are virtuous circles of governance to evolve in areas of limited statehood? The central claim of this book is that virtuous circles of governance are possible in areas of limited statehood, but more likely to evolve for external and non-state actors than for the state. The state is often part of the governance problem rather than the solution. Based on a new theoretical model for the interplay between effective and legitimate governance, the study provides in-depth empirical evidence for its argument by drawing on innovative qualitative and quantitative data. The case studies of Sub-Saharan Africa, Nigeria, and Afghanistan underline the key argument by considering state, external, and non-state actors. The book offers conceptual innovations, new empirical evidence, and policy recommendations of how to ensure effective and legitimate governance in areas of limited statehood.