‘What can states do?’ outlines the key role the state has to play in managing corruption, using ‘stick’ (disincentive), ‘carrot’ (incentive), ‘administrative and technical’, and ‘other’ methods. The most obvious ‘stick’ states can use to reduce corruption is the legal system with high prosecution and conviction rates and severe penalties. Carrot measures include improving employees’ working conditions and raising their salaries. Administrative methods include rotating officials from one office to another, better auditing, and norm setting. Increasing trust in society, gender balancing, and granting amnesties can also be useful methods. In combating corruption, what is needed is ‘smart anti-corruption’, meaning a combination of stick, carrot, and other approaches.