Timor-Leste's celebrated journey to statehood violently unravelled in 2006, leaving the
country's post-independence dream in tatters. Why has the young state has stumbled so badly
given the overwhelming national consensus for independence and firm international support
for reconstruction? Many scholars have attempted to solve this puzzle, but none have
succeeding in providing a comprehensive analysis. This paper seeks to build on the existing
scholarship on state-building by introducing the city as the key site of 'internal integration'
central to the fortunes of state formation under conditions of globalisation and crisis.
Exploring the processes of state-building that took place in Timor-Leste under Portuguese
and Indonesian occupation and the role of the international community post-1999, the paper
concludes that the donor-scripted state-building model for Timor-Leste was inappropriate,
ultimately precipitating urban crisis in Dili and the city's failure to drive state-making and
'internal integration' in the country at large.