Data is an important part of state functionality. If states want to be capable they need to know where people are, how many people there are, etc. in order to deliver basic services. They need to measure functionality and ends rather than forms.
In this video, Matt Andrews, uses child registration to illustrate what a functional indicator means and how it has the potential to build the capacity to deliver services to its people. You can watch this video below or on YouTube.
If you are interested in learning more, read Getting real about governance and governance indicators and measuring success: means or ends?