ABSTRACT

In this chapter, we go beyond the ranking of states published annually by CIFP and examine the determinants and consequences of state fragility, using the Authority-Legitimacy-Capacity (ALC) framework, and the distinct measurable characteristics of statehood as described in Chapter 3. This chapter’s main objective is to identify the determinants of state fragility, building on the work by Carment et al. (2008a, b). A secondary and related objective is to validate our analytical framework in order to specify concrete policy interventions. We do so by comparing our state fragility index against other measures of failure or fragility. In addition to this introduction, the chapter has four sections. In the second section, we identify other indexes of fragility in order to set the stage for benchmarking our own index. After that, we review the existing literature on state fragility to identify the leading factors. In the fourth section, we conduct an empirical analysis of the determinants of state fragility using both cross-sectional and panel data over the period 1980-2006. Finally, we conclude with some policy recommendations derived from our findings. Our argument is that understanding the determinants of fragility and interpreting them properly matters in pragmatic terms. Whereas choosing the wrong policy interventions can be extremely costly and can exacerbate fragility or conflict situations, making the right decisions can allow countries to embark on sustainable growth paths and meaningful development. More specifically, identifying the root causes of fragility, not only conflict or failure as described in previous chapters, in a systematic way, allows policymakers to be proactive, not reactive. It can also facilitate the creation of better early warning systems and delivery of foreign aid. As we showed in Chapter 2, while several agencies such as the OECD DAC and the UK Department for International Development (DfID) have taken a leading role on the issue of state fragility and should be commended for producing policies for engaging in fragile states (OECD DAC 2007), deeper analysis is needed on the options and principles presented. In brief, in reviewing these policies and principles it is fair to ask how were they arrived at in the first place and whether they are supported by the empirical literature. Key questions include: how long should policy interventions in fragile states last and when should they start? On what basis should one engage and where? What are the sectors or projects that should be prioritized?