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The Economics of Failed, Failing, and Fragile States: Productive Structure as the Missing Link

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  • Erik S. Reinert
  • Rainer Kattel

Abstract

The starting point of this paper is the proposition that there is a strong relationship between a particular type of national economic production structure and the propensity of a nation-state to fail. The failed states have common economic factors that distinguish them from, e.g. Finland, Canada or Singapore. The assertion is that any policy aiming at preventing nation-states from failing and/or alleviating poverty, should . in order to avoid treating mere symptoms rather than causes . include an analysis of how to bring the productive structures of failing states closer to the structure of those states that work satisfactorily and democratically. Typically failing and failed states have a very low percentage of GDP produced in the manufacturing (increasing returns) sector. The paper will provide extensive statistical data from 1950-2003 documenting the shift in national economic structure as a necessary starting point for economic growth.

Suggested Citation

  • Erik S. Reinert & Rainer Kattel, 2009. "The Economics of Failed, Failing, and Fragile States: Productive Structure as the Missing Link," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics 18, TUT Ragnar Nurkse Department of Innovation and Governance.
    • Handle: RePEc:tth:wpaper:18
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    Cited by:

    1. Stel, Nora, 2012. "Entrepreneurship and innovation in a hybrid political order: The case of Lebanon," MERIT Working Papers 2012-078, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    2. Reinert, Erik S., 2012. "Neo-classical economics: A trail of economic destruction since the 1970s," MPRA Paper 47910, University Library of Munich, Germany.
    3. Léonce Ndikumana, 2013. "Overcoming Low Political Equilibrium in Africa: Institutional Changes for Inclusive Development," Working Papers wp331, Political Economy Research Institute, University of Massachusetts at Amherst.
    4. Erik S. Reinert, 2009. "The Terrible Simplifers: Common Origins of Financial Crises and Persistent Poverty in Economic Theory and the new ‘1848 Moment’," Working Papers 88, United Nations, Department of Economics and Social Affairs.
    5. Nora Stel, 2012. "Business by Generator The impact of fragility and hybridity on Lebanese entrepreneurship – A Case-Study of the Electricity Sector," Working Papers 2012/52, Maastricht School of Management.

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