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Determinants of State Fragility and Implications for Aid Allocation: An Assessment Based on the Country Indicators for Foreign Policy Project

  • Carment, David
  • Prest, Stewart
  • Samy, Yiagadeesen

This paper is derived from our ongoing research on fragile states funded by the Canadian International Development Agency (CIDA) to help policymakers and analysts make decisions on where and how to allocate aid, especially in fragile state environments. In order for development assistance to have a measurable and positive impact on fragile states, it is necessary to understand both how and why they become fragile. First, we reconceptualize the meaning of state fragility with equal attention given to the authority, legitimacy and capacity of a state, collectively referred to as ALC. Measures of these ALC components corresponding to six different categories of state performance?economics, governance, security and crime, human development, demographics, and the environment?are collected for all countries for the period 1999-2005. Initial testing of our fragility index shows that fragility is driven by a number of factors, of which the level of development seems to be more important. We complement this analysis by examining state fragility using the ALC framework. Overall, the approach presented has the distinct advantage of identifying country-specific patterns of fragility while at the same time allowing for broad strategically relevant measures of comparative performance that can be of use to policymakers regarding allocation of aid at the sectoral and programming level. Notwithstanding the fact that aid may be allocated for political and strategic reasons, and that fragile states are under funded, we argue that aid that does flow to fragile states could be better targeted. Specifically, it could strengthen the underlying determinants of fragility by addressing fragile states? distinct and country-specific weaknesses in authority, legitimacy and capacity. Finally, we discuss policy implications of our analysis and directions for future research.

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Paper provided by World Institute for Development Economic Research (UNU-WIDER) in its series Working Paper Series with number RP2008/46.

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Length: 30 pages
Date of creation: 2008
Date of revision:
Handle: RePEc:unu:wpaper:rp2008-46
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  1. Easterly, William & Levine, Ross, 1997. "Africa's Growth Tragedy: Policies and Ethnic Divisions," The Quarterly Journal of Economics, MIT Press, vol. 112(4), pages 1203-50, November.
  2. Henrik Hansen & Finn Tarp, 2000. "Aid effectiveness disputed," Journal of International Development, John Wiley & Sons, Ltd., vol. 12(3), pages 375-398.
  3. Paul Collier & Anke Hoeffler, 2004. "Greed and grievance in civil war," Oxford Economic Papers, Oxford University Press, vol. 56(4), pages 563-595, October.
  4. Michael Clemens & Steven Radelet & Rikhil Bhavnani, 2004. "Counting Chickens When They Hatch: The Short-term Effect of Aid on Growth," Working Papers 44, Center for Global Development.
  5. Burnside, Craig & Dollar, David, 1997. "Aid, policies, and growth," Policy Research Working Paper Series 1777, The World Bank.
  6. Boone, Peter, 1996. "Politics and the effectiveness of foreign aid," European Economic Review, Elsevier, vol. 40(2), pages 289-329, February.
  7. Collier, Paul & Dollar, David, 2002. "Aid allocation and poverty reduction," European Economic Review, Elsevier, vol. 46(8), pages 1475-1500, September.
  8. Torres, Magui Moreno & Anderson, Michael, 2004. "Fragile States: Defining Difficult Environments For Poverty Reduction," PRDE Working Papers 12822, Department for International Development (DFID) (UK).
  9. Mosley, Paul, 1980. "Aid, Savings and Growth Revisited," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 42(2), pages 79-95, May.
  10. William Easterly, 2003. "Can Foreign Aid Buy Growth?," Journal of Economic Perspectives, American Economic Association, vol. 17(3), pages 23-48, Summer.
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