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Key Text Determinants of State Fragility and Implications for Aid Allocation

Author: David Carment, Stewart Prest, Yiagadeesen Samy
Date: 2008
Size: 30 pages (220 KB)

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Summary

How can aid be deployed most effectively in fragile states? This paper, published by the World Institute for Development Economics Research, argues that such aid should address the underlying determinants of fragility. In particular, donors should direct the flow of aid to context-specific weak points of fragile states in terms of authority, legitimacy and capacity (ALC). Measuring ALC components, against six categories of government performance - economics, governance, security and crime, human development, demographics and the environment - indicated that state fragility was specific to each country.

The Country Indicators for Fragility Project (CIFP), which measures these six indicators, is a second-generation methodology for analysing fragile states. Country assessments consist of statistical information combined with dynamic event and stakeholder evaluations. Indicators for each country are then broken down into manageable, measurable parts. North Korea provides an interesting example of how a CIFP ranking can yield a nuanced result. Although ranked 52nd in the world, a measure of the ALC components shows that mediocre scores for authority and capacity are brought down by a very weak ranking for legitimacy. As a pariah nation with few allies, North Korea is vulnerable to outside shocks, and thus brittle in a different way than other developing nations.

The results of this fragility assessment, performed for numerous countries in a combined ALC/CIPF framework, include the following:

Current theories of aid effectiveness point to the importance of good governance in recipient nations. As a result, many fragile states have seen high volatility in aid flows and are under-funded overall.
Analysing the flow of aid to states with different ALC scores yields intriguing results. For example, the amount of aid that went to states lacking in authority trailed aid to states lacking in legitimacy during the period 1969-1988. The figures reached parity in the early 1990s, but since then the pattern has reversed, with states lacking in authority climbing higher.
The principle of aid selectivity, by which countries with good policies are rewarded, tends to ignore factors such as history of previous conflict, level of democratisation and regime type. All these may be salient in the case of fragile states.
Lack of capacity is an important consideration in disbursing aid to fragile states. However, authority and legitimacy may be more pressing questions - such that aid focused on governance or corruption may be needed more than poverty alleviation programmes.
CIFP assessments can aid policy-making at the strategic and operational levels. With a state's strengths and weaknesses in plain view, the international community is in a position to evaluate the best points of entry for aid and then measure effectiveness.

The following conclusions and recommendations apply to the proposed methodology, and to the allocation of aid in fragile state situations more generally:

Despite the availability of a massive literature on development work and aid effectiveness, there is a need for much more work on these topics in the fragile state context.
Fragility results from a variety of both economic and political factors, beyond the mere fact of recent conflict. Testing of the fragility index reveals that level of development may be the single most important factor.
The ALC framework should serve as a touchstone for further analysis concerning fragile states and aid allocation.

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Source: Carment, D., Prest, S., and Samy, Y., 2008, 'Determinants of State Fragility and Implications for Aid Allocation', Research Paper no. 46, UNU-WIDER, Helsinki
Author: David Carment , dcarment[at]ccs.carleton.ca
Organisation: World Institute for Development Economics Research of the United Nations University, http://www.wider.unu.edu