Fragile states

Political settlements, state legitimacy and dilemmas of external engagement

Page contents

• Political settlements
• State legitimacy
• Tax and state-building
• Critiques and dilemmas of externally-assisted state-building
• 'Do no harm' and state-building
• Working within local contexts and institutions

Political settlements

The nature and evolution of the ‘political settlement’ is increasingly viewed as a key underlying determinant of state fragility or resilience. A political settlement can be understood as: ‘the forging of a common understanding, usually among elites, that their interests or beliefs are served by a particular way of organising political power’ (Whaites, 2008). These often unarticulated, negotiated agreements usually extend beyond elites to bind together state and society, provide legitimacy for rulers, and can prevent violent conflict from occurring. Recent research has emphasised that the inclusiveness of the political settlement affects the potential for political stability.

Donors typically support political settlements through formal power-sharing mechanisms, elections, parliamentary strengthening, and constitution-building processes. But many stress that although political settlements may adopt the structures of the ‘modern’ state and be underpinned by a constitution, in practice the power relations behind the settlement may be very different.

Whaites A., 2008, 'States in Development: Understanding State-building', Department for International Development, London
Why do some states manage state-building better than others? How can development actors support positive state-building? This paper from the UK Department for International Development’s Governance and Social Development Group locates the political settlement within a proposed state-building model.  It argues that improved understanding of state-building can increase the impact of aid, while lack of understanding reduces its benefits. Two conceptual frameworks, or models, for statebuilding dynamics are evident: The first is a model of how state-building can work to produce capable, accountable and responsive states - namely responsive statebuilding. The second is a model of unresponsive state-building - a set of dynamics likely to lead to states affected by problems such as endemic rent-seeking or political repression.  The extent to which the political settlement is inclusive or exclusionary is a critical factor in determining whether state-building is responsive or unresponsive.
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Lindemann, S, 2008, ‘Do Inclusive Elite Bargains Matter? A Research Framework for Understanding the Causes of Civil War in Sub-Saharan Africa’, Crisis States Research Centre, London School of Economics (LSE), London
Sub-Saharan Africa is the world’s most conflict-intensive region. But why have some African states experienced civil war, while others have managed to maintain political stability? This discussion paper from the Crisis States Research Centre argues that the ability of post-colonial states in Sub-Saharan Africa to maintain political stability depends on the ability of the ruling political parties to overcome the historical legacy of social fragmentation. Inclusive elite bargains’ involve a ruling party that integrates a broad coalition of key elites by defining inclusive access to state structures (jobs) and state resources (rents). ‘Exclusionary elite bargains’ involve a narrow coalition of elites who define exclusionary access to state structures (jobs) and state resources (rents). ‘Inclusive elite bargains’ permit the maintenance of political stability, whereas ‘exclusionary elite bargains’ give rise to trajectories of civil war.
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Samuels, K., 2008 ‘Postwar Constitution Building: Opportunities and Challenges’, Chapter 8 in (eds.) R. Paris and T.Sisk, The Dilemmas of State-building: Confronting the Contradictions of Postwar Peace Operations, Routledge
What role does constitution-building play in postwar state-building? This research from International Idea looks at the political dynamics, choices and implementation challenges that confront constitution-building. It suggests that the process can provide a key opportunity to shape the institutional and governance framework, and opens the door to societal dialogue. However, ensuring that such a process supports the establishment of a peaceful and legitimate state is a challenge that requires careful balancing of the compromises needed to maintain the peace and involvement of the people in deciding the future of their country.
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Sisk, T., 2008, ‘Pathways of the Political: Electoral Processes after Civil War’, Discussion draft for Research Partnership on Postwar State-Building, Chapter 9 in (eds.) R. Paris and T.Sisk, The Dilemmas of State-building: Confronting the Contradictions of Postwar Peace Operations, Routledge
How do election processes contribute to stability after civil war? This research from the University of Denver compares state-building in Cambodia, South Africa, Afghanistan and Liberia. It argues that electoral processes are necessary in moving beyond violence. However, the way elections are carried out is critical. Sequencing, design and the extent of international oversight are the key variables that determine the extent to which electoral processes contribute to capable, responsive states or to captured, fragmented and weak states.
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Mehler, A., 2008, ‘Not Always in the People’s Interest: Power-sharing Arrangements in African Peace Agreements’, GIGA German Institute of Global and Area Studies, Hamburg
Peace agreements that place a heavy emphasis on power-sharing often preclude the people’s interests and can impede sustainable peace. This paper, published by the German Institute of Global and Area Studies, analyses the impact of power-sharing arrangements in recent African peace agreements. Many peace agreement failures are caused in part by the international community’s support of power-sharing that benefits armed rebel movements to the detriment of long-term conflict solutions.
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State legitimacy

Fragile states often experience crises of legitimacy in the sense that citizens may not accept the state’s basic right to rule. State legitimacy and the development of trust between state and society have long been considered a critical dimension of state-building processes in the political science literature. But many argue that state legitimacy has often been poorly understood or overlooked by external actors aiming to support these processes.

The OECD-DAC identifies an opportunity for state-building to create a ‘virtuous cycle of legitimacy’ in the sense that: i) legitimacy is necessary for the process of state-building because the ability of the state to manage state-society expectations depends on its legitimacy in the eyes of its population, and ii) state-building and the delivery of certain functions which benefit people strengthens citizen confidence and trust in the state and in turn reinforces its legitimacy. But many argue there are tremendous limits on the capacity of external actors to influence state legitimacy, and very little empirical evidence of how donors can support state legitimisation. 

The literature denotes various types of legitimacy (including grounded, embedded, charismatic, international, self-legitimacy, performance) and sources of legitimacy (including performance against certain functions, representation, accountability, citizenship, rights). Understanding what state legitimacy means in different contexts is a critical concern for external actors. Some argue a state-building process is most likely to generate legitimacy for the state when it is inclusive of all major political forces and open to the participation of the public.

Kaplan, S., 2008 ‘Fragile States, Fractured Societies', chapter 3 in Fixing Fragile States: A New Paradigm for Development, Praeger Security International, London
What has caused the difficulties experienced by fragile states? This book chapter from Praeger Security International explores the roots of state fragility and the role of foreign aid in sustaining past dysfunction. Two structural problems – political identity fragmentation (often based on arbitrarily drawn state borders) and weak national institutions – reinforce each other. They undermine state legitimacy, interpersonal trust and the formation of robust governance systems and encourage neopatrimonialism. Fragile states’ formal institutions need to be reconnected with the local societies upon which they have been imposed. The key to fixing states is to legitimise the state by deeply enmeshing it within society. 
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Papagianni, K., 2008, ‘Participation and State Legitimation’, Chapter 3 in (eds.) C T Call and V Wyeth, Building States to Build Peace, Lynne Reinner, Colorado
How do postwar countries gain legitimacy in the eyes of political elites and the public? This study from the Harriman Institute argues that state-building should be approached as a process (not an event) to legitimate new state institutions. It should also be seen as a process that meets the criteria of inclusion and participation. Although inclusive and participatory political processes do not necessarily lead to legitimate outcomes, when managed well, they have a significant chance of bolstering the legitimacy of postwar states.
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Lake, D., 2007, ‘Building Legitimate States After Civil Wars: Order, Authority, and Institutions’, Unpublished Paper
How can statebuilding be improved? This paper from the University of California argues that successful statebuilding may be possible if the international community adopts a new framework. It presents a relational concept, using Somalia and Somaliland as case studies, and identifies alternative ways to rebuild state legitimacy.
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A key question is not only how donors can support the development of state-legitimacy, but how they can avoid undermining it. Particularly in reference to Afghanistan, some have argued that intervening from the outside to build a state carries with it the risk of undermining the legitimacy and sovereignty of the very state donors are trying to secure and build. Specifically, donor interference in the management of budgets and resources is likely to undermine legitimacy rather than build state capacity (see Ghani and Lockhart, 2005 above).

ID21, 2007, 'Retaining Legitimacy in Fragile States', ID21 Insights, Volume 66, Institute of Development Studies, Brighton
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Tax and state building

Many argue taxation is a critical aspect of state-building. The ability to raise revenue and manage public expenditure are core state functions which underpin the formation of the social contract. Revenue raised through taxation, rather than through aid, arguably better supports state accountability to its citizens and, in turn, state legitimacy. Taxation and public expenditure are also important redistributive mechanisms which can allow the state to correct horizontal and vertical inequalities over time. Nevertheless, some argue that donors have paid insufficient attention to supporting taxation in fragile states, partly because reforming tax administration is a highly complex and ultimately political undertaking.

Fjeldstad, O-H., and Moore, M., 2009, ‘Taxation and State Building: Poor Countries in a Globalised World’, CMI, Bergen
How far has the recent global wave of tax reform contributed to state-building in poorer countries? The conclusion of this paper from the Chr. Michelsen Institute mirrors other general globalisation arguments: there are good things to report, but worrying problems in the poorest and most dependent countries. The reform agenda is least appropriate to those countries most in need of the state-building to which the taxation process has contributed in other places and times. Governments in poorer countries have little choice but to go along with a reform agenda reflecting the priorities and needs of the more powerful actors in the international system. The contemporary tax reform agenda does not address the more urgent problems that the poorest countries face.
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Moore, M., 2004, ‘Revenues, State Formation and the Quality of Governance in Developing Countries’, International Political Science Review, vol. 25, no. 3.
Sources of state revenue have a major impact on patterns of state formation. This article, published in International Political Science Review, investigates how far the quality of governance in developing countries might improve if states were more dependent for their financial resources on domestic taxpayers. It argues that we can best understand patterns of state formation in the South by exploring the different context in which they were formed in comparison with that of earlier western European states.
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The literature indicates rebuilding and supporting state capacity is critical but not sufficient. Institution building needs to be closely linked with reforms of both revenue and expenditure polices. Ultimately state revenues should be able to sustain state expenditure policies without donor support. The challenge, however, is that the tax base in fragile environments is often too small (or overly reliant on natural resources) to sustain these expenditure demands. Research suggests careful thought needs to be given to how, ultimately, different aspects of a state’s tax and expenditure polices will be drawn together.

Gupta, S., 2005, ‘Rebuilding Fiscal Institutions in Post Conflict Countries’, Occasional Paper 247, International Monetary Fund, Washington
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Critiques and dilemmas of externally-assisted state building

International actors confront a range of dilemmas in engaging with state-building processes. Many see inherent tensions and contradictions between external assistance and the need to develop local ownership, between universal values and local expectations, and between short-term imperatives (such as elite bargains) and the development of longer-term state institutions. At the practical level, donors need to reconcile the need for long-term but not open-ended engagement, ensure policy coherence and divisions of labour within and between donor governments and agencies, and be mindful that aid instruments do not undermine state legitimacy.

Paris, R., and Sisk, T., 2007, ‘Managing Contradictions: The Inherent Dilemmas of Postwar Statebuilding’, Research Partnership on post-war state-building, International Peace Institute, New York
How can legitimate, effective institutions best be built to create peaceful states? This research from the Research Partnership on Postwar Statebuilding suggests that state-building has become a central focus of multidimensional peace operations in war-torn societies. But efforts to construct legitimate, effective state institutions are full of tensions and contradictions. Understanding these tensions and contradictions is essential for anticipating many of the practical problems that international agencies face in the course of state-building operations and for devising more nuanced and effective state-building strategies for future missions.
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Ottaway, M., 2002, ‘Rebuilding State Institutions in Collapsed States’, Development and Change, vol 33, no. 5
Is institution building the best way of reconstructing collapsed states? What can be done to avert failure in reconstruction efforts? This paper by the Democracy and Rule of Law Project, Carnegie Endowment for International Peace critiques the model of state reconstruction currently adopted by the international community. The article compares exogenous state-building (using the examples of Mozambique, Cambodia and Bosnia) with endogenous efforts (for example, Uganda, Ethiopia and Eritrea) and finds that exogenous, donor driven attempts are more expensive and tend to focus on building institutions rather than establishing power. She criticises donor state-building techniques as focusing more on imported ‘best practice’ than local solutions, as being overwhelming for the country in question and for not being resourced adequately enough to see the donors’ goals realised.
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Englebert, P., and Tull, D., 2008, ‘Postconflict Reconstruction in Africa: Flawed Ideas about Failed States’, International Security, Volume 32, Number 4, pp. 106-139
Why have international efforts to reconstruct public institutions in failed and collapsed states in Africa enjoyed such little success, particularly in establishing self-sustaining state institutions? This article from International Security examines the obstacles to successful reconstruction in the failed states of sub-Saharan Africa. It argues that three flawed assumptions underpin international efforts to rebuild failed states in Africa and recommends a greater reliance on indigenous reconstruction efforts.
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Lun, M., 2009, ‘Reconnecting Joined-up Approaches: Nation-building Through State-Building', Overseas Development Institute, London
How can sustainable peace be built in fragile states? This study from the Overseas Development Institute shows that while donors have largely focused on state-building, stability requires a deeper process of nation-building. External actors are restricted to using state-building as a means of enabling nation-building. They can assist in the establishment of rule of law, create a fertile investment climate for economic regeneration and agree an exit strategy. However, only the partner country can take the active lead role in nation-building.
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'Do no harm' and state-building

A 'do no harm' approach to state-building encourages external actors to mitigate the potential for aid to result in unintended harmful outcomes. Underlying this principle is the need for interventions to be based on sound contextual analysis to better facilitate external alignment behind endogenous processes. Donors are increasingly thinking about what a 'do no harm' approach to state-building means in any given context, so as to avoid some of the well-documented pitfalls of engaging in these complex and highly political processes. 

Nixon, H., 2007, 'Aiding the State? International Assistance and the Statebuilding Paradox in Afghanistan', AREU Briefing Paper, Afghanistan Research and Evaluation Unit, Afghanistan
How can a sustainable, legitimate and effective state be established in Afghanistan? As it moves from a transitional framework to a longer-term development framework, insurgency, opium and popular discontent threaten to undermine progress and further destabilise the country. This paper from the Afghanistan Research and Evaluation Unit (AREU) argues that while these threats require short-term action, sustainable solutions depend on improved governance, which in turn requires realistic state-building goals. Aid dependence, donor-driven assistance, limited state control over resources and budget assistance all present difficulties for state-building in Afghanistan.
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Working within local contexts and institutions

Understanding informal institutions and forms of order and authority that exist within and beyond the nation state is critical for understanding the feasibility of state-building interventions. Many studies have demonstrated how local institutions and traditional authorities are resilient, can endure state failure or collapse, and determine the everyday realities of poor people, particularly in remote or peripheral areas beyond the state’s reach. Some call for state-building interventions to better account for and tap into the potential for positive social change through these institutions on the basis they often carry legitimacy with the population, and that where formal state institutions do not match well with them, they will not endure. Recently there has been renewed attention on the ‘mediated state’ model, in which a central government with limited power and capacity relies on a diverse range of local and informal authorities to execute core functions of government and mediate relations between local communities and the state.

But others caution that local institutions should not be idealised. There are considerable challenges in addressing fragility when dominant social structures and local institutions may perpetrate violence, vulnerability, or predation. Some studies have identified a risk that state-building interventions can perpetuate weak, unstable or criminal institutions.

Boege, V., Brown, A., Clements, K., and Nolan, A., 2008, ‘On Hybrid Political Orders and Emerging States: State Formation in the Context of ‘Fragility’’, Berghoff Research Centre for Constructive Conflict Management, Berlin
This paper from the Berghof Research Centre argues that current approaches to state-building rest on a narrow understanding of the sources of political order, focusing too heavily on the technical and bureaucratic functions of the state. It proposes instead that emerging states be viewed not as fragile entities lacking capabilities but as hybrid political orders whose sources of legitimacy are often more socially and culturally rooted. The reality is that state institutions co-exist with and depend on the family, religious, economic and cultural institutions. While the state, in the final analysis, has a coercive capacity to determine outcomes which other institutions lack, this does not mean that state institutions are the primary determinant of integration, security, welfare or legitimacy. These factors are much more critically determined by other institutions within the society.
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Menkhaus, K., 2006, ‘Governance without Government in Somalia: Spoilers, State Building, and the Politics of Coping’, International Security, 2006/7
Why has statebuilding in Somalia failed so often? This research from Davidson College suggests that the problem lies in the type of state that both external and local actors have so far sought to construct. Somalia needs to develop a mediated state in which a central government with limited power and capacity relies on a range of local authorities to execute core functions of government and mediate between local communities and the state.
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Cammack, D., 2007, 'The Logic of African Neopatrimonialism: What Role for Donors?', Development Policy Review, Vol. 25, Issue 5, pp. 599-614
When sub-Saharan African government institutions do not function as expected by international aid agencies, they are often labelled dysfunctional. This Development Policy Review article explains the ‘logic’ behind neopatrimonial practices. Donors must begin to act politically – to confront directly the political logic that undermines economic development and democratic consolidation.
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McGovern, M., 2008, ‘Liberia: The Risks of Re-building a Shadow State’ Chapter 14 in (eds.) C T Call and V Wyeth, Building States to Build Peace, Lynne Reinner, Colorado
What lessons can the international community draw from statebuilding efforts in Liberia? This chapter from the book 'Building States to Build Peace' reviews the international community's experience in Liberia during its post-conflict transitional period and finds that deeply intrusive forms of intervention often risk long-term sustainability for medium-term success. It argues that unless reforms and reconstruction are rooted in consultation and a sense of local ownership they are likely to collapse as soon as donor interest and resources shift elsewhere.
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Further resources on working with non-state justice institutions are available on the GSDRC’s justice guide.

The Overseas Development Institute (ODI) is leading a consortium on Africa Power and Politics that is assessing how donors may work “with” the grain rather than against it in different contexts in Africa.

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