Security, Stability Measures Needed to Fix Fragile States

Challenges of managing the economy and overcoming fragility are universal issues

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Joint efforts by policymakers, leaders, and citizens important to transition success

What policies then, can a fragile state pursue in order to become a fully functioning nation that meets the aspirations of its people?

Clare Lockhart of the Institute of State Effectiveness in Washington, DC, and co-author of the book, Fixing Failed States, believes that a state can become a functioning one when it successfully performs 10 basic functions. In an interview with IMF Survey, she outlines some of these functions, and concludes that the problems of a fragile state are universal, and can affect any state at any time.

IMF Survey: What is the definition of a functioning versus a fragile state?

Lockhart: The definition of a functioning state is one that can perform 10 functions—this is based on interviews with citizens around the world. The first of these is the legitimate monopoly on the means of violence—and that is the one that was traditionally the definition of the state.

But what we are finding today is that real legitimacy comes not only from that function, but the way the state performs another set of functions: managing the public finances in a sound way; investment in human capital; managing infrastructure services; how the state approaches the rule of law; whether the rulers themselves are subject to the rule of law; and how they manage the assets of the state.

The state must now manage its natural capital—minerals, water, or forestry—as well as the intangible assets of the state, for example, the management of monopolies and licenses.

A functioning state is one where these mechanisms are working well, not only individually, but the way in which they interconnect. In contrast, a state is fragile when it is not serving its population well, or where one or more of these functions have really eroded or are not being performed properly.

IMF Survey: Given this definition of what constitutes a failed or fragile state, approximately how many such states exist today?

Lockhart: I think that really depends on how you measure and count them. There has been a proliferation of different indices, and depending on which one you use, there are somewhere between 30 and 60 such states in the world today. As we are discovering—and especially since the financial and fiscal crisis of...