Praise and criticism for “Fixing Failed States” (Ghani and Lockhart)

I just finished Ashraf Ghani and Clare Lockhart’s “Fixing Failed States” – only about two years after it came out. So I’m a little behind on my reading list. Are the ideas out of date? Probably not. So would an interesting summary/critique be totally useless? Hopefully not. Let’s proceed.

First, the praise: FFS puts the issue of state effectiveness center stage. The book is concerned with about 50 countries, home to nearly 2 billion people, suffering from a “sovereignty gap” — that is, a gap between the de jure sovereignty granted by the international system, and the state’s de facto inability to provide services within its borders. This gap leads to ongoing conflicts, terrorism, drug trafficking, persistent poverty, etc. (Admittedly, these ~50 states might not all deserve the label “failed”; Clare Lockhart mentioned in a talk that she would have preferred to title the book “Building Effective States” but it lacked the same panache.)

The issue of state building/state effectiveness has gotten increasing attention in international development over the past few decades, as donors have realized that interventions of all kinds (health, education, infrastructure, etc) struggle to have impact without an effective state. But efforts to promote “good governance” and “institutions” have remained fragmentary add-ons to these other development objectives. More inspirational concepts like democracy and freedom have also stolen the spotlight. “State effectiveness” just sounds so boring in comparison.

One of the book’s explicit goals is to put the issue on the agenda, inspiring various stakeholders to appreciate the importance of the state. The analysis is up to the task, though I don’t know much about how well the book has penetrated the intended audiences. The first half of the book outlines success stories of state turnarounds (Europe since WWII, Singapore under Lee Kuan Yew, the US southern states, Ireland) and continued failures (Lebanon, Sudan, Kosovo, Afghanistan). The book also describes today’s unique international context: the networked world, the rise of the knowledge economy and private international players, and the failures of the aid system. The last point is especially important, as FFS describes how the familiar issue of donor fragmentation not only undermines the impact of specific interventions but also undercuts state effectiveness across the board.

My praise is similar to the praise that I’ve heard William Easterly give for Jeffrey Sachs:  Easterly acknowledges that Sachs has managed to put the issue of poverty at the top of the agenda. He has helped to re-orient development economics from a focus on growth to a focus on poverty reduction. But Sachs’ strategy of big top-down efforts fundamentally misses how change happens. And that same critique applies to Ghani and Lockhart. Speaking of which..

Next, the critique: The recommendations leave much to be desired. The second half of FFS charts a course that seems to ignore the same political analysis that was so well articulated in the first half.

The authors give a brief history of the concept of the state (cue Weber et al.) before diving into their own list of ten functions a 21st century state must fulfill. They are: Rule of law; Monopoly on violence; Administrative control; Sound management of public finances; Investments in human capital; Creation of citizenship rights through social policy; Provision of infrastructure services; Formation of a market; Management of public assets; Effective public borrowing.

While Ghani/Lockhart don’t claim the list is definitive, they do claim that it is meant to spark discussion that will eventually yield a consensus. Their hope for consensus is where the argument starts to slip. This consensus is meant to provide the framework for two things. First, a “sovereignty index” that would show each country’s performance. This is analytically difficult — some effective states fail on criteria that others may find essential, e.g. the US on “effective public borrowing” — but not impossible. However, it’s not entirely clear that a consensus could be built, as states may be reluctant to label their allies “failed”. Furthermore, it’s not clear that a consensus should be built: human history is marked with experimentation in political forms, and this diversity and innovation is beneficial in the long run.

The bigger problem comes from the second purpose of the consensus: the creation of (context-specific) “sovereignty strategies” for each state suffering from a sovereignty gap. FFS defines a sovereignty strategy as: “the alignment of internal and external stakeholders to the goals of a sovereign state through the joint formulation, calibration of, and adherence to the rules of the game.” Thus the consensus must go beyond simple agreement on concepts, and must also include alignment of activities. Ghani/Lockhart have a few mechanisms and principles for achieving this: root-cause/constraint-relaxing analysis; a “double compact” between the national government and citizens on the one hand, and between the national government and the international community on the other; clear decisions on sequencing; strong focus on setting an implementable strategy. But none are sufficient for overcoming the political hurdle. How do you actually convince disparate aid agencies and other foreign policy actors to work together?

The first half of FFS contained astute political analysis on the incentives facing donors and other international actors. The second half ignored this analysis and assumed they can all be brought on board. While greater discussion on the importance of states might bring some consensus on their appropriate role, it won’t solve the political economy problem. Coordination on single issues is complex enough; getting everyone to agree on a cross-sectoral strategy for state-building (not to mention crafting an appropriate one) will be next to impossible.

Then, the tie-ins: There’s some interesting overlap with other thinkers worth noting. For example, the application of root-cause analysis to identify constraints to state effectiveness sounds a lot like the growth diagnostics of Dani Rodrik and others (Duncan Green discussed this in his own, much more timely, review of FFS). But as Lant Pritchett and Michael Woolcock point out in their brilliantly snarky “Solutions when the Solution is the Problem“, it’s not entirely clear what questions would go at the nodes of the decision tree. This difficulty calls into question the analytical project of devising a “sovereignty strategy”, which further compounds the political complexity.

Another interesting tie-in is the similarity between FFS’s “sovereignty gap” and Thomas Barnett’s “non-integrated gap” — which Barnett defines in terms of connectivity to the global economy. Specifically, those countries suffering from a sovereignty gap are the same ones that are unable to manage the rules for connecting to the global economy.

Finally, the take-aways: Operating without consensus. FFS’s main failing is to imagine that consensus can be built around a “sovereignty strategy” for a given country. The book does not explicitly address how to operate in the absence of such consensus. However, it offers applicable lessons anyway, namely the “national programs” that it proposes as the key modality for implementing sovereignty strategies. Examples include Afghanistan’s National Solidarity Program, which gives block grants to villages for participatory development projects (the authors were directly involved in this program), and United States’ GI Bill of Rights, which promoted human capital development by providing access to higher education. Ghani/Lockhart contrast such programs with other modalities: large-scale humanitarian projects, quick-impact projects, developmental projects, and sector approaches.

The examples make a compelling case for the potential of national programs to address specific development problems while simultaneously building state capacity. Such programs seem to exist just fine in the absence of comprehensive sovereignty strategies. Rather trying to establish such a strategy, energy may be better spent pursuing national programs, in isolation if necessary.

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