Fixing Failed States: A Framework for Rebuilding a Fractured World Hardcover – May 16 2008
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From Publishers Weekly
Ghani and Lockhart, both former U.N. advisers to Afghanistan, spotlight the critical problem of failed states: countries where governments have all but collapsed, basic services go unprovided and terrorism and criminality reign unchecked—or even abetted—by a corrupt and predatory state. The authors do a fine job in emphasizing the centrality of a strong, accountable state in addressing poverty and underdevelopment. Unfortunately, their analysis suffers from its heavy reliance on management theory. Abstractions (such as the power of networks, flows of information and capital, webs of value creation) and business-school truisms (underlying a sound management system is an effective supply-chain management) litter their turgid discussion. Fixated on New Economy conceits, they say little about the crucial task of quelling violence and lawlessness; instead they dwell on globalization-oriented development strategies drawn from Ireland, Singapore, Oregon and other regions that are not failed states. (Fatuously, they even liken Sudan's travails to those of troubled conglomerate Tyco International.) The authors do offer a persuasive critique of the ill-conceived, incoherent aid complex run by the U.N. and other agencies, which, they argue, undermines and supersedes weak states instead of stabilizing them. Aid officials could learn from these insights, but they don't amount to a comprehensive fix-it. (May)
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"Ashraf Ghani is a practitioner turned theoretician. Drawing on his background at the World Bank and as the first post-Taliban finance minister of Afghanistan, he together with Clare Lockhart develops a comprehensive framework for understanding the problem of state-building. He argues persuasively that this will be the central challenge underpinning world order in our globalized age, and offers practical solutions for meeting it." --Francis Fukuyama, author of "State-Building: Governance and World Order in the 21st Century"
"This book is an important and timely alarm bell for the world's next crisis-and proves that no one knows more about how states function (and don't) than Ghani and Lockhart. We ignore their remedies at our peril." --Hernando de Soto, author of "The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else"
"Fixing Failed States provides a brilliantly crafted and extraordinarily valuable analysis of what makes states fail and what makes them succeed. Everyone concerned about improved governance-and particularly public officials at all levels in industrialized, emerging and developing nations alike-will benefit enormously from reading this and studying the great insights it provides." --Robert Hormats, Vice Chairman of Goldman Sachs (International)
"Ashraf Ghani and Clare Lockhart have filled a critical gap in our understanding of development, security and state-building. By combining an insightful analysis of weak and failed states with a clear-eyed proposal rooted in practical experience, the authors provide the international community with both a better understanding of the challenges we face and a solution." --Gayle Smith, Senior Fellow at the Center for American Progress and former Senior Director for African Affairs at the National Security Council
"Ashraf Ghani has held one of the toughest jobs on earth: the Finance Minister responsible for the reconstruction of Afghanistan. This experience grounds the analysis of failed states in a rare sense of realism. Here, he and Clare Lockhart cover the full array of problems that beset failed states, which range far beyond the conventional remit of development agencies." --Paul Collier, author of "The Bottom Billion"
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The thesis of the book hinges on the following: The difference between the successful states and the failed states is the "sovereignty gap". This gap is caused by the combined failures of failed governance and the misplaced aid complex resulting in the inability for these "failed states" to provide the basics of human sustenance.
The reason why this book is one of the most important books of 2008 is because of it's boldness and vision. It seeks to facilitate discussion and debate and Ghani-Lockhart genuinely desire to improve the human condition. They are forward-looking, seeking a third way between the forces of economic liberalization and economic nationalism: "The question is not 'state' or 'market' but the allocation of functions and tasks between them and the establishment of a framework within which each actor can operate effectively and cooperate over the long term" (p.152).
The authors pull few punches in describing problems linked to UN, World Bank, and bilateral donors' strategies, as well as domestic challenges. The solutions they offer can take decades to implement, and call for technical expertise, political will and institutional capacity that are often in short supply, especially in the early stages of a nation building exercise where predatory elites can play a major disruptive role. At times I felt as if I was reading a graduate level public administration text with a focus on fragile/failed states, which called for merging international and endogenous approaches in contextually-appropriate institutional development.
This extensive experience-based treatment of the subject is rare, and worth reading by anyone interested in better understanding and addressing many of the factors at play in the approximately 50 fragile/failed states that are home to about one billion of our fellow human beings. It is a good complement to works by Paul Collier, Matt Andrews and others addressing similar issues from other vantage points.
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They set out to develop understanding in five areas:
1. What State needs to do
2. How international community can help
3. How timelines and interdependencies should define sequencing
4. Why one size does NOT fit all
5. Why we must accept our shared responsibility and recognize the need for both proactive intervention, and coproduction (and sharing) of wealth.
I started with the endnotes and index, which is where I begin the most intelligent books in my reading program. I immediately detected the gaps that I address with the ten annotated links, but I was also immediately won over in seeing their appreciation for the report of the High Level Threat Panel of the UN, for Singapore under Lee Kwan Yew, for the balanced score card approach (some call for a triple bottom line), for Paul Collier's focus on the bottom billion, for Paul Hawkin's et al on natural capitalism.
Within the notes, I was shocked to learn that it has been reported that the United Nations deprived Afghanistan of the first two and a half years of all donor contribution, "by agreement" with US Government and World Bank. Since one of the author's has served as Finance Minister in Afghanistan, not only do I believe this--it must never happen again.
I find in this book one of the most original, refreshing, relevant, and therefore essential reviews on the matter of the State. Although the author's do not cite McIver, the original master on the origins and functions of the state, I consider them to be the new thought leaders and essential to any discussion of how to improve the inter-relationships among the eight tribes of governance: states, militaries, law enforcement authorities, academics, businesses, media, non-governmental organizations, and civil society including labor unions and religions. They are wrong-headed in thinking that "only sovereign states...will allow human progress to continue," and that "illegitimate networks will not be conquered except through hierarchical organizations," but in no way does this diminish the extreme importance of their deep thinking on the role of the state and the need to change both our concepts of sovereignty and our rules of the road for international organizations.
A useful early idea is that of the "double compact" between the country leadership and the international community on the one hand, and with the citizens on the other. It becomes obvious very quickly that corruption in government service is the single cancer that must be removed before states can achieve legitimacy and efficacy.
The authors have many gifted turns of phrase to include "harnessing our collective energies and readjusting to emerging patterns."
The authors recognize early on that legitimacy comes from below, from citizens, and must be earned.
I am not going to summarize each chapter, but I want to point readers toward the Army War College Strategy Conference, just concluded, on "Rebalancing the Instruments of National Power." I have posted both 29 pages of notes and an 8-page draft article for the Joint Forces Quarterly. Singapore got it early and is the world's first "smart nation." They understood early on that education powers economics, economics powers security, and so on.
Today, the authors document ably, stewardship of the environment, respect for social entrepreneurship, fair trade, and innovation in applying information technology to create wealth are all coming to the fore with honest leaders.
They identify five aspects of the networked world that are of note:
1. Framework for balancing activities of diverse stakeholders
2. Rule of law at a strategic level, with freedom of action at a tactical level (not quite true in the USA where the corrupt federal Congress establishes federal CEILINGS for regulatory action).
3. Massive investment--one reads repeatedly of the glut of money available for emerging markets (and I would add, the absence of both commercial intelligence and co-investment planning with charitable foundations)
4. World is evolving according to open systems (super point, see my keytone briefing to Gnomedex 2008, "Open Everything."
5. World is finally starting to evolve past rote memorization and toward recognizing patterns (the adaptive complex system and panarchy literature covers this well).
In the middle of the book they have six themes, each developed in a manner that makes this book quite valuable for any library, personal or organizational.
1. Conflict causes polarization of identities *and* ungovernability of aid subject to black market rules.
2. Peacemaking has been geared to compromise rather than strategic planning for a long-term outcome
3. This means that state dysfunctionality is highest immediately after the peace accord.
4. Even if civil war does not break out, cost of failed politics and poor policies is immense.
5. Lack of money is not the driver for poverty, but rather corrupt politics that enrich the few at the expense of the many.
6. Dysfunctional states spawn the rise and spread of networks of criminality and wealth confiscation instead of networks of social wealth creation and sharing.
The book concludes with "A New Agenda for State Building"
1. International compacts
2. Sovereignty strategy
3. Shared rules of the game
4. Mobilization of resources (this would be better titled harmonization of resources--we need Global Range of Gifts Tables for every country down to the village hut level, online, updated by national call centers
4. New leadership styles--this is a superb overview of what it takes to migrate from industrial era pyramidal leadership to Epoch B swarm leadership (see the image I am loading above).
5. Reflexive monitoring at every step of the implementation process
6. Double compact in practice
The final two chapters focus on national programs, and in conclusion, on "Collective Power."
I put the book down feeling GREAT. This book is a seminal reference.
Now for ten books (and my reviews) that round out this one book:
The Health of Nations: Society and Law beyond the State
High Noon 20 Global Problems, 20 Years to Solve Them
Plan B 3.0: Mobilizing to Save Civilization, Third Edition
The leadership of civilization building: Administrative and civilization theory, symbolic dialogue, and citizen skills for the 21st century
Global Assemblages: Technology, Politics, and Ethics as Anthropological Problems
The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks)
The Wealth of Networks: How Social Production Transforms Markets and Freedom
Teaching to Transgress: Education as the Practice of Freedom
How to Change the World: Social Entrepreneurs and the Power of New Ideas, Updated Edition
Collective Intelligence: Creating a Prosperous World at Peace
My criticism is that I felt that the authors were often randomly picking and choosing examples that seemed to "nicely" fit their thesis while overlooking more complex cases of state failure (such as the DRC or Somalia) where their approach appears almost too clean to implement. I would have really appreciated a deeper assessment of a difficult case study where the authors attempted to implement their approach while discussing the myriad of complexities and shortcomings of their own strategies.
Though the authors do a decent job critiquing the UN and the failures of Western government interventions, I think they needed to go farther in addressing the issue of resource extraction and how the interests of the developed world in continuing such policies (or ignoring such activities all together) contradict directly with true sustainable development. If the market model is really the answer, as the authors contend, then which agency (or group of states?) can effectively serve as the honest broker in the battle between market profit/development vs. sustainable state building? This is a very important issue to address given the power imbalances between the key actors in the international system. Such imbalances exacerbate failed interventions and perpetuate state failure.
But let's focus on the interesting stuff. The authors have a go at a `kicking away the ladder'-style trawl of some historical examples of state-building, citing Singapore, the Southern US, European Union and Ireland. Not bad, especially when showing how Singapore went from fragile case and predicted basket case to statist development superstar. As always, there is a nobel prize-winning economist on hand (in this case Gunnar Myrdal) to pronounce that the country is doomed, just as it begins a stellar take-off.
But the real substance is drawn from Afghanistan, where the authors first met and worked together when Ghani was Finance Minister after the fall of the Taliban, and Lockhart was an adviser to the government. I previously blogged on their account of this in Prospect.
The authors identify and explain ten core functions of the modern state (the state's remit - and spending- has expanded remorselessly over the last 200 years):
- Rule of Law
- A monopoly on the legitimate means of violence
- Administrative Control
- Sound management of public finances
- Investments in human capital
- Creation of Citizenship Rights through Social Policy (eg social protection),
- Provision of Infrastructure Services
- Formation of a market
- Management of public assets, both physical and intangible (eg national brand)
- Effective Public Borrowing
They also wrestle with a critical question that has come up repeatedly in presentations of From Poverty to Power: How Active Citizens and Effective States Can Change the World: are effective states generally built by autocrats (think Bismarck or Stalin), rather than democrats? Their answer is that history has moved on, and that today's state builders need to respect rights and consult their populations, both to achieve internal legitimacy, and international acceptance. They argue this more through assertion than evidence, though - it certainly doesn't pass the China test.
Where it gets interesting is in discussing the implications of state-building for the international system. The authors argue for an overhaul to agree `international compacts' around a `sovereignty strategy' of conscious state building for each country, defined as `the alignment of internal and external stakeholders to the goals of a sovereign state.' `Instead of the many different interventions - humanitarian projects, security, development, trade - agreeing on a long-term, state-building strategy tailored to specific contexts and designed to achieve a fully functioning state should be an organizing principle for the international community.'
All well and good, but what do such sovereignty strategies actually contain? Here it gets a bit vague. In a manner analogous to the `growth diagnostics' work of Rodrik, Hausmann and co. at Harvard University, the authors argue that `the state-building agenda entails easing constraints on state institutions... Rather than adhering to a model that stipulates a priori both the institutions and the mechanisms for their creation, this approach encourages piecemeal, context-specific innovations.' This `institutions diagnostics' approach necessarily entails a lot of trial and error - a job for searchers, not planners, in William Easterly's useful schema.
Although this approach needs a lot more specifics, there are a few tantalising illustrations from Afghanistan, for example when they wanted to replace a chaotic system of multiple currencies, the IMF warned it would take years, and UN advised that Afghanistan would need to employ 8,000 bureaucrats. In fact they did it in four months, by working with the national network of hawala money traders who rapidly organized the collection and then burned and replaced the old money.
Finally, the authors trumpet the virtues of the Afghan National Solidarity Program, set up in 2003 and `designed to empower communities to manage their own reconstruction process. The government provided block grants of between $20,000 and $60,000 to every village in the country as long as they agreed to abide by requirements that the village elect its leadership council by secret ballot, hold participatory meetings to design its own recovery plan and projects, and post its accounts in a public place... four years later, the programme has seen more than 12,000 village development councils elected ad more than 19,000 project plans approved.'
What interested me was the striking echo with the approach of the US marines to the challenge of chaos and complexity - no attempt to determine the exact course of an engagement, just stick to three basic principles: take the high ground, keep moving and stay in communications contact. So is the NSP the way to spend money and build states in a chaotic and complex world?
This review first appeared on Oxfam's From Poverty to Power blog on [...]
The talk is amazing--I said to myself "finally, here is somebody with novel, systemic insights into international development--what works and what doesn't work." So I was very excited to get the book.
I found the book to be a somewhat tough read. In the first half the commentary wanders more than it needs to. It's clear that the authors know a lot about the history of related events, but the focus jumps around such that I struggled to pull out the key points, or find a clear line of thought. The bright spots are the stories sprinkled throughout.
The second half of the book (Parts 2 and 3) is a fairly straightforward description of the "Ten Functions of a State" that they define. It's all very sensible, although I wish there was more talk of "how to get there from here," more examples of how to actually put it into place.
I kept wishing for focused chapters on specific countries, or even situations, that would take the ideas from the book and apply them, rather than a few paragraphs here and there.
By sheer coincidence, I started reading this book at the same time as the book "The Waxman Report: How Congress Really Works" by Henry Waxman. I found that book to be an amazing read. It is one gripping story after another, with just the right amount of commentary and structure around it to give perspective. I couldn't put it down--read it in a few days, and am still talking about what I learned.
The ideas underneath this book are important and brilliant. The way it's written just didn't work for me, and I suspect for a broad audience. If these ideas were presented differently, for instance as a set of stories (like Waxman did), this would be riveting.
I hope the authors take another crack at this in a different format because the ideas are important--perhaps a different publisher?
If you care about international development, this is worth looking at--the ideas are very good.
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