Past interventions in fragile states had “disastrous” results, says LSE professor

3 Jun 16

The way the international community deals with fragile states needs an urgent rethink, according to the director of the London School of Economics’ International Growth Centre.

The standard models used to tackle fragility over the last 20 years have had “disastrous” consequences, said Sir Paul Collier, speaking at an event as part of the IGC’s Growth Week conference in London on 2 June.

He said: “Fragile states have distinctive, intractable problems. Theory has been absent and policy practice has been a failure. We need a major period of rethinking.”

Collier highlighted two areas where the go-to international interventions have failed in fragile states: building an effective tax system and building government legitimacy.

He noted that the International Monetary Fund always recommended that countries bring in a value added tax to generate revenue.

However in six fragile African nations, for example, this backfired, resulting instead in substantial losses as tax inspectors made money for themselves by taking advantage of the rebate component of the VAT mechanism.

This was because tax inspectors in fragile states have different underlying motivations, values and worldviews from those in stable countries, Collier said.

These meant they were more orientated towards increasing their family’s income than bringing in revenue to the state. This was especially the case if they believed funds would go into the pockets of corrupt superiors rather than towards public services, he said.

In such circumstances, local behavioural norms and attitudes needed to be addressed before a VAT system would be feasible.

Another challenge for fragile states is the legitimacy of their governments. The international community often attempts to achieve this by holding free and fair elections.

Collier stressed, however, that this does not work – as evidenced by events in Afghanistan, Iraq and Libya – with the risk of conflict rising again once elections have been held.

He explained that in states where identities are “segmented” and “oppositional”, elections, with their “intrinsically divisive narratives”, only exacerbate problems: those who identify with the winner might view the government as legitimate, but those supporting the loser will not.

The power endowed upon the government through an election will not then make it legitimate so, instead, it resorts to “dysfunctional” methods of gaining compliance from its citizens, such as violence, Collier said.

He suggested methods to bridge this “mismatch” between power and identities including implementing power sharing governments, as in South Sudan, or decentralisation, as in Kosovo.

Other common mistakes made during international interventions include focusing too much on the long term while neglecting the short term, trying to fix everything at once instead of starting with a few changes that were easy to implement, and inflating citizens’ expectations, which set the government up for failure, he said.

He warned against trying to “sell [the population] a dream”, and advised that credibility should be build slowly by under-promising and over-delivering on a few, feasible measures.

Timothy Besley, a professor of economics and political science at LSE and a member of the IGC’s steering group, also spoke at the event.

He highlighted the importance of building strong, resilient institutions that can keep checks on the executive to reduce the risk of conflict, encourage growth and strengthen resilience to economic shocks. 

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